Marcom co Draftfcb eyes buys in UK, China and US

| Updated on: Feb 15, 2011
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Global marketing communications agency Draftfcb, part of the Interpublic Group, is set to expand its digital portfolio. The agency is close to announcing acquisitions in the digital space in the UK, China and US markets.

First acquisition

The first such acquisition is expected in the UK in four-to-five weeks, and the one in US is expected in four months, according to Mr Laurence Boschetto, CEO and President, Draftfcb, who is in India for subsidiary Draftfcb Ulka's 50th anniversary celebrations.

Speaking to Business Line , he said, “Digital is certainly going to be the centre piece of every agency going forward. As we look at expanding exponentially, across the world, we are considering ways to strengthen our portfolio to service clients holistically. We must understand that the way consumers interact with brands has changed a great deal in today's world. In the digital space, we have identified opportunities for acquisitions with like-minded companies in the UK, China and US markets.”

Experiential marketing

Without naming the digital agencies that would be acquired, Mr Boschetto explained that the move is part of a global exercise across Draftfcb's nine key markets to identify opportunities that could fuel the agency's growth. Among focus areas, besides digital, are retail and experiential marketing. The agency claims a presence in 95 countries, and employs over 9,200 people.

Draftfcb's nine key hubs, according to Mr Boschetto, are New York, Chicago, UK, India, Shanghai, Sao Paulo, Johannesburg, Dubai (West Asia ) and Hamburg.

The nine key markets account for 80 per cent of the agency's revenues, with India ranking fifth on the list.

In India, the agency is evaluating expansion routes for its existing digital practice as part of DraftFCB Ulka, either through infusion of talent or by acquiring specialist digital agencies.

“We've been going through a very intense planning process. While we've been celebrating the last 50 years and the growth that has happened in these 50 years, we want to figure out how to raise that momentum,” explained Mr Boschetto.

On whether the agency prefers the acquisition route or the organic expansion route in the digital space, he said, “It's been different in different markets. It's a function of the lifecycle stage that the company we're speaking to is in, and the client mix. If we have existing clients who ask us to help them in the digital space, they're not asking us to acquire an agency — they are asking us to bring in the resources. In another market, where we don't have clients asking us that, then the better way to build a portfolio in digital would perhaps be through an acquisition.”

The agency has not arrived at the specific way forward to expand its digital portfolio in India, but is not ruling out the acquisition route.

Ulka Advertising, founded 1961 by Bal and Ann Mundkur, became FCB Ulka in 1997 when Foote Cone & Belding (FCB) acquired a 51 per cent stake.

In 2007, Draft Worldwide and FCB merged globally to form Draftfcb. The merged entity acquired the remaining 49 per cent in FBC Ulka, giving birth to Draftfcb Ulka.

Published on February 15, 2011

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