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Business News/ Companies / People/  We have doubled our size in India in the last two years: Tim Andree
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We have doubled our size in India in the last two years: Tim Andree

Dentsu's executive vice-president talks about the impact of the Aegis and other acquisitions on the India business

Tim Andree says Dentsu is going to remain very acquisitive as a company. Photo: Ramesh Pathania/MintPremium
Tim Andree says Dentsu is going to remain very acquisitive as a company. Photo: Ramesh Pathania/Mint

New Delhi: New York-based Tim Andree, executive vice-president of Dentsu Inc., joined the Japanese advertising agency in 2006 as the chief executive of Dentsu America. Andree played a critical role in orchestrating Dentsu’s acquisition of the UK’s Aegis Group Plc in a £3.16 billion (around 31,695 crore today) deal last year. He was appointed executive chairman of Dentsu Aegis Network, the operating unit overseeing all of Dentsu and Aegis Media’s global operations outside of Japan and was appointed as the first non-Japanese director on the board of the firm.

In an interview, Andree talks about the impact of the Aegis and other acquisitions on the India business, the company’s growing non-Japanese client portfolio in the country and Dentsu’s global entry into public relations. Edited excerpts:

You drove the Aegis acquisition. How has this acquisition helped Dentsu’s business in India?

Well it wasn’t my money.

Overall, Dentsu had been for the better part of 10 years pursuing goals of digitization and globalization, really kind of expanding in digital and expanding our global footprint, and we had been making investments all along in regional areas. The Aegis investment was unique in many ways because of the size—it’s still the largest deal ever done in the industry—and so for us what it did is, it gave us a complete geographic footprint. We had very complementary agencies that have been worked into an excellent operating model. It diversified our client portfolio, allowing us to have a wonderful expanse of client roster.

Then in India specifically, it has allowed us to augment our media presence here and has created a very complementary team that can deliver digital, media and creative capability across multiple agencies in the market.

How have the India acquisitions of Taproot and Webchutney impacted the business?

We have remained acquisitive in supporting the business here in India. We have acquired Taproot and Webchutney. Recently, we acquired Milestone Brandcomm, one of the outdoor (billboard advertising) companies, in July. These are all speciality agencies, so when they come together, they become a very formidable offering for the client.

The Indian market is obviously one of the key strategic markets from an advertising standpoint. It’s very important creatively, so we continue to invest in it. It has allowed us to elevate our business. So, counting those acquisitions as well as the Aegis acquisition and then the organic growth of both businesses, we have doubled our size in India in the last two years. We now have about 1,450 employees and $50 million (around 300 crore) in business revenue.

Not only have we acquired companies, but our agencies themselves have been growing rapidly organically. The market here in India has been growing at 5.5-6%; our agencies have been averaging 10-11% growth and that has been accelerated by our M&A (mergers and acquisitions).

Are you looking to make more acquisitions in India?

As a general matter, we are going to remain very acquisitive as a company. I think we are going to continue to grow in the faster growing regions in the market, to augment our business and that includes India. We are going to continue to invest heavily in digital and then we are augmenting our capabilities in areas like mobile, public relations as well as building more fully our creative networks. I expect nothing on the plate to the scale and size of Aegis, but ever since we have closed the deal with Aegis 18 months ago, we have acquired about 30 companies globally. So, we have kept a regular drumbeat of acquisitions.

Do you plan to get into public relations (PR) in a big way? Do you have plans to extend that to India as well?

We have the intent to get into PR. We have acquired a company in the US called Mitchell PR and we are looking at PR as a future area of potential growth for us. It has been growing in importance, particularly in the areas of corporate social responsibility and how the C-Suite manages brands and crisis management. We hope to have stronger capabilities in that area to offer our clients.

We don’t have a PR offering in India. At this point, we are more focused on North America and to build a base there first. Eventually, we hope to bring this to India as is the case for all our other offerings.

The agency is known for working with Japanese clients. How have you expanded your non-Japanese client base in India?

I think last year the Japanese clients made up less than 30% of our total client revenue in India. So, times have changed. In 2014, 70% of our revenues will come from non-Japanese clients. Some of our biggest clients include Dulux, the Congress party, Akzo Nobel, Airtel. We have a strong list of local clients.

What’s happened in India in the last three years is our agencies have become much stronger, we have made investments both in our agencies as well as to acquire agencies—that has really diversified the portfolio of our client base. At the same time, we have been bringing global opportunities to India. Our business has really transformed in the past few years. It has not only doubled in size, but it has transformed in the content to be much more competent and competitive to win and serve local Indian businesses.

Television is no longer live (most people record and see a programme and fast forward advertisements) or on a single screen. How is that impacting advertising?

I have been in the industry both on the agency side and the client side now for some time, and there has been a long history of people predicting the death of television. Eventually television is under pressure, but it is still the largest medium in India, digital is now No. 3. I think what is more interesting is the interplay between the mediums. For example, performance media—search—the majority of search is being conducted at the same time someone is absorbing television. It’s the interplay between these two that allows you to become much more sophisticated. I don’t view it as one silo channel going down versus another silo channel coming up. What’s happening with convergence is, people are absorbing media at different places in different times and often in overlapping ways—search and TV being chief among them.

What is your strategy for mobile advertising?

There are no generalities other than when you look at digital advertising spending—it is growing three times traditional advertising spending, so we expect global advertising spending to be at 5% and we are seeing digital advertising spending grow at about 15-16% a year. Mobile spending is about double that. So, you are seeing companies investing in mobile at the rates of around 30% globally now. But if you look at a market like India, that’s very different. Mobile spending is the fastest growing segment, (with) much higher rates of adoption particularly in the rural areas, which are becoming increasingly important. I think there are some regional differences in how global and mobile are playing out, but mobile is going to become far more standard in developing markets. Maybe even the first interface. I don’t expect the world market to go the way, for example, the US market went from desktop to mobile. I think desktop will be skipped in some markets, going straight to mobile and that’s what is happening here in India. You see it happening in Sub-Saharan and West Africa.

Agencies have to have the capability to embrace all the new technology and really deal with mitigating the cost of complexity for clients. Right now all these channels are blending, it is becoming more borderless. Still, the bottom line is we have got to be great storytellers with great ideas and content that engages people, but the technology itself is going to allow you to get much closer to people and in real time. Brands are going to be able to talk to their consumers and have that two-way dialogue.

I think augmented reality and geo-targeting is going to be a very important part of what’s going to happen to mobile. We have really interesting technologies there. There is a variety of ways that technology is going to allow us to interface with human beings and we have always been at the nexus of that.

Which are your three biggest markets and where does India stand?

India is now, I believe, at number 12 in our global markets. Our top three markets are obviously, Japan, US and China. In the APAC (Asia-Pacific) region, India is the fifth largest market with $50 million in revenue.

What are the big global trends at this point?

The two trends that are ubiquitous across all markets are globalization and convergence. So, all brands now have to deal with introducing themselves on a consistent basis to consumers, who may not know them. And because of technology, they have to engage them much closer to the point of transaction and in real time. That’s an ongoing trend that is affecting not just the way they communicate, but it is actually affecting their business. The more digital media becomes a part of people’s plans, it gives them access to Big Data and the ability to analyse that data allows you to tailor to consumer needs. Globally, consumers, especially in specific markets in Asia, are getting far more comfortable with the idea of online transactions—much more trusting in acquiring products online. That’s another area of potential explosive growth.

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Published: 01 Oct 2014, 12:29 AM IST
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