Mumbai: Big ad spender, Aditya Birla Group, has firmed up plans to make MindShare, the media buying agency of London-based GroupM, its media agency to handle all brands including Idea Cellular, Birla White and UltraTech Cement, said an official familiar with the development.
The decision is a big win for GroupM, part of the UK’s WPP Group Plc., the world’s second biggest advertising company by billings.
The Aditya Birla Group had already shifted media planning and buying activities of Birla Sun Life, Madura Garments, Hindalco Industries Ltd, Grasim and Birla Cellulose to MindShare in May. But big spending Idea Cellular, the group’s telecom brand handled by Lintas Media Group, and Birla White and UltraTech Cement, handled by LodeStar Universal, hadn’t been moved until now.
The same official said the move had initially stalled because of resistance from group companies that had wanted to maintain existing agency relationships. This official, who didn’t want to be identified because he is not the group’s official spokesperson, said the issue has been resolved internally and a decision made to bring all brands under MindShare by early 2009.
A group spokesperson wasn’t available for comment, as was R. Gowthaman, managing director of MindShare South Asia. Executives at both LodeStar and Lintas said they hadn’t been informed about any such decision.
Idea Cellular’s annual advertising expenses are estimated at Rs150 crore in 2007-08, while UltraTech spent Rs15 crore, according to media buyers. Birla White’s advertising expenses are estimated at Rs5 crore. Mint couldn’t independently verify these amounts.
In anticipation of the shift, MindShare had already beefed up internal operations, said one media executive who didn’t want to be identified. It recently appointed media veteran Ajit Gurnani to lead the group’s media business. Gurnani has at least 15 years of experience in media and marketing, and was most recently marketing head of Al Ain National Juice and Refreshments Co. in Sharjah.
With a deepening slowdown, more consolidation in media buying operations at multi-brand companies is likely, say some media buyers.
“Clients will benefit from economies of scale,” said L.S. Krishnan, president of Radar, the media agency of Mudra Communications Pvt. Ltd. “Agencies can give a client customized structures and solutions. There will also be a single-minded focus on deliveries.”