Mumbai: After inking a deal with Edelman India, the Indian arm of the independent American public relations agency, for handling the PR business of the Tata group, Rediffusion Y&R, the advertising agency founded by Arun Nanda and Ajit Balakrishnan, has formed an alliance with the French advertising network Havas SA for media planning and buying services.
The move comes as a surprise to the advertising industry because advertising conglomerate WPP group holds 26.7% stake in Rediffusion Y&R.
Asked about forging new relationships amid reports that WPP is keen to increase its stake in Rediffusion, Nanda said there was no rift between the partners.
“WPP is a minority shareholder and we respect that. But business requirements demand that we use other channels as well.” In an emailed reply on the developments at Rediffusion, a WPP spokesperson said, “We remain a minority shareholder in Rediffusion and hope its performance improves.”
Havas’ media agency MPG and Rediffusion’s media brand TME have joined hands to offer planning and buying services to clients of Rediffusion Y & R and its subsidiary Everest Brand Solutions. The alliance comes into effect immediately.
Meenakshi Madhvani, chairman, Spatial Access Solutions, a media audit firm, said she viewed the partnership as the coming together of two independents. “I would treat Rediffusion as an independent because it’s majority owned by Diwan Arun Nanda who is trying his best to fight a takeover from the WPP.”
She said that although TME had lost business, it has held on to the quality of work. “With this alliance, both agencies get clout and size in media buying.”
The alliance should add Rs100 -200 crore to MPG’s billings, said Vishnu Mohan, Asia-Pacific CEO for Havas, who declined to share MPG’s total billings in India. Financial terms of the deal weren’t immediately available. “TME can leverage our products and tools, while MPG can leverage volumes.”
Currently TME services clients such as Heinz India Pvt. Ltd and Parle Products Pvt. Ltd. Mohan said that TME will continue to operate as an independent media brand under MPG’s stewardship.
Interestingly, MPG had earlier announced a media-buying joint venture with Percept. Responding to the query if the Percept-MPG deal had been shelved, Ajay Upadhyay, COO, Percept Ltd said that a deal is still being discussed and that the joint venture hasn’t been shelved.
Vishnu Mohan confirmed that this is indeed the case. Rediffusion’s president D. Rajappa said he wouldn’t speculate on the fate of TME’s alliance with MPG should that deal go through.
Arun Nanda and his partner Ajit Balakrishnan own 60% of Rediffusion, while 13.3 % is with Dentsu Inc.