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Business News/ Companies / Aegis to invest $100 mn, takes stake in search marketing firm
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Aegis to invest $100 mn, takes stake in search marketing firm

Aegis to invest $100 mn, takes stake in search marketing firm

Aegis Media Asia-Pacific CEO Patrick Stahle says the firm will consider local acquisitions in the area of Web production (Photo by: Abhijit Bhatlekar / Mint) Premium

Aegis Media Asia-Pacific CEO Patrick Stahle says the firm will consider local acquisitions in the area of Web production (Photo by: Abhijit Bhatlekar / Mint)

Mumbai: On the day that Mint and other newspapers reported that Aegis Media had hired Lintas veteran Ashish Bhasin to head its South-East Asian and Indian operations, the company’s Asia-Pacific CEO, Patrick Stahle reaffirmed Aegis’ commitment to India with $100 million (Rs428 crore).

That, Stahle said, is how much the global communications conglomerate will invest in India over the next few years.

Aegis Media Asia-Pacific CEO Patrick Stahle says the firm will consider local acquisitions in the area of Web production (Photo by: Abhijit Bhatlekar / Mint)

The partnership enables Aegis to club communication services from its media specialist company (planning and buying) Carat with search marketing services and launch Isobar, the global firm’s digital services arm.

Communicate2 may remain a separate brand under Isobar or merge in time with iProspect, Aegis’ global search marketing company which is part of Isobar, said Stahle. Communicate2’s founder and managing director Vivek Bhargava will continue to lead the company.

Significantly, the entry of Isobar marks a breakthrough, in terms of expanding the India presence, for Aegis Media.

Aegis Media has companies such as Carat and Synovate, which are already here, Isobar, which has now launched in India, and Posterscope (Aegis’ out of home specialist), which will launch here by the end of the year. Velocity, Aegis’ global sports marketing arm, will launch soon. And Vizeum (Aegis’ other media specialist brand) will launch only when Carat expands enough that there is room for another brand to handle conflicting business.

The global Internet advertising market is worth around $15 billion by revenues and is poised to grow rapidly, says Aegis. In turn, the Indian online advertising market is expected to grow from Rs480 crore in 2008 and touch Rs1,100 crore by 2012, growing at a compound annual growth rate of 32%, according to a report by industry lobby Federation of Indian Chambers of Commerce and Industry and audit firm PricewaterhouseCoopers.

“The rapid growth of search engine marketing is a very important element of the overall growing online advertising landscape. Advertisers have a great advantage to leverage the growing number of Internet users who control a large portion of the disposable income of the country," said Bhargava of Communicate2.

Stahle told Mint that Aegis Media will consider local acquisitions in areas of Web production and digital creative development, which will come under the Isobar banner. He added the company would would consider local acquisitions and alliances for Velocity also. There is no scope for acquisitions in out of home since Posterscope runs on a consultancy model and is not a site owner, said Stahle.

According to him, one area where the company will look for an acquisition is customer relationship marketing, which is governed by local laws unique to each market. These various pieces will be driven by Bhasin. Bhasin will have his work cut out with Carat particularly, since the company has been plagued with management issues and slow growth. The Jyothy Laboratories account, a significant business for Carat, is now up for review.

That doesn’t worry Stahle. He said that Aegis is at the end of the tunnel with a new structure, new management, and new services.

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Published: 12 Jun 2008, 11:56 PM IST
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