Exclusive: Sam Balsara on GroupM acquiring 76% in MediaCom India: In today’s world, you can be a partner and competitor to the same entity…

25 Jan,2017

 

By A Correspondent

 

Sam Balsara

In today’s world, you can be a partner and competitor to the same entity. That’s how MadisonWorld founder and chairman Sam Balsara sums up the new arrangement in the joint venture with GroupM on media agency MediaCom’s India operations.

 

As per the original agreement, WPP’s GroupM reportedly had the right to acquire a majority stake after a period of eight years, which they just did.

 

Earlier, Madison owned 51 per cent and GroupM 49 per cent. Now, GroupM has bought 25 per cent, making its total stake to 76 per cent. For Balsara and team, it’s matter of great pride that the jv was a success for the last eight years.

 

And does this mean anything at all on possible ownership of mother ship Madison? “There’s no connection whatsoever,” Balsara laughed it off underscoring that this was a completely independent transaction.

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At mid-morning on Tuesday, Balsara tweeted a clip from The Economic Times of last week where Madison Media had announced a tie-up with Bangladesh’s independent media agency Mediacom. Mediacom, the report noted, is part of Bangladesh’s industrial conglomerate Square Group and handles media planning and buying for Perfetti Van Melle, Asian Paints, Ispahani Group, Singer and some products categories of the parent company. As a part of the deal, Mediacom will have access to Madison Media’s tools and operating software.

 

Less than 10 hours after this tweet, came in this missive from the GroupM headquarters in north-west Mumbai: The media services network had announced that it will be acquiring a majority stake in MediaCom India.

 

While MediaCom India will continue operating as an independent brand, the agency will have the advantage of access to GroupM’s global infrastructure. This acquisition continues WPP’s strategy of investing in fast growth markets, new media and digital, notes a commuique. The news on the Bangladesh tie-up and what happened closer home had of course no connection. Except the timing of Balsara’s tweet.

 

Stephen Allan

“The majority acquisition of MediaCom in India represents a significant evolution in one of the world’s fastest growing economies. As India becomes a very attractive business hub for global clients, we are confident our talented team in India will deliver exemplary growth and results for all stakeholders.” said, Stephen Allan, CEO, MediaCom Worldwide.

 

 

 

CVL Srinivas

Speaking on the acquisition, CVL Srinivas, CEO, GroupM South Asia said, “MediaCom India has won several prestigious clients, developed a strong digital presence and has delivered award-winning campaigns for clients. As a network, we have taken giant strides globally and in India towards a more Data and Tech-led core to our business. MediaCom India can harness our world-class media infrastructure to provide more value to its clients and people.”Interestingly, the Mediacom Bangaladesh tieup allows that agency to dig into Madison’s tools and infra.

 

Flashback to April 2008 when Balsara announced with much fanfare that he had acquired 51 per cent stake in MediaCom India. And also the coveted P&G business. Over the last eight years, MediaCom India has established itself as one of the Top 5 media agencies in terms of market share (Source: RECMA ratings 2015). In 2016, WARC ranked MediaCom India’s Mumbai office as one of the top 10 media agencies in the world based on performance in effectiveness and strategy impact for its clients.Its client roster includes Proctor & Gamble, Tata DoCoMo, Future Group Retail, Shell, Dell, Makemytrip.com, SAB Miller, Subway, Bose,Vespa and Urban Ladder amongst others.

 

Industry observers meanwhile don’t read too much into the development. Although Mediacom may technically have been owned by a majority by GroupM, over the last few years, GroupM is said to be representing its interests very actively. A scenario which Balsara says was fine given that it was all for the good of MediaCom.

 

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