Mumbai: Global marketing communications holding company WPP Group Plc, which is eyeing acquisitions in the high-potential pharmaceutical advertising and communications space, is in advanced discussions with Bangalore-based BioQuest Solutions Pvt. Ltd, said a senior WPP executive close to the deal.
BioQuest, a pharmaceutical marketing and medical communication firm, develops content such as booklets, case reports and bulletins for medical professionals.
The WPP executive said Interpublic Group’s McCann WorldGroup had earlier been in acquisition dialogue with the firm.
WPP Group’s corporate communications officials did not respond to emails sent on 2 October regarding the acquisition talks. WPP India country manager Ranjan Kapur declined to comment. Prasoon Joshi, executive chairman, McCann Worldgroup India, said he would not comment on speculation.
Gautam N. Sathia, managing director and chief executive, BioQuest Solutions, did not divulge the names of the suitors but said, “We have grown rapidly across India and South-East Asia, and have expanded our client base and revenues despite the global economic slowdown. In the process, some key global players in the field of advertising and communications have approached us for considering a strategic partnership.”
BioQuest is talking with these players to ascertain the value of their proposition but it is too premature to divulge any concrete information, Sathia added.
WPP Group, with billings of £18.742 billion (Rs1.38 trillion), has been active in acquiring specialized communications companies in emerging markets such as India.
In 2005, it announced that its global public relations and public affairs network, Burson-Marsteller, agreed to acquire the entire share capital of Indian public affairs agency Genesis Public Relations Pvt. Ltd.
A year later, it announced that it was picking up a majority stake in Banglaore-based brand and design firm Ray + Keshavan Design Associates Pvt. Ltd.
And last year, WPP bought a majority stake in Encompass India, a brand, events and content creation agency.
M.G. Parameswaran, executive director and chief executive officer (CEO), Draftfcb+Ulka Advertising Pvt. Ltd, estimates that the total size of the advertising business is at least Rs18,000 crore a year, with medical and pharmaceuticals-related advertising and communications accounting for barely 1% of the pie. Including over-the-counter drugs ads, this share could go up to 5%, he said.
New avenue: Pharma communications is not regarded as a big business for agencies because medical advertising is usually not allowed in mass media unless it’s for over-the-counter drugs. Rajkumar / Mint
Globally, medical marketing and advertising could account for as much as 20% of some big networks’ revenues, says Parameswaran, adding that acquisitions in this space would particularly make sense if the firms operate in content creation or data analytics.
Pharma communications may be a nascent area in India but has healthy growth potential, says Shashi Sinha, CEO of Lodestar Universal Pvt. Ltd. Pharma communications is not regarded as a big business for agencies because medical advertising is usually not allowed in mass media unless it’s for over-the-counter drugs, he says.
A lot of pharma communications is done by direct marketing agencies but many of these may not have specialization in this area and it would definitely be a good business to invest in, says Arvind Sharma, chairman, India subcontinent, Leo Burnett India Pvt. Ltd.