Dentsu grows its India push with controlling hold on Taproot

Says strategy is to provide back-end support by making available network resources to Taproot

Dentsu’s acquisition of 51 per cent stake in creative agency Taproot has put the spotlight on Dentsu, the fifth-largest advertising agency in the world, after WPP, Omnicom, Publicis and IPG. While the top four have been active in India for some time, scouting for acquisition opportunities, it is Dentsu that is increasingly grabbing headlines.

After Omnicom’s acquisition of majority stake in Anil-Ambani-owned Mudra Communications last year, Dentsu’s acquisition of stake in Taproot is the next big deal, say industry experts. Dentsu declined to specify the financial terms of the transaction.

Group officials say the Taproot acquisition may well be followed by other such deals. Rohit Ohri, executive chairman, Dentsu India Group, a wholly-owned subsidiary of Denstu Inc, said the agency was keen on filling up skill-set gaps in its portfolio.

DENTSU’S INDIA JOURNEY

• 2003: Dentsu Inc sets shop in India with Dentsu Communications and Dentsu Marcom, a 74:26 joint venture with Sandeep Goyal’s Mogae Consultants 
• 2005: Dentsu Creative Impact launched 
• Early 2011: Goyal sells his 26% stake in all Dentsu ventures 
• Mid 2011: Rohit Ohri appointed executive chairman of Dentsu India Group. Following his appointment, Dentsu aggressively recruits people. It currently has 300 people 
• August 2012: Dentsu acquires 51% in Taproot

“The next frontier for us would be strengthening our presence in the activation space. This is basically what falls in the out-of-home or experiential marketing domain. Additionally, we are also looking to strengthen our presence in digital, public relations and media segments,” he added.

Dentsu India Group has three creative agencies — Dentsu Communications, Dentsu Marcom and Dentsu Creative Impact. It also has media agency Dentsu Media and a digital agency, Dentsu Digital, under its fold. Though Taproot is part of the network now, the agency will retain both its identity and creative freedom. “The creative duo of Agnello (Dias) and Santosh (Padhi) are a success,” said Ohri, adding, “We have no plans to alter this winning combination.”

Initially, the strategy is to provide back-end support by making available network resources to Taproot. While Dias and Padhi would continue to work on their existing set of clients, including Airtel and PepsiCo India, they would also be tapped for providing inputs on Dentsu businesses.

“We will basically partner them to move to the next level of growth,” says Santosh Padhi, co-founder and chief creative officer, Taproot India. “There will be an exchange of ideas and learning between us,” he says.

Both Padhi and Ohri declined to indicate whether there would be more stake-buys. “It depends on whether Agnello and I want to dilute stake. For now, we don’t,” Padhi said.

Dentsu is also gearing up for a possible partnership on the media front. This follows its global acquisition of UK-headquartered Aegis Group. Aegis, the holding company for media agencies such as Carat, Vizeum, Isobar and Posterscope, is a leading player in the media buying and marketing space, with operations across the world. Last month, Dentsu had announced it was acquiring Aegis for $5 billion.

Ohri said, “The acquisition will be completed by the end of this year. A clearer picture will emerge then. But we are exploring the possibility of how Dentsu and Aegis can work together.” In India, Aegis is headed by chairman of India operations and media veteran Ashish Bhasin, also Aegis Group’s chief executive for Southeast Asia.