O&M pros: Chances are, anyone with grey hair is rich

There's a cash-component to xenophobia and many employees of JWT and O&M are discovering it to their benefit. Between 1994 and 2002, the Martin Sorrell-promoted WPP, a $5-billion advertising conglomerate, upped its stake in the country's biggest (creative) agency, JWT India, from virtually nil to 74 per cent. Now there are reports that Sorrell is looking to take WPP's 51 per cent share in Ogilvy & Mather India, first to 65 per cent and then, 74 per cent. Guess who made the most out of WPP's efforts to strengthen its stranglehold over the Rs 9,000-crore Indian advertising market? The shareholders of the two agencies, of course, and all of them happen to be employees.

The buzz is, the going price for JWT was around Rs 6,000-7,000 a share, and that for O&M is likely to be in the same range. Ergo, even not-so-senior employees with 150-200 shares-and there are at least around 10 such in each major branch-made, or stand to make at least a million rupees. "Many oldtimers, like studio managers, have actually called it a day and gone home with that kind of money," says a former employee of one of the agencies.

They have the government to thank. In the late 1960s it decreed that foreign companies couldn't hold the majority stake in Indian subsidiaries. And in 1974-75 it followed up by mandating that advertising agencies with any foreign shareholding couldn't do business with public sector companies. With private enterprise yet to kick off, most agencies diluted their entire holding in favour of employees. JWT, for instance, became 100 per cent employee owned with one senior executive recollecting that the parent "gifted away its entire holding for free". Liberalisation brought back the parents, and employees who had stuck it out, many for this express purpose, struck gold.

-Shailesh Dobhal

CHIP-FEST
Bangalore's IC Hothouse

Bangalore's DD: Spot the chip if you can

What's this?

It is Diamond District, a building on Bangalore's Airport Road.

What is it doing in the magazine?

It appears courtesy its standing as the repository of some of India's best chip designing talent.

Meaning...?

Texas Instruments, Motorola, and Analog Devices are all based here.

So, it must be bustling with activity?

Yes, and no. Almost 30 per cent of the building is unoccupied. And BT learns that the Bangalore City Corporation may be investigating it for some violations. Oops!

-Venkatesha Babu

Consumer Cues
Kolkata's ad club decides to poll consumers for its annual awards.

Fifty years ago, Kolkata was the hub of Indian advertising with the likes of Satyajit Ray and Subhash Goshal leading the city's industry. Since then, business has dried up in India's cultural capital and many agencies have actually downed shutters. However, if the Advertising Club, Kolkata's ploy of polling consumers for its awards works, the city could reappear on the map of Indian advertising. The club has appointed research agency Indica to poll 6,500 consumers across the country and use its (the agency's) proprietary Consumer Resonance and Impact Score (CRIS) to measure advertising effectiveness. "This exercise is not just to judge awards but to create a regular knowledge base for the advertising world in general," says the club's president Roshan Joseph. Fifty years on, maybe Kolkata will be remembered for its advertising awards.

-Debojyoti Chatterjee

Selling To The Poor
A follow-up to BT's 2001 report on selling to the poor.

Woman Power

From 50 villages in one district, Nalgonda, in one state, Andhra Pradesh, HLL's Project Shakti-the use of Self-Help Groups to distribute products in the rural hinterland-has spread to 5,000 villages across 52 districts and four states, Andhra Pradesh, Karnataka, Gujarat, and Madhya Pradesh. Today, a typical Shakti entrepreneur earns Rs 1,000 a month and generates business worth Rs 15,000 from what she calls the "Hindustan Company". The model works. "In AP, 3-4 per cent of HLL's rural business comes from Shakti dealers," says Sharat Dhall, Marketing Manager (Rural), HLL. Next step: to reach 100 million rural consumers through 11,000 Shakti entrepreneurs by 2010.

-Dipayan Baishya

Pocket Wonder

The Indian parliament has discussed it, and reams have been written about it, but the Simputer (portmanteau of Simple and Computer) is yet to set the markets on fire. Two years on, two companies, Encore Technologies and Pico Peta, have products in place. Encore's ceo Vinay Deshpande attributes the delay to getting the product right. "Anything that breaks away from the mould will take time to stabilise." Encore's four offerings, manufactured by TVS Electronics, are priced between Rs 13,700 and Rs 26,800; Pico Peta's are manufactured by BEL and expect to hit the market by June. And so the hope about a product that's more than a PDA, less than a computer, and easier to use than both, lingers on.

-Venkatesha Babu

Network Effect

For those who came in late, N-logue, a company incubated by Ashok Jhunjhunwala's Tenet Group in IIT Chennai, seeks to provide low-cost telephony and internet access. It identifies local service providers who manage districts and rope in village-level entrepreneurs to set up kiosks. LSP break even when they typically manage 100 kiosks. Today, the company has 25 LSPs and 475 kiosks across Tamil Nadu and Maharashtra. And it has signed franchise agreements with Tata Teleservices, Bharti, and other private operators to offer telecom services. "We need to showcase at least 10 LSPs making money for the next big leap," says CEO P.G. Ponnapa.

-Nitya Varadarajan

HOTSPOTS
AP's New IT Hubs

Punsters will find it difficult to come up with a Hyperabad kind of rip-off for the three cities that the Andhra Pradesh government wants to position as it hubs. Nor will cm Chandrababu Naidu's spin doctors find it easy to coin Cyberabad equivalents. The three cities concerned are Vizag (Vishakhapatnam), Vijayawada, and Guntur. ''The state government seems to have realised that it can be a growth engine and appears to be in the process of formulating incentives to promote these regions," says Shakti Sagar, President, Hyderabad Software Exporters Association. When it does, you can be sure to hear of it. Hyderabad is considered second only to India's own Silicon Alley Bangalore in its standing as a it-centre, a surprise of sorts given that Chennai and Delhi export more software than it. Still, the three cities do have an untapped relevant labour market that should appeal to it-enabled services and business process outsourcing firms. The government, for its part, is "setting up it parks along the lines of Hyderabad's Hi-Tec city", according to Naidu's tech-savvy Special Secretary Randeep Sudan. That's a start.

-E. Kumar Sharma