NEW DELHI: Advertising firm Dentsu Aegis Network (DAN) said that 48% of its revenue is coming from its digital agencies a decade after it restructured its operations to become digitally focused. The network owns eight digital agencies across search, creative, media buying and social functions.
“Nearly half of our revenue is coming from digital. Out of the 3,500 people 1,700 of them are in digital agencies and out of 23 agencies we operate in India, eight are pure digital agencies. We have become the largest buyers of digital in India including for Google and Facebook," said Ashish Bhasin, chairman and chief executive, South Asia, Dentsu Aegis Network.
DAN claimed that it has closed 2018 with a total billings of over ₹6,000 crore including both mainline and digital businesses. Industry estimates state that the Dentsu has won more than 50 digital accounts last year including Uber, Colorbar, Marks & Spencer and Tata Motors Passengers Vehicle among others.
“Ultimately you have to go where the consumer is going and they are moving to digital much faster than what agencies and brands have predicted. Our objective is to create solutions for our clients which help them connect with their consumers," said Bhasin.
Aegis Media (which was acquired by Dentsu to create DAN) started the digital transformation journey in 2008 by launching the global digital agency Isobar in India. The network made its first acquisition in the form of digital consultancy and search marketing agency, Communicate 2 Pvt Ltd in 2012. It was rebranded as iProspect India in 2015. It went on to acquire multiple digital and social media firms including Sokrati (performance marketing), SVG Media (digital media), WAT Consult (social media), Fountainhead-MKTG (event and experiential), Webchutney (digital), and Fractal Ink (experiential design studio), besides other.
Over the years, Dentsu pumped over ₹2, 000 crore in acquiring agencies with digital capabilities.
“We do acquisitions only for strategic reasons. For us an acquisition should be done for its capability, something that gets you scale or is innovative. I don’t look at acquisitions for money. We entered the market 88 years after our competitors and realized that our competition was only focused on traditional media and not future-proofed. Therefore we started focusing on digital by growing in-house and acquiring businesses which could build our digital capabilities," said Bhasin.
In the last two-three years, digital has grown about three times the rate of the advertising industry’s growth which has been hovering around 10%. The Indian ad industry stands at ₹ 61,878 crore and is expected to touch ₹ 85,250 crore by 2021 growing at a compound annual growth rate (CAGR) of 10.62%.
However, the digital advertising industry is estimated to grow at a CAGR of 31.96% to reach ₹ 24,920 crore by 2021 said a latest report from Dentsu Aegis Network (DAN).
The overall pie of digital in the ad expenditure is growing too with digital expected to contribute 29% of the ad market size by 2021. The current digital ad spends stand at ₹ 10,819 crore, contributing 17% to the total expenditure of the advertising industry.