Mumbai: Consumer products maker Procter and Gamble India (P&G) has handed its media planning and buying business to MediaCom India Pvt. Ltd, in which Madison Communications Pvt. Ltd announced on Tuesday it had acquired a 51% stake.
A combine of erstwhile rivals Madison Communications and MediaCom had pitched for the business as first reported in Mint on 5 March. Madison group chairman and managing director Sam Balsara’s acquisition of a majority stake in MediaCom came as a surprise, but one that could prevent a potential conflict with Hindustan Unilever Ltd (HUL).
Madison group chairman and MD Sam Balsara (Photo by: Asesh Shah /Mint)
MediaCom was part of WPP Group Plc.’s GroupM India, but Madison’s announcement further said that GroupM would no longer “be involved in managing the company”. The financial details of the transaction were not disclosed.
Initially, MediaCom wanted to buy a majority stake in Madison, but the exact opposite happened for what media buyers term strategic reasons. As reported by Mint, HUL had objected to a GroupM firm possibly handling competing P&G business since HUL’s media business is handled by GroupM’s Mindshare India. The consumer products business is a highly competitive one and firms zealously guard their brand strategies and communication plans.
MediaCom does handle some P&G business in other markets, but the issue in India was that it would be co-handling the entire P&G business, say buyers. HUL had reportedly threatened to pull its entire media business out of GroupM if it won the P&G business. The buyers, who did not wish to be identified given the sensitivity of the issue, said that this put MediaCom in a bind. The agency couldn’t say no to HUL and it couldn’t say no to P&G either, they added. Thus, MediaCom in India will cease to be a GroupM firm even as it remains part of the group in other markets. “GroupM is supportive of WPP’s call to form an independent joint venture, keeping the clients larger interests in mind,” said Vikram Sakhuja, GroupM India’s CEO.
Executives at HUL declined to comment.