Jack Klues, chairman of the US-based Publicis Media Groupe, one of the world’s largest advertising agencies, flew down to Mumbai on 20 February to announce the launch of the India Media Exchange (IMX).
The new entity, he said, would consolidate and manage the buying functions for the Starcom MediaVest Group—which handles clients such as Jet Airways and Future Group—and ZenithOptimedia—which handles accounts such as Nestle and British Airways.
With a combined annual billing of Rs1,500 crore, India Media Exchange will allow Starcom MediaVest and ZenithOptimedia to negotiate better rates with media owners. It will help them offer customized solutions to clients.
Beyond this, however, both companies would continue to function as individual entities and “there may be times when they even compete with each other,” Klues says.
Size does matter and the Publicis Groupe is banking on IMX to create some sort of level playing field with existing competition in the market. “The whole idea is to put the equivalent of an 800 pound gorilla in the room,” says Klues. He was referring to their closest competitor, the WPP-owned GroupM, which stands tall with billings of approximately Rs3,000 crore, twice that of IMX.
However, while scale is important, the company would “not wield it (consolidated strength) like a club, but leverage it as a passport for better solutions,” he says. Industry sources, who did not wish to be identified, point out that most media buying agencies of this strength are known to arm-twist media owners into offering better rates.
IMX will be headed by president Shyam Shanker, who has worked with Blow Plast Ltd, Dabur India, Shaw Wallace and Bennett, Coleman and Co. in various capacities.