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India is where growth is, but it needs to get a few things right: Robert Lerwill, CEO, Aegis Plc

26-December-2006
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India is where growth is, but it needs to get a few things right: Robert Lerwill, CEO, Aegis Plc

India and China are the keywords for any international media organisation today, and Aegis is no different. After “uncluttering” itself from Percept, Aegis Plc CEO, Robert Lerwill, sees a range of activities in domains like outdoor, digital and market research that Aegis can undertake here. Like most his contemporaries, Lerwill sees India as a key area contributing to the global growth of Aegis Plc, but unlike most of his contemporaries, he has identified some areas that are slowing India’s growth in terms of advertising and marketing revenues.

Giving an overall picture, Lerwill said, “Internet penetration in China is far higher than that in India and the infrastructure for newer mediums isn’t there in India. Digital terrestrial isn’t here and no one has invested in cable television. You’ve also had the history of being skewed to print and television. TV is being monopolised by the state, your magazines have been declining, there may be increase in inserts in newspapers as substitutes for magazines – the dynamics are really what they are.”

“Also, you have a history here of being democratic, certainly capitalist, and the benefits or otherwise of inheriting in many cases, European English systems, which means sometimes in these things, evolution will be slower. Just to give an example, on a worldwide basis today, in 2005 over 5 per cent of advertising spends went in the Internet, 20 per cent of our advertising revenues comes from digital, but for India, the figure is only at 2 per cent,” Lerwill added.

He is, however, quick to point out that this also means that the growth potential in the country is huge. He said, “What I think will probably happen as a way of accelerating the use of Internet activities is that you may bypass the broadband and the fixed lines, which would be there of course, but you may move to mobile phones being used as Internet devices faster. 130 million mobile subscribers in India is a significant audience to look at.”

This brought Aegis’ plans under the scanner and Lerwill admitted that unlike countries which had Isobar (Aegis’ umbrella brand name for all its digital units) units like OneDigital in Australia, WWins in Taiwan and China, Fa Fa in UK and ICrossMate in Boston, there was nothing in India. “We can obviously provide resource from someone like WWins and OneDigital, but I think we need something in India. There are two ways of doing that – one is to grow it and one to acquire it – and I wouldn’t rule out an acquisition,” he added.

Acquisition might also be on the cards in the market research. “We are always looking for things like that,” Lerwill said, but hastened to add, “I don’t mean to say that we’ve found one. For an acquisition, more than what is available and on what terms, there always are other parameters. In our case, for instance, we would never buy something that we don’t have confidence in. The people or the business we would be acquiring would be likeminded.”

Summing up the ‘Aegis strategy’ that can be expected in India, he said, “We will grow capability in digital, ensure that we can get communications planning for clients, we can grow local clients, get local wins and also get global wins that we can then deliver to India. With the break up with Percept, we can be consistent with our overall philosophy without having to take cognisance of a partner’s willingness to be or not to be involved in a certain area or shareholdings or any of the other things that are meant to protect a JV, which may actually hold us back.”

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