Known for its rich culture and diversity, India has been home to not just homegrown or independent ad agencies but also to the various agencies which come under the umbrella of Global Networks such as Publicis Groupe, Omnicom, Dentsu, WPP, Interpublic Group, etc.
In the recent past, there has been a sudden increase in the focus of global ad networks on the Indian subcontinent be it in terms of expansion, merger or even stake buys, given the growth of adex in the market.
A recent report by Magna states that India had the largest year-over-year increase of +12% in adex reaching $14 billion in 2023.
Sharing his views on the same, Shashi Sinha, CEO, IPG Mediabrands India, stated that India has always been an important market for global networks because advertising is just a reflection of what brands and top companies do.
“The fact of the matter is that two of the three top markets in the Asia Pacific comprises China and India in Asia and Australia in the Pacific. And being the large market that Australia is, it is on the seacoast to the US which is why it has always connected the networks there, but in Asia, while China may be a far bigger market with higher GDP and adex because of the growth of SMEs in the region, but in the last few years, it has become a very unpredictable market for the long run,” he said.
He then went on to add that India, on the other hand, has also grown in terms of power and is far more balanced as a country. Hence while there was emphasis on India, there wasn’t a very strong focus, but now with the way the Indian market has evolved and become more balanced, most companies have started viewing it as a global network.
“The way the world is becoming today and the growth of digital in the region has also made networks realise the potential that India has and therefore, they have also started focusing on the Indian market relatively more today,” he added.
Along similar lines, Sandeep Goyal, Chairman and MD, Rediffusion, also pointed out that the primary reason behind the growing focus of network agencies on the Indian market is rooted in the fact that the growth in all other markets has dramatically slowed down in the past couple years and that in such times, India is a market which is growing 7-8% increase on a YoY basis in most businesses and not just advertising.
The other reasons why India is becoming an all the more attractive market today include the very low cost of acquisitions in the country, the size of the market in itself being very small and because every one in six human beings on planet Earth are now Indians.
“The combination of both, potential for growth and the fact that pricing is reasonably low, makes it attractive for a lot of these networks to want to acquire companies in India and strengthen their presence in the country. However, the track record of most of the acquisitions made by the Network agencies in India has been very poor because even when they buy them, they don't know what to do with them. After all, there is a fundamental error in the way these acquisitions are done,” he said.
The primary reason behind acquisitions taking place, as per him, is because the primary shareholder, most likely the founder, wants to exit, but what the networks don’t realise is that the entire business is built around that founder and therefore the moment he/she goes away, there remains no reason for clients or employees to stick around, resulting in the empty box syndrome.
As per John Wren, Chairman and CEO, Omnicom, as well, India is poised to become the most populous nation on the planet and therefore India has become an important growth engine for the network.
This was one of the primary reasons why Omnicom decided to centralise the leadership of three creative powerhouses- BBDO, TBWA and DDB in the region to create Omnicom Advertising Services to deliver a wider breadth of capability and scale for its clients in an integrated manner.
In an earlier interaction with BestMediaInfo.com, Devika Bulchandani, Global CEO, Ogilvy, also stated that looking at the performance of Ogilvy India, not just in the Indian market but on the global stage, it wouldn’t be wrong to say that Ogilvy India is the crown jewel of Ogilvy as a whole.
She said, “Along with the growing economy in India, creativity coming out of the Indian market is altogether at a different level. You can see India everywhere. There's also greater consciousness in India. While the Western world is going gaga over data and technology and performance marketing, the Indian advertising industry continues to be driven by storytelling and creativity.”
Speaking to BestMediaInfo.com, Rahul Mathew, Chief Creative Officer, DDB Mudra Group, also pointed out that while the India story has been building over the last few years, it is owing to the global economic slowdown to a snail’s pace that India has been shoved even more into the spotlight.
The easier way to establish a strong foothold in a complex country like ours, in his opinion, is through the home-grown players, who know the lay of the land better, but the trick lies in figuring out how to protect what made these home-grown players attractive while using the power of the network to scale faster.
“For DDB as a network, creativity plays a crucial role, and all agencies that carry forward this belief, are important. At DDB Mudra Group as an agency, we work hard to make sure that we measure up to the high standards set by the network. It’s a high bar that has been set for all of us; not just in terms of award shows, but for every piece of work that we do for our clients,” he said.
With this, he also opined that as long as one doesn’t kill the goose to get more golden eggs, this should be an exciting time for all Indian network agencies. Even though enough economists have predicted India to be among the top 3 economies shortly, the question, in his view, always revolves around whether the networks see India as their current bail-out plan or an investment in the future because the networks that build more strength into their Indian agencies will have more flex in the future.
According to Kosal Malladi, Vice-President, Madison Loop, the Indian advertising industry has grown significantly in the last few years, and it is Digital that has leapfrogged the desktop age to account for nearly 38% of the Adex as per the Madison report. This has, as a result, opened up numerous unprecedented touch points for brands to leverage and today, standing out from the clutter is the biggest challenge for any brand. But as they say, with great challenges comes great opportunity, hence it is the global networks that are looking to leverage this opportunity.
“Currently, there is a huge headroom to grow in the market. However, the problem is the commoditisation of the industry. To stand out from the crowd, we need to focus on interesting work that goes ‘viral.’ And what is the secret of going ‘viral?’ Do great work!” he added.
With this, he also went on to mention the three challenges associated with the Indian market which include- India is not one market but multiple markets within one due to which consumer behaviour and language change every few hundred miles, India works on a ‘jugaad’ mentality which is why people do not mind bending the best practices as long as the results are visible and lastly, given that traditional and modern are at constant play with each other in the country, finding the right balance is the key.