VivaKi Partnerships aims to double network

Media-buying agency to expand into Indore, Nagpur, Pune, Ludhiana, start media workshops
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First Published: Mon, Jan 07 2013. 11 24 PM IST
VivaKi Partnerships began two years ago and is modelled on its China operations, where large agencies identify and support local agencies in smaller towns.
VivaKi Partnerships began two years ago and is modelled on its China operations, where large agencies identify and support local agencies in smaller towns.
New Delhi: VivaKi Partnerships, a venture by media-buying agency VivaKi Exchange that focuses on tying up with small, local full-service advertising agencies in tier II and tier III cities, is looking at doubling its network by the end of 2013.
The VivaKi unit, which currently works with 10 local agencies in markets that include Lucknow and Kanpur, is eyeing territories such as Indore, Nagpur, Pune and Ludhiana. It will also start media workshops this year to educate local advertisers about diverse media options.
Publicis Groupe’s VivaKi, which works with national advertisers such as Samsung, BlackBerry and Nestlé, and clocks an annual billing of close to Rs.2,800 crore, is keen on tying up with local agencies to gain a share of the business opportunities in such markets. Such agencies typically have 40-60 local clients each and many have an annual billing of Rs.50-70 crore.
“Purchasing power of people in smaller towns is going up and the market place is changing. Media is expanding there,” said Mona Jain, chief executive officer, VivaKi Exchange. “Clients are becoming more aware and willing to explore newer mediums.”
Smaller markets are contributing substantially to the overall advertising kitty. According to VivaKi, they account for 55% of the total Rs.16,300 crore spent on advertising in print media.
The expenditure on media from tier II and tier III towns is growing in double digits, driven by categories such as real estate, retail, education and travel and tourism, according to Tarun Nigam, chief operating officer, VivaKi Partnerships.
“There is plenty of advertising revenue lying in these markets. We want to diversify the reach of the local agencies to new clients,” he said. “Additionally, we want to educate them about new media such as mobile and digital and out of home advertisement as there is only so much growth one can see coming from print.” Pegged at Rs.3,500 crore today, digital media—online and mobile—is increasingly gaining traction in the mini-metros.
“We can make them understand that digital is something they have to adopt today or tomorrow,” he said.
According to the 2012 media and entertainment report by the Federation of Indian Chambers of Commerce and Industry (Ficci) and KPMG, the digital advertising market grew to Rs.1,990 crore in 2012 from Rs.1,540 crore in 2011, with brands such as Hindustan Unilever, Samsung and PepsiCo increasing spending on social media.
Growth in advertising revenues from smaller cities will drive expansion of agencies in these areas, said Smitha Jha, leader, entertainment and media practice, PricewaterhouseCoopers India. “If you look at advertising growth—national versus local—the focus is skewed towards ‘national’. That leaves a lot of potential for growth coming in from tier II-III cities. National advertising can see only so much growth driven from volume plus rate and is constantly impacted by global economic conditions,” she said.
“Retailers and advertisers in tier II-III need the help of larger agencies to reach out to larger markets and be able to advertise in, say, Delhi, or Mumbai apart from their home markets,” she said. The economic slowdown hit print advertising revenue in last year, according to a 1 January report by Kotak Institutional Equities.
However, the report pointed to a “robust turnaround in advertising growth in FY2014E (over 10%) led by relative stability in GDP growth, low base and a robust festive season in 3QFY13.” It said “stable” consumer goods and healthcare advertisers are increasing their share of print advertising, while others such as real estate, the banking and financial services industry and education will resume such spending.
VivaKi Partnerships began two years back and is modelled on its China operations, where large agencies identify and support local agencies in smaller towns. These partnerships, in the form of exclusive relationships, support agencies with infrastructure and provide value-added services. Other agencies are also eyeing the same markets.
“It’s natural for us to expand to smaller towns and cities, since that’s where the growth is coming from,” said an executive at GroupM, WPP’s media-buying agency that has offices in Kerala.
Ashish Bhasin, chairman, India, and CEO, South East Asia, at Aegis Group Plc, agrees with that. The group’s media planning and buying agency Carat started operations in Kochi last week. After Delhi, Mumbai, Kolkata, “the next round of growth will be from the non-metro markets”, Bhasin said.
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First Published: Mon, Jan 07 2013. 11 24 PM IST
More Topics: Vivaki | advertising | Tier 2-3 cities | Media | PWC |
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