Robert Lerwill, chief executive of British media and market research multinational Aegis Group Plc., leads a coglomerate that employs about 14,000 people in more than 70 countries in specialist firms that include market research company Synovate, marketing agency Isobar and media communications firm Carat.
In an interview with Mint, Lerwill speaks about his group’s plans to consolidate in India and possibilities of it working closely with rival French advertising multinational Havas. Edited excerpts:
What are Aegis’ consolidation plans globally and in India?
We’d like to do more in India. Last year, we severed our relationship with our long-term partner Percept Holdings and now have 100% equity in Aegis’ operations in India. We made some interesting acquisitions in digital and are going to make some more in India and globally. India’s an important market for us, with huge growth potential and we need to make sure we are better represented.
Aegis Group’s Robert Lerwill.
We made 12 acquisitions this year. But our acquisitions are never like Digitas or 24/7 Real Media. In many areas, what we tend to do is to buy business in regions (in a particular area of speciality) and leverage them through our network either through Synovate or Isobar. We are interested in people who want to come in and adopt the philosophies of our existing brands Synovate or Isobar.
In India, we’ve got an Indian national to take over from Richard Halmarick, who was chief executive officer of Aegis Media Asia South. He’s taken over various markets within Asia and is in particular involved with growing business in India (for Carat and other Aegis companies).
We’d like to be in control of our own destiny. Wins such as General Motors Corp. in Europe and Mattel UK Ltd are all new business, which have helped us grow our presence in India, Asia, eastern Europe, Latin America, among others. In these markets, there’s an advantage because not only is the GDP growing, but there is also an increase in the percentage of GDP spent on marketing. There is an increase of high networth individuals, and greater disposable income in these markets—20% of Aegis’ overall revenues are from growth economies such as India, China and Poland.
What is your views on Havas’ Vincent Bollore looking for greater representation on Aegis board and Aegis and Havas working closer together?
Vincent Bollore is a shareholder and we respect that. But we carry on running the company. One issue with Bollore is whether he should have direct representation on our board or not; 90% of shareholders say that if you are a direct competitor, you shouldn’t be on our board.
As for Aegis and Havas working together, would PepsiCo Inc. ever work closer with Coca-Cola Co.? We are big competitors in overseas markets. We are No. 1 in France and Havas is No. 2. In Spain, Havas is No. 1 and we are No. 2. There’s no way we will work together because if we do, we will have huge competition issues in Europe and client conflicts.
In some markets, we do work together in specialized areas such as out-of-home (Aegis’ Posterscope has a network in 23 countries) and because Havas Media doesn’t have those relationships in some of those markets, they use us. But just because you have a common big shareholder (in the form of Vincent Bollore), doesn’t mean that it’s in your advantage to do more. And most of the advantage is to Havas not to Aegis. So we say, come and talk to us and explain what you want to do. And we will do it only if it’s to our commercial advantage.
What are your plans to launch Velocity Sports and Entertainment Llc. and Aztec in India?
Velocity is a very interesting business in sports and entertainment marketing. Velocity is US-centred, but has worldwide capacity such as in France and Scandinavia. We are not announcing anything now, but Velocity will be rolled out globally, including India. The roll-out will be partly by acquisition and partly by growth.
We acquired Aztec Information Systems Pty. Ltd for data analytics and will be rolling it out in Asia, South Africa and Europe.
What has been the impact of the recent economic slowdown on Aegis?
I am not concerned about the GDP of India or the US or any other market. I am more concerned about our clients such as GM, Procter and Gamble Co., etc., and that’s what determines what I will do.
We feel fairly robust in terms of what clients are saying they can spend. What we are doing is listening and we will adjust accordingly.
If there is a slowdown, we will adjust our internal costs. We spend a lot on investment and in rolling out of projects. At least 5% of our spends are easily adjustable.
As new business wins push us forward and over 25% of our revenues come from digital, we think we are well positioned to get through any shakiness that might happen in the economy.