Companies

Ad industry fights slowdown in 2011

Our Bureau Mumbai | Updated on December 28, 2011 Published on December 28, 2011

High-profile exits, promising beginnings…

yearender





When the ever-positive Chairman of BBDO India, Mr Josy Paul, says there has been pressure on the bottom line, we know it hasn't been smooth sailing for those in the ad business. Yet, his agency has grown from 55 to 90 people in 2011, and a clutch of new clients have come on board.

“There are pressures, but those are our opportunities. How far an idea can go, through whatever media and means, has become critical,” said Mr Paul.

The changing contours of communication are reflected in his campaign picks of the year: Anna Hazare and Kolaveri. Both have digital media to thank, offering an integration story for brands.

Movements, launches

Omnicom's stake in Mudra went up from 10 per cent to a majority in early November. Mr Bobby Pawar, Chief Creative Officer, joined WPP agency JWT as Managing Partner soon after. Earlier, JWT acquired controlling stake in Hyderabad-based Mindset Advertising, a long-term affiliate.

Ms Tanya and Mr Sandeep Goyal's Mogae exiting Dentsu India was another big headline. There are significant stories that followed their exit. Mr Gullu Sen and Mr Rajesh Aggarwal moved from Dentsu to set up ‘From Here On'.

Mr Sai Nagesh from Dentsu Media is now Managing Director and CEO at start up media advisory Polestar Content and Media.

Rediffusion YR saw some major exits leading to agency launches too: CEO Mr Mahesh Chauhan and Creative Head Ms Minakshi Achan joined hands to launch Salt Brand Solutions.

The agency's Chief Strategy Officer Mr Arvind Mohan launched a culture and branding agency Religious. Head of the media unit TME, Ms Divya Radhakrishnan, launched Helios Media, an integrated ancillary service provider for television broadcasters.

There are more new agencies. Former Lowe hand Ms Priti Nair announced the launch of her agency Curry-Nation in January. Mr Niranjan Kaushik of McCann Erickson launched Acid Brand Communications in partnership with former Contract (Design Sutra) creative Mr Sameer Desai.

Networks have claimed to be in the hunt for acquisitions, but very few deals have been reported. One that did was Publicis Groupe's acquisition of Mumbai-based Watermelon Healthcare Communications. Agencies with expertise in digital media, analytics and CRM will be in demand, said the head of planning at an MNC network agency.

KPMG: CAGR at 15%

Zenith Optimedia (ZO) expects ad spends in the Asia-Pacific to grow at over 7 per cent, aiding global growth of 4.2 per cent in 2012.

Except for the ‘quadrennial' effect of the Olympics, Presidential elections in the US and the European Football Championship, global growth would be at 3.1 per cent, according to ZO.

In India, a KPMG report (with FICCI) released in March 2011 pegged the ad spend at Rs 26,600 crore in 2010.

It was expected to cross Rs 30,600 crore in 2011 and Rs 35,200 crore in 2012. The next report will be out in March 2012.

Mr Jehil Thakkar, Partner - Media and Entertainment, KPMG India, said, “We should have companies report numbers by mid-January. My estimate is that the sector has seen grown by 8 to 10 per cent this year - a bit under what we predicted. But we stick to our 15 per cent CAGR projection for 2010-15.” This would be in line with the GDP, he added – advertising's growth rate is typically double that of GDP.

Whether growth will spike in 2012 will depend on macro-economic factors that can boost consumer spending.

‘People business'?

There is also the worrying trend of senior talent exiting the agency business.

Mr Suman Srivastava, former CEO at Euro RSCG, launched ‘Marketing Unplugged', but that at least is in the space of marketing.

The former CEO for South Asia of Starcom MediaVest Group Mr S. Ravi Kiran has co-founded a growth advisory for tier-2 and tier-3 focused businesses, ‘Friends of Ambition'.

The advertising story of 2011 was one of people. One of the newsmakers, Mr Sandeep Goyal, spent a good part of the year getting his second book ready. Scheduled for a 2012 launch, The Witches of Worli will also tell some interesting people stories.

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Published on December 28, 2011
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