When IPG Mediabrands decided to launch in India, not many would have predicted that the company is betting big on India. Commanding a market share of 18-19 per cent, the agency is on an expansion spree in the country. In the wake of growing competition, the company believes in leveraging advantages that come with consolidation. In this space, GroupM commands nearly 38-40 per cent market share and Madison Media, at around 12 per cent market share with its agency brands Madison and Platinum. IPG Mediabrands’ decision to consolidate Lodestar UM, Initiative and later BPN apart from Lintas Outdoor and Reprise has helped in capturing a significant market share.
Older players have consolidated their business and players like Mindshare and Starcom MediaVest Group have started focusing on the Indian market. New players are also emerging and some of the existing ones have started reinventing their strategies to keep the pace alive.
Recently, IPG Mediabrands acquired Interactive Avenues (IA), which is possibly the largest deal in the digital space. Post the acquisition, IA will become part of the Mediabrands Audience Platform (MAP). In the new MAP structure, IA will sit alongside Reprise Media and IA's cofounder Amar Deep Singh will be the MAP India CEO. The timing of the development in India couldn’t have been better.
Matt Seiler, CEO, IPG Mediabrands Worldwide said, “It is big news for us and Interactive Avenues has been right choice because we have been working very close with them. This acquisition puts the agency in good shape for the near future.”
Citing the reasons behind the acquisition even after having a digital agency, Reprise Media, Amar Deep Singh, CEO, Interactive Avenues said, “Interactive Avenues, which is a full service digital agency and Reprise Media, complement each other. They also work as conflicting brands so they help us handle conflict as well.”
The deal was underway for the past 18 months and after meeting up possible partners, IA zeroed in on IPG Mediabrands eight months back.
Advice to the leadership
The agency has seen the appointment of Shashi Sinha as the CEO of IPG Mediabrands in India. Playing the part of a facilitator and enabler, Sinha is gearing up for the challenging role. Seiler believes that it’s not a lot about market share, but about a delivery for clients. “I will not be able to reveal what Sinha is committed to, but it’s at least consistent with 25-30 per cent compounded growth if not more,” he added.
Seiler further said, “Sinha is one of the best leaders in the whole of IPG. He can take responsibility for the client’s business and utilise the assets to the best. Lynn D'Souza was also a terrific partner and had in-depth understanding of the market. We have always seen great consistent leadership with cultural symbiosis.”
Establishing a stronger foothold in the G-14 market
The G14 has four markets from Asia Pacific, the other three being China, Japan and Australia, two markets in Latin America and eight markets in Europe.
The G-14 markets are significant for the new IPG Mediabrands and India needs to establish a stronger position in the G-14. Seiler elaborated by saying that acquisition of the Interactive Avenues is a great move and India has a tremendous opportunity of growth right now as compared to other developing markets.
Singh believes that IPG Mediabrands presented the best partnership for growth and Seiler has the vision of creating India as the digital hub for the region that presents a huge opportunity to grow the brand. “That’s how significant the Indian market is in the G-14 scheme of things,” added Singh.
The Pay-For-Performance Area
Pay-For-Performance model implies that Mediabrands would take its compensation solely on the success of the clients. IPG hired McKinsey & Company and worked with them to make the Pay-for-Performance model work in the industry. Seiler explained, “Procter & Gamble (P&G) had asked for this 30 years ago. Then there were agencies without any differentiation and P&G had said that they would like agencies to sign up for the outcome of their business, and all the agencies denied because they cannot be responsible for pricing or promotion or competitor activity.” Agencies told P&G that they only made the ads, so P&G couldn’t pay them.
Seiler added, “We are actually delivering a value and value is correlated to what matters most for our clients. As we have created more silos within the organisation, there is more rationale on why an agency cannot take total responsibility for the client’s business. We as an industry have to get over the silos and start thinking about where the client’s business is and how to get the people there and achieve the goals together.”
Data collection and measuring effectiveness are the most important contributors towards the move in the direction of Pay-for-Performance.
Challenges and future ahead
With the new structure after the acquisition of Interactive Avenues and move towards integrated offerings, Seiler and Singh feel that a lot of the challenges have been met. With significant assets like Lodestar UM, Initiative and BPN apart from Lintas Outdoor and Reprise, the overall Mediabrands Audience Platform (MAP) structure wipes out many of the challenges.
With changes happening in media and marketing in the world, the future remains quite unpredictable. According to Seiler, there will be agency groupings that will have a look and feel different from one another. Right now, all the holding companies/groupings are more or less the same. The opportunity going forward is not to have a media group or agency like everybody else.
“We believe in working with determination towards stable performance that probably seeks us an alignment with client business needs. We are working on things that matter to our clients and the people around us,” Seiler said.