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With the acquisition of Maadhyam, Publicis is all set to give the biggies in the ad business a run for their money. But the road ahead for its young CEO Praveen Kenneth is long and windy. By Shamni Pande.
But it is only in the last decade that Publicis Groupe SA has woken up to the exigency of spreading beyond its European moorings. "This stemmed primarily out of the need of our clients' who are rapidly expanding their presence in the US and Asia-Pacific markets,'' says Guillaume Le`vy-Lambert, Regional Chairman, Asia-Pacific, Publicis Asia Pacific Pte Ltd., who was here last month to announce the acquisition of Delhi-based Maadhyam. This urgency to spread its presence has bequeathed it the `White Knight' image globally when it went on a blazing acquisition spree and over four years it expanded to 36 countries and strengthened presence in the US by acquiring Hal Riney and Fallon McElligott. Besides these, it also bought stake into Frankel in marketing service, Burrel in ethnic and urban lifestyle advertising sectors, and DeWitt in media counsel and buying. The big one of course was Saatchi & Saatchi, which it acquired in June 2000. Back home, it went through an undetermined part when Publicis went into a tie-up with FCB in the US and therefore had a vague presence in India through FCB-Ulka. And when the tie-up broke internationally, things ended here, only to be loosely associated with Ambience till it tied up with D'Arcy. ``Things picked up for us in true terms when Publicis Worldwide bought 60 per cent stake in Zen from Bharat Dhabolkar and today it is known as Publicis India. We have a big challenge of establishing our brand in the market and attracting big business in the process,'' says Praveen Kenneth, CEO, Publicis India. The challenge bit is definitely not empty rhetoric. For one, all the major networks have established their presence for decades and the others have already lapped up most of the established hotshops going around. ``In fact, the barrier towards speeding up entry had been our difficulty in finding an appropriate base and initially some people in the trade did not even recognise the Publicis name, they confused it with hoarding contractors,'' he admits. It is only this year that the agency has managed to enter Delhi by a 100-per cent acquisition of Rs 30-crore Maadhyam Communications. With this, the Rs 78-crore billing has crossed the critical mark to be a Rs 108-crore agency with an employee-turnover ratio of Rs 1.4 crore. ``We are certainly in the top-20 list, if number game is relevant, and ranked 7th in terms of productivity. The idea is to be a lean organisation with 120 people,'' says Kenneth. While the build-up of growth from what it acquired in 1998 as a base of Rs 23 crore to current levels is impressive, it is the next phase which will prove the make or break for the agency. With the acquisition of Zen came Parle Agro's Frooti, Baileys Mineral Water, and Tata Tea's Kanan Devan and Agni, now this list has grown to 42 clients and boast of Laboratories Garnier for hair colour, Apollo Tyres, Alliance Capital, IDBI, Nestle's water business, and UB Group among others. While, Whirlpool is its international client, in India the account is with FCB and rumours were rife about Publicis having bagged the account. ``We are interested and will do our best to get any good client, but the account is not ours as of yet,'' Kenneth dismisses the reports, but admits that some acquisition might still be in the pipeline three months down the line as the market has been abuzz about it trying to acquire Chennai-based Fouintainhead. It launched its international media buying arm Optimedia in November last year, and has also set in place a ground which will see stiff competition among a clutch of agencies fighting hard to push beyond the 100-crore limits. In the fray is its group concern Saatchi & Saatchi, which has now become a Rs 225-crore agency after its recent acquisition of Bangalore-based, Rs 75-crore Kamerad News. ``The relation between us is like HTA and O&M; we are part of the same holding group but are two completely different entities. We would compete for the same business if it comes to that,'' says V. Shanta Kumar, Managing Director, Saatchi & Saatchi, which has an impressive list such as Wagon R from Maruti Suzuki, UTI, HDFC, Panasonic's TV and audio business, BPL's washing machine and refrigerator business, and TVS Suzuki. So can Praveen Kenneth pull this off for Publicis? ``At 30 he's the youngest amongst us. He has a tough task ahead. While Publicis is a good brand, it also a very new one. I hired him at Mudra before he moved on to O&M and I had noticed even then that Kenneth has tremendous drive. Besides, his client management skills are excellent,'' says Madhukar Kamat, CEO, Bates India. With competition snipping at his heels, even one miss could prove costly for the fledgling agency in India. Already there are talks of again merging Zenith and Optimedia with the given trend of clients opting for consolidation in media buying. ``As you know, when Publicis Groupe SA bought over Saatchi & Saatchi, it also happened to control around 50 per cent of Zenith, as it was part of Saatchi & Saatchi. There has been talk about Publicis wanting to buy Zenith from Cordiant, which holds the balance of Zenith. As of date, there is no new development on this front, though there are serious talks underway,'' he admits. Also, the acquisition of Maadhyam has just provided a base but not exciting clients beyond DLF, and Eicher. On its part, Coca-Cola's Cadbury Schweppes business has been a non-starter thus far, though Crush will be revived `soon'. Clearly, the push has to come from some more coming into the kitty, as even the better established S&S has had a tough time weeding out inactive accounts and is in the process of attracting talent for better growth. ``Surprising as it may sound we have not really had a brilliant growth and this is because we have consciously cut on ineffective clients, pruned office, and are restructuring to deliver better results,'' says Kumar. While, Publicis boosts of a lean staff, it will have to reconsider its baggage in time to look at new people who can sync well with its vision and new line of thinking. Here, Sanjay Tiwari who's heading Pegs and Holes an agency-specific search firm in Delhi, sums it up neatly: ``The Publicis name will help better than Maadhyam in Delhi but people also look at the brands they will get to work on. Often people join smaller agencies just to work on good accounts, though of course the choice is always to eye the top-ten.'' So watch your next move Mr. Kenneth, these are bad times. |
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Little
could Marcel Bleustein-Blanchet, also known as David Ogilvy of French
advertising, have imagined that the name Publicis would get confused with
space-sellers for billboards in India. The name was created from an
abbreviation of the first letters of `publicite'---meaning advertising in
French, and number six, related to 1906, the birth year of the founder.