Holding on, bolstering Indian resources

Holding on, bolstering Indian resources
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First Published: Tue, Oct 16 2007. 10 57 PM IST

Marion Arathoon
Marion Arathoon
Updated: Tue, Oct 16 2007. 10 57 PM IST
Marion Arathoon
They’ve been called behemoths. Leviathans. Monstrous— adjectives that seek to describe the sprawling might of global marketing communications holding companies such as the Omnicom Group, Interpublic Group (IPG), WPP Group Plc. and Publicis Groupe. Once mere holders of global advertising networks, these groups are now bonafide brands which are actively taking part in pitches for global ad or media buying accounts.
Dell Inc.’s $760 million (about Rs2,987 crore) ad business recently sparked a holding company battle, with the above groups creating marketing services teams in attempts to win traditional and non-traditional ad duties for their various member ad networks. Samsung Electronics similarly invited holding companies instead of individual agencies to pitch for its global $400 million ad account. Nokia Inc.’s and Visa Worldwide’s media businesses are also being vied for by holding groups.
Ensemble strategy is at work here: a holding company can cherry-pick best-of-breed talent and tools from across its ad networks, specialists units and geographies to help win and service such global business. It is a win-win, especially for global advertisers who can deal with a single communications group across markets instead of multiple agency specialists. They can synergize brand image more cohesively across media platforms and markets, maximize efficiencies and cut costs.
What has this got to do with us? Well, our ad teams are increasingly part of such global pitches, since holding companies have to demonstrate India and China capabilities to win such accounts. That’s putting our talent on the global map faster. Meaty businesses won by the holding company are also aligned with their India ad agencies.
Each of these groups is now bolstering its ad and media buying resources in India to grow business. For example, everyone—from incumbents IPG and WPP to a newly aggressive Omnicom Group—seems to be vying for Hindustan Unilever Ltd’s expanding business.
The beauty of group-level pitches is that they usually skirt the vexed issue of business conflicts. Once a group wins the business, it can zero in on a member ad network which does not handle competing brands to handle the account.
That rule doesn’t always hold good, though. IPG’s Initiative Media recently exited the $2.3 billion AT&T media review, based on the client’s conflict policy. The media duties of AT&T’s rival, Verizon Inc., are handled by fellow IPG media agency Universal McCann. Initiative said it would not be possible for it to draw all of the resources across IPG required to best meet the client’s needs.
Marion Arathoon is Mint’s advertising editor. Yourcomments are welcome at advalue@livemint.com.
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First Published: Tue, Oct 16 2007. 10 57 PM IST