Dentsu acquires digital firm Sokrati for Rs 800 cr

Dentsu will also introduce its global data, search marketing firm, Merkle, as Merkle Sokrati

Advertising major Dentsu Aegis Network has acquired Bengaluru-and-Pune-based digital agency Sokrati Technologies, wrapping up its 13th acquisition in South Asia in two years. The deal size of the current transaction — estimated at Rs 800 crore — is the largest for Dentsu in the digital space in India, according to persons in the know.

Dentsu will also introduce its global data, search and customer relationship marketing firm, Merkle, with this acquisition in India, branding the entity as Merkle Sokrati.

Sokrati is among the leading players in search and performance marketing, an emerging area in digital advertising in the country. Search and performance-based marketing takes into account the search behaviour of individuals on the web and places ads accordingly.

The last big deal for Dentsu in the digital space was when it acquired SVG Media, a digital media network company, in April this year for Rs 650 crore. 
 

While Google is a big player in the space by virtue of controlling a popular search engine, advertisers require expertise from specialist agencies to place ads effectively on platforms such as Google.

"Along with iProspect, our existing search and performance marketing agency, we now have Sokrati, which will give us a significant edge in the marketplace," Ashish Bhasin, chairman and chief executive officer (CEO), South Asia, Dentsu Aegis Network, said.

Some of the other players in search and performance marketing in India include Interactive Avenues from IPG Mediabrands, and Performics.Resultrix and Performics.Convonix under Publicis Media.

At a broader level, the market for search and performance marketing in India is pegged at Rs 3,000 crore out of the estimated Rs 9,000-crore digital advertising pie. This market is expected to touch Rs 5,000 crore in the next few years.

Dentsu’s acquisition also acquires significance against the backdrop of falling data and mobile prices in India, which are pushing consumers to perform key tasks such as searching, chatting, and emailing on their hand-held devices. 

"People need information and when you have a young population like India does, the tendency to search on the web will only grow," Harish Bijoor, CEO, Harish Bijoor Consults, said.

According to mobile industry body the Indian Cellular Association, the total size of the Indian mobile phone market was estimated to be around 280 million units in 2016 and is expected to grow to 320 million by 2018. Of this, 120-130 million will be smartphone users. With Reliance Jio launching affordable JioPhones, a large number of feature phone users would become part of the data revolution in India. This would also change the dynamics of search and performance marketing, said experts.

What it means for Dentsu

• Dentsu has made its biggest digital acquisition in India with Sokrati 
• This is Dentsu’s 13th acquisition in South Asia in two years
• Bengaluru-and-Pune-based Sokrati is a leading player in search and performance marketing, an emerging area in digital advertising 
• The acquisition will pave the way for the entry of Dentsu’s global entity Merkle in India
• The market for search and performance marketing in India is expected to touch Rs 5,000 crore in the next few years
• The last big deal for Dentsu in the digital space was when it acquired SVG Media in April for Rs 650 crore