Is merging of agencies behind the exits at dentsu?

exchange4media speaks to insiders at dentsu on the dissent brewing at the network on account of doing away with popular agency brand names for the sake of consolidation

e4m by Neeta Nair
Updated: Sep 13, 2021 10:48 AM
Agnello

It has been two very long weeks for dentsu International since Agnello Dias decided to part with the network after first turning consultant. The successive exits only ensured that the industry’s lens remained focused on dentsu. exchange4media has learnt how merging of high credibility brand names like Webchutney, Taproot etc with an international brand like Mcgarrybowen did not go down too well with dentsu leaders. The industry seems to concur too.

In the run-up to the exits, some of the agencies complained that there was excessive interference from the network, and that employees too were unhappy. But what has really stuck out like a thorn for most of the top leaders whose agencies had been acquired by the group, insiders say, is the plan of doing away with their brands, especially in the case of dentsu creative agencies blending into Mcgarrybowen (MGB).

As per a dentsu insider, “It's a bad business strategy to replace Webchutney or Taproot with a brand like Mcgarrybowen. With a name like that, one doesn’t know if they are a creative network or if they are selling burgers, and a majority of advertising professionals can’t even pronounce it right. The global decision makers are Americans and MGB is an American agency that churns out a lot of money for the headquarters. Somehow Wendy Clark and Tim Andre are convinced about leading with brand Mcgarrybowen even in India, but who is to say that the strategy will work equally well here. Just as we are obsessed with brands, brands are obsessed with agencies that are cool, young, vibrant, and have proved themselves in that country by working in many categories. So why will they associate with Mcgarrybowen when the clients don’t know who they are. And in India, it definitely won’t work as the only creative dentsu brand.”

Remember In 2016, Kartik Iyer’s Happy Creative Services was acquired by dentsu and rebranded as Happy Mcgarrybowen, joining the global Mcgarrybowen network of agencies. But here on, Mcgarrybowen will be one of the only two creative entities of dentsu in India (apart from Isobar Group) by merging five brands ---Dentsu Webchutney, Taproot Dentsu, Dentsu One, Dentsu Impact and Dentsu Mcgarrybowen (Sidharth Rao was elevated as chairman of Mcgarrybowen in India in 2020). Isobar Group will be the other creative brand which will bring together Isobar, WATConsult and Perfect Relations. Media will have Carat India, dentsu X India, iProspect India and Posterscope, and lastly, CXM will have agencies like Merkle B2B, Sokrati and Fractal Ink Design Studio.

Another leader we spoke to explains that the name change to Mcgarrybowen was to happen by the end of next year, but the network suddenly decided to advance that and just last week, there was a meeting where they decided to implement the replacement of Webchutney, Dentsu One, Dentsu Impact etc with Mcgarrybowen everywhere immediately. “In fact, the recent Onam ad for Facebook is an excellent example of that. Facebook is clearly not a direct Mcgarrybowen client yet the credits attribute the work to it,” the source adds.

If one were to compare the five creative agencies which are to come under Mcgarrbowen Group on a scale of popularity, both Taproot and Webchutney are believed to soar higher and have earned the network a fair share of accolades in the past few years at various advertising festivals. Experts say converting them to Mcgarrybowen means that the global heads have no idea about how big these two brands are in India.

Another question that other leaders in dentsu are asking is what happens in the event there are competitive businesses to service for which a network creates multiple agencies in the first place. If the reverse happens, will a Toyota which was aligned to Dentsu India, Honda which was handled by Dentsu One and Suzuki by Dentsu Impact agree to be serviced by the same agency?

In response to our query on handling of competitive businesses after multiple creative agencies are aligned into one, a Dentsu India spokesperson said, “By the end of 2022, our creative service line brands will be integrated into Dentsu Creative’s leadership brands, dentsuMB and Isobar, with bespoke client conflict solutions. We respect and adhere to the controls put in place to manage client conflicts through separation of client’s business knowledge and their execution plans.”

However, the industry is at a loss for words at this decision to do away with these top creative brands.

A well-respected industry leader from another network, on the condition of anonymity, says, “I feel many of the acquisitions have turned sour for Dentsu. Acquisitions are great, but when you have made too many acquisitions at one point of time, and then you try that old strategy of stashing them together, you're actually destroying them. For instance, you destroyed brand Fountainhead, Happy and Taproot. The last one was acquired when dentsu had no creative reputation in India and it signaled a resurrection of dentsu’s creative ambition. It is ridiculous that they have decided to let go of that brand.”

 

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