Acquisitions will continue: Publicis

11 Dec,2012

 

By A Correspondent

 

This is Jean-Yves Naouri’s third officially announced visit to India. As Chief Operating Officer of Publicis Groupe and Executive Chairman of Publicis Worldwide, he has been the group with 19 years and knows perfectly well that India is a very critical market for the network over the next five years. Soon after announcing the acquisition of well-known consulting firm MarketGate and digital shop iStrat, Mr Naori addressed the media in Mumbai. He spoke to MxMIndia and a dozen other business and trade publications before flying back to Paris soon after midnight.

 

Jean-Yves Naouri

We had made a conscious decision a few years ago that Publicis will work with two strategic pillars – one is digital and the other is e-commerce. This is a long-term strategy that we have drawn out. So we are not considering tactical investments, we are moving forward using our previously devised strategy.

 

When you talk about slowdown,  many countries dream to have the kind of growth that India has shown this year. We are very confident in the potential that India seems to offer and have taken some measures that seem to be promising. So we strongly believe in the potential of India going forward and by making investments we are not looking at the GDP numbers vis-a-vis the year 2012 but the longer implications that it would offer.

 

Don’t you feel it would have been apt for you to have a one digital agency servicing all other agencies?

This is not the approach that we have. For us digital is an intrinsic part of our vision and strategy and we want to make Publicis group the numero uno digital company. We want every single operation to become fully digital. This is a change of approach in order to better service our client. You cannot expect one digital agency to service all our clients not only because of cost reasons but also sometimes they do not have all the capabilities required to cover all areas. So we have made a choice to have a different approach where we want every single operation to become fully digital. We are consciously strengthening and adapting our every single operation and that’s how you see Indigo joining hands with Leo Burnett and participating in this transformation. Also, iStrat joining Publicis and Resultrix joining ZO… Saatchi has a very different organic approach where it is hiring digital talent to transform itself from the inside.

 

So wouldn’t hiring hiring talent have been better?

I do not think one strategy can be better; strategy is a result of the approach that we are taking or the conscious analysis of the best way by brands based on their contracts and situations and sometimes we feel it is better to do it organically and sometimes through acquisitions.

 

How would you rate the performance of Publicis Groupe in India?

Firstly, we have made India our true area of focus. As we’ve said, in the BRIC countries we have doubled the size of our operations in Brazil over two years, we are on the verge of doing the same in China and we continue to accelerate our efforts in India.

 

And if you were to compare your network versus the others operating in India?

I do not look at comparisons rather I look at our clients – that is what matters to us. This has been the driving force for us. When we announce our strategic plans the first element that we take into consideration is: what do our clients need and how can we take them to the next level? So the acquisition of MarketGate on the one hand that brings in some strong expertise in consulting to the CEOs and CMOs with undisputed talent is one such message. Also, the fact that we have announced our partnership with IBM in the area of e-commerce and have presence in China and in India is also a strong commitment to this domain.

 

We also look at initiatives in the healthcare domain where India is very strongly placed.

 

Is research something that you are looking at in a big way?

No, we are not looking at research for some conscious reasons. We feel odd that a same company will be releasing a campaign and will also be judging its relevance through a market research company of its own. We see an ambiguity there and are not pleased with it. Secondly, there is a profound transformation of market research these days and it’s due to digital. It enables you to have access to the best sample of audience from around the world that can provide you immediate and more adequate reactions to your needs. So we do not feel comfortable investing in research.

 

How active is Razorfish going to be in India?

It is very likely that we will see some development of all our pure-play digital agencies.

 

In 2010, you had mentioned that your revenue will double by 2015. Do you see that goal being achieved a bit earlier?

If there is a surprise, I would announce it in due time.

 

Any regrets on not bidding aggressively enough for Taproot India?

We never look back; we look forward.

 

Can we expect any more acquisitions in the near future?

We will continue to explore possibilities and again, I use the word acquisitions in different ways. It’s a acquisition of talent, of companies etc.

 

Are you looking at acquiring more creative agencies?

We have no limitations in the areas that we are strong in. India is important for us and we will continue to strengthen our focus around it.

 

***

 

The advertising business is not like Bollywood: Bertrand Siguier

 

You could mistake him for a pensioner sipping his cup of coffee and reading the papers at the India International Centre or the Indian Merchants Chamber. At the media interaction at Mumbai’s Four Seasons Hotel last Friday, he was quiet looking around occasionally to figure what was happening.

 

Bertrand Siguier has a rather long title: Special Advisor to Maurice, Levy chairman of Publicis Groupe. He was Executive Vice-President of the group till 2009. Mr Siguier has been overseeing India operations for a while and is familiar with the market here. Soon after the announcements of the twin acquisitions of MarketGate and iStrat, and as the mediapersons made a beeline for Jean-Yves Naouri (interviewed above) and MarketGate CEO Shripad Nadkarni or IStrat CEO Navneet Singh Sahni, MxMIndia caught up with Mr Siguier for a quick, freewheeling chat.

 

Bertrand Siguier

Wouldn’t it have been better if you would have had one digital agency that services various creative agencies rather than three that the Publicis Groupe has acquired this year?

It is one of the ways to go about doing business but we have chosen to do it the other way round and that’s because of our agencies. For example, given that Leo Burnett is quite big and that it prefers to operate in a certain way, we didn’t want to twist their arms and force Arvind Sharma to follow a certain model. That’s one of the reasons that we acquired Indigo, which is one of the biggest and best digital agencies in this country. If you ask me whether Indigo would work with other companies in our group I would say, yes.

 

Do you think the issue of fiefdoms or egos is an international trend or is it just limited to India?

It’s an international trend I would say except a few countries. Like say India, which is a priority and a large market and has potential, we can yes. But in other countries that is not the case. It may be okay for India, Turkey or Germany.

 

What about Saatchi & Saatchi? It’s still not up there in India?

Saatchi will be back; we’re not going to let Saatchi go down. Saatchi has a huge history and we need to have a strong Saatchi in India, which hasn’t been the case for some time. It will be the case starting next year. There has been a change in leadership already last year with the coming in of Matt Seddon who is not Indian but has done a terrific job in restoring order in the organisation. It is not an easy job to do….

 

What about Publicis – are you content with the way the agency is doing in India?

Oh, yes, we are very happy with Publicis; altogether it is doing very well. If you ask me, I am not pleased with anything but given the overall picture Leo Burnett is doing well, Publicis has made a lot of progress but I still want to see more in terms of creativity and visibility. For example, we were not present enough in Goafest so, that is one area that we need to work on.

 

But Publicis is not considered a sexy agency in India…

You may be right but you have a very Indian focus. I do not know why this market is obsessed with stars – the advertising business is not like Bollywood. I know that in India some creative people are considered as stars. You see them in newspapers, you see them with beautiful ladies, you see them trying to film things for Bollywood…we are not in that league. I think we could do a bit more.

 

With low margins, is it profitable to stay in the Media agency business these days?

Low margins on big business can produce some satisfactory results. If you play legally and in a straightforward way and if there are no funny things going around and under the table, it’s a low-margin business.

 

Will the doubling of turnover for Publicis happen sooner than the prescribed timeline of 2015?

I only have a guesstimate and I think we can achieve that before the set timeline. It would be good if that happened.

 

Are you looking at hiring more talent across creative agencies here in India?

Yes, there is a possibility. It is a question of opportunity; I do not want to make a big declaration. If we come across companies that we feel are exceptional and have exceptional talent then why not…

 

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