Mumbai: Advertising network Leo Burnett Worldwide Inc. and its subsidiary Arc Worldwide Inc. are both present in India. Their clients include Procter and Gamble Co. (P&G), McDonald’s Corp., Kellogg Co. and Philip Morris Companies Inc. Tom Bernardin, chairman and chief executive officer of Leo Burnett Worldwide, spoke about his plans for India, including merger and acquisition (M&A) ambitions, and the agency’s HumanKind platform. Edited excerpts:
What are your M&A plans for Leo Burnett globally and for this market?
We are looking at everything in this market and others. From a pure acquisition point
of view, there will be businesses that complement us, such as digital. We could look at small agencies in some parts of the world, whereby acquiring that creative agency we get talent that we are looking for and certain client bases.
Special role: Leo Burnett Worldwide chairman and CEO Tom Bernardin says the agency would be interested in developing India as a production hub for offerings such as TV commercials for the Asia-Pacific region. Abhijit Bhatlekar / Mint
In China, we have made acquisitions in the last 18 months; some of which are still closing. One practical strategy was to acquire Yong Yang, a retail agency in China. We also acquired W&K, a local agency based in Beijing. EmporioAsia was yet another acquisition (in digital). We bought that agency primarily for talent that’s there. That should give an idea of the kind of companies we are looking to acquire.
In India, I would certainly be looking at a small creative agency that would augment the very strong creative reputation that we already have in this market (with Leo Burnett India). I would be interested in digital talent in the form of a digital agency or company in India.
We are also looking at the acquisition of talent. Acquisition of sheer talent of people (may be not in this market, but) in other markets who, for reasons not of their own, will be out of job. I believe strongly in being predatory when it comes to bringing top people in any market.
Is India being earmarked as a hub for Leo Burnett Worldwide?
Rather than outsourcing some digital work to an outside supplier, we could look if there’s an opportunity to bring some of that to India (to Leo Burnett India) just as long as we can demonstrate the efficiency and the speed of delivery. It’s not unlike what we are doing in other markets. In Western Europe, we have bundled Germany, France, Italy and Spain together, and we are looking for France to be a retail centre for those agencies.
We are looking to do something like that with India for Asia-Pacific or beyond Asia-Pacific for production. We may have India as a centre of production for television commercials and other forms, and then export these services to other markets in an efficient and cost-competitive way. It will bring revenues from outside our network back in. But will we only limit it to production? I think that would be too small-minded. We are looking at other areas, too, for this market.
What is the new HumanKind Brand platform?
Our strong belief is that people are the centre of everything that we do. If you understand people and their behaviour, you would understand that a brand has to fit into a human purpose. We first have a dialogue with our clients on what’s the purpose of their brand; and once we agree on what the purpose is, we begin work on the brand. We call this the HumanKind approach.
McDonald’s is a great HumanKind brand. It’s pretty much the same around the world: simple, easy enjoyment. Human purpose is just that simple.
Another example is P&G with the “Have a happy period” work. It’s placed on the human purpose that there’s a certain segment of the female population that thinks it’s OK to talk about their period. It’s a special time in the month when they should be pampered a little.
Tangible results: McDonald’s is one of the few companies in the US that has benefited in stock price and increased in market share as well around the world.
P&G increased its market in the feminine hygiene category.
Leo Burnett has been criticized as having an outdated model that focuses too much on traditional media and television and not emerging media opportunities, thanks to many TV-centric clients.
Yes, there is such a perception. What drives this perception is that we are a very large agency with brands such as Philip Morris, McDonald’s, Kellogg and P&G. But the fact is that we do a lot of award-winning, sales-driving digital work.
In this market itself, we have done digital work with Tata Tea for the Jaago Re campaign. We are trying to sign up at least a million young people and get them to vote.
We have 30 million hits on that website already.
The other little known fact is that we have the largest digital creative department in the US within Leo Burnett. We have at least a couple of hundred digital creatives. Plus, we do tremendous amount of digital work for P&G in the feminine hygiene category. Also for Nike in Japan.
Around 20% of our overall revenues come from digital. Also, since people and human behaviour is at the centre of everything, television is the dominant and efficient way to reach mass numbers of people. It’s all about the screen now, and we are good at that. But we are also good at all the things that happen behind it, and we have case studies to prove it.