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| Account conflicts give rise to new media arms | |
| Seema Sindhu / New Delhi November 05, 2009, 0:51 IST | |
Rising conflict in media accounts appears to have compelled prominent media planning and buying agencies like Lintas, Starcom and Madison to launch new arms, even as agencies insist the move is geared towards providing specialised solutions to global companies.
Consider this. Just a month earlier, the Lintas Group launched Karishma Initiative (KI), though it already had a media services agency, the Lintas Media Group. Starcom, too, launched a second agency, MediaVest Worldwide India, this April. And Madison launched Platinum Media in January 2009.
Lynn de Souza, Chairman, Lintas Media Group, reasons: “We need to provide a range of services that conform to a global template for key multinational clients planning to work with us in India and KI is the provider for that.”
Ravi Kiran, CEO-South Asia and Emerging Market Leader-Specialist Solutions, Starcom MediaVest Group, attributes this to “part of a strategic, global rollout of the MediaVest brand”. “One of the reasons the MediaVest brand is being rolled out globally is to give global MediaVest clients the same powerful MediaVest product they are used to.” Besides conventional media, MediaVest will also sharpen its focus on the digital medium.
Industry analysts have a different take. They say companies do not like to give their accounts to agencies which handle their competitor’s account, fearing strategy leaks and marketing conflicts. A second agency, with a separate management and office, provides comfort that their strategies will remain confidential.
“This is basically to handle conflict businesses. For instance, telecom and insurance are the two hottest spaces in advertising today. Both the sectors are getting congested, with entry of new players. Moreover, these sectors are among the top spenders,” says Farokh Balsar, National Sector Leader, Media and Entertainment, Ernst & Young.
Pratap Bose, COO of Mudra Group, says the move to set up a new arm is to “increase business volume and revenue as the market expands”.
He says the media buying space is set to grow by 8-9 per cent this year.
Mudra, part of the Reliance ADA Group, had launched Mudra Connext and Mudra Radar in April 2008 to handle conflict businesses. Radar serves Reliance ADAG companies and Connext serves other clients. The media buying industry in India is a Rs 27,000 crore one.
Globally, the trend is well established, with almost all big media agencies having multiple agencies. For instance, GroupM has Maxus, MediaCom, Mediaedge:cia and MindShare. Publicis has ZenithOptimedia, Optimedia, Starcom, MediaVest, Equinox. FCB has Lodestar and Universal McCann. It helps media agencies to sign multiple clients from the same sector, despite the “competition” hassle.
Sam Balsara, Chairman and Managing Director, Madison World, concurs: “It’s a combination of all reasons (growing business, conflict accounts and recession receding). But primarly, it is to fuel growth by getting competing clients within the system.” Madison launched Platinum Media in January 2009, the second after Madison Media.
However, N P Sathyamurthy, President and COO, Lintas Media Group, disagrees that conflict business could be the rationale behind the launch of KI. "Conflict business management is not the reason for launching KI, differentiated offering is," he asserts.
Nevertheless, the move pays dividends, say analysts. KI, for instance, is targeting a Rs 1,000-crore billing in its first year, half of which has been met, according to the agency. KI has begun operations with a key telecom win, the UAE-headquartered Etisalat DB Telecom company. Some of the other businesses already being handled by KI include Samsonite Asia Pacific (India), Revlon, Austrian Airways, Qatar Airways, Computer Associates, Sharp Electronics, Four Seasons and Bombay Dyeing.
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