Despite Omnicom-Publicis merger, WPP clear #1 in India

30 Jul,2013

By Samidha Sharma

 

The $35-billion merger of American advertising and marketing group Omnicom with the Publicis Groupe will put the combined entity right on top of the global advertising industry in terms of revenues. But in India, Martin Sorrell’s WPP will maintain its No 1 position by far compared to its nearest competitor. Publicis Omnicom, the newly formed holding company, however, may narrowly topple the Interpublic group from its second spot in India, according to some industry estimates. These agency networks do not share their revenue numbers publicly in India.

 

Most industry insiders said that the global merger will not have an immediate impact on the Indian market where the network’s agencies are expected to run independently. Both Publicis and Omnicom have upped their ante in the Indian market with acquisitions over the last couple of years to take on WPP head-on here.

 

While Omnicom took full control of domestic biggie Mudra in 2011, Publicis has gone on to acquire smaller agencies like Convonix, Resultrix and iStrat, among others, in India. WPP, the clear No 1 locally with revenues topping Rs 1,500 crore, is still double the size of IPG and the newly formed Publicis-Omnicom here.

 

Agnello Dias
Agnello Dias

“The combined entity will help in the Indian context when a global client of either Omnicom or Publicis decides to enter the local market. With a wider bouquet of offerings across creative and media agencies, the group will have higher chances of retaining these clients here,” said Agnello Dias, co-founder, Taproot, an independent agency which was acquired by Dentsu last year.

 

Over the last few years, as traditional advertising mediums are being challenged by the likes of Google, the world’s largest online search firm, and social media platforms, consolidation has begun to take place rapidly across the advertising world. In 2012, Japanese ad network Dentsu acquired British media buying group Aegis to give it a much needed access to markets outside of its home country in a $4.9-billion buyout.

 

The merger is unlikely to be a gamechanger in India until they get one head of the combined entity and cut flab which is not going to happen right away, said a CEO of an advertising firm who did not want to be named. Conflicting client interests – such as the one between Coke and Pepsi – is another issue which will be at the fore front for both the networks to handle going forward.

 

Ashish Bhasin

“The new entity has the potential of becoming a stronger player as well as a weaker one depending on how post the merger the group handles its clients and employees,” said Ashish Bhasin, chairman (India and CEO (South-East Asia) for Aegis Media.

 

Source:The Economic Times

Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved

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