Sandeep Goyal is looking to build on his presence and investments in the digital space, especially mobile, post Dentsu Inc's buySout of Mr Goyal's 26 per cent stake in the three full service advertising agencies that formed the Dentsu India Group.

Mr Goyal had helped Dentsu enter India through the joint venture with Mogae Consultants, of which he is President. Mogae is reported to have pocketed a sum of Rs 240 crore for the 26 per cent stake (not confirmed by either Goyal or Dentsu). Dentsu India Group claims a billing of Rs 1,200 crore in 2010.

Mr Goyal's interests outside the three agencies – Dentsu Communications, Dentsu Marcom and Dentsu Creative Impact – include Turmeric Vision with chef Sanjeev Kapoor, which runs television channel ‘Food Food', and his digital media venture developed alongside Dentsu India. Malaysia's Astro All Asia Networks has invested in both these entities.

While admitting that he has been in talks with some television channels looking for investors or buyers, Mr Goyal is quick to clarify that nothing concrete has materialised so far. In the digital media space, he is looking to build on initiatives such as the Indian Fantasy League and lastminuteinventory.com. He is also convinced about the timing of his exit from Dentsu.

Right time to exit

Speaking to Business Line , Mr Goyal said, “Dentsu India is on a high, with an enviable set of clients, healthy profits and no bad debts. It took us seven years to reach this scale (Rs 1,200 crore). To reach the next stage, of about Rs 5,000 crore in billing, would take another five to seven years. The question is whether that was worth doing. I feel it is easier to create that kind of value in the digital space, where we already have a good head start.”

Given his non-compete clause with Dentsu, Mr Goyal would need to stay away from mainstream advertising for five years. The clause does not cover digital and mobile initiatives. As part of the deal, Mr Goyal has bought out Dentsu's stake in these two initiatives.

In a statement confirming its buyout of Mogae's stake, Dentsu noted that with the move, it will be able to expand its business domain from advertising to other areas such as sports and digital-related services.

Moblie VAS space

Mr Goyal noted, “With 3G coming in, I see enormous potential for mobile VAS. It's a level playing field, with no large entrenched players. Astro has presence in more evolved markets and that should give us an advantage too. I have been to Israel last year to explore possibilities and evaluate products available there. I was in Silicon Valley two months ago and will be going there again shortly. The idea is to identify relevant products and adapt them for the Indian market.”

Not lucrative

The advertising veteran also noted that the ‘business' of advertising was no longer as lucrative as several others that one could pursue in the Indian market today, given increasing costs, reduced payments from clients, and a receding talent pool.

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