Advertising major Ogilvy & Mather is to acquire a majority stake in Hyderabad-based start-up digital company PennyWise Solutions, the brain child of five alumni of the Birla Institute of Technology and Science.
PennyWise Solutions is a digital technology and production company. Its clients include Vodafone India, Johnson & Johnson, JMP Solicitors and Fabmart, among others. Founded in 2003, it has over 140 employees. The terms of the deal were not disclosed.
Speaking exclusively to Business Line , Piyush Pandey, Executive Chairman, Ogilvy South Asia said, “Though we are the strongest digital company in the country, it is our endeavour to find more digital talent and expertise. We are keen to add to our strengths.”
Stating that the company had “looked at many potential digital candidates before honing in on the ideal partner who shares the values of O&M,” Pandey added, “If we look at communication companies in today’s age, the share of the current form of advertising is growing. But if you look at the growth rates of digital companies, there is a lot of potential out there. Every company has to change and evolve and add to their core strengths. That is the main purpose of this acquisition.”
The majority stake in the digital firm ties in with the stated aims of WPP’s Chief Executive Martin Sorrell, who has repeatedly said the company would continue to focus on digital and on customer insights in fast growth markets. WPP is an advertising, marketing and communications conglomerate with reported billings of GBP 22.74 billion as of June 2013. O&M is its Indian subsidiary.
Parent WPP has also decided to accelerate its strategy of investing in digital agencies in the wake of the Publicis-Omnicom merger in July, that is set to create the world’s largest advertising firm estimated to be worth more than $30 billion.
PennyWise Solutions specialises in digital solutions, ranging from custom application development to Web development, to digital advertising, social media monitoring and data analytics. Despite their name, the team of BITSians, the Pennywise team, does not rely on pricing to keep their customers. They provide a personal touch, especially important to smaller businesses, according to CEO, Anand Morzaria.
Though there were several digital firms up for grabs, O&M’s Pandey said, “It is a strategic investment. What broke the ice is the expertise of the people that we are going to associate with. Though we look at the health of the business, their client roster and their relations with corporates, there is a due diligence that goes beyond numbers.”
The latest majority stake is by no means the last in O&M’s string of acquisitions. “We would still be scouting for like minded partners who are good at what they do. As for budgets, we don’t work by budgets. If we find good people, we find the budget,” said Pandey.