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More media consolidation with Omnicom and IPG strengthening India presence

14-May-2007
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More media consolidation with Omnicom and IPG strengthening India presence

Action in the Indian media agency business may be just headed towards more consolidation. Omnicom’s decision to launch its media arm OMD standalone in the country had media professionals speculating on what the relationship would be between the other media assets that Omnicom has in India and OMD.

Where this was still playing on the to the attention of a few, Interpublic Group (IPG) got wondering on what it would do with the media side of the business, once the 100 per cent transfer of shares from Lintas India to IPG would complete. IPG already has history in ‘belief in consolidations’ when the media conglomerate decided to merge Lodestar Media with Universal McCann in India to create Lodestar Universal.

Publicis Groupe laid down the importance on collective strength when it consolidated only the buying functions of its media assets -- Starcom and Zenith Optimedia, and launched Indian Media Exchange (IMX). WPP’s GroupM is probably the trendsetter in that style of working with its Central Trading Unit that buys for all GroupM media brands.

Prem Mehta, Chairman and Managing Director, Lintas India, suggests that the consolidation of media assets for IPG is a strong possibility in the future but not something that has already been decided upon. He explained, “Consolidating of a function or discipline like this is really consolidating expertise, and that comes with some advantages like better competence and clients interacting with one instead of many. Also, the scale does help you.”

The establishing of IMX and the working of WPP do impress that volumes can be the name of the game in the media business in India. However, Mehta is quick to point out that volumes can help only up to a certain point. He said, “The intention of leveraging strengths together should not be about volumes even though it tends to be. It should always be on the quality of services that you offer to clients.”

Would IPG be looking at consolidating any one function of its media or its media assets per se? Mehta replied, “I do not think that really is the way to look at it right now. It is very early to say how we take this forward. We will surely develop the right strategy keeping in mind factors like capabilities, tools, research and most importantly, resources. We are very conscious about protecting advertiser interests and our own units.”

If the industry word is anything to go by, it is just a matter of a few months before the media consolidation of Omnicom and IPG begin. As for the implications of this on the industry, there is still some time to know how media working changes with these developments.

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