Bates Worldwide To Pick Up Stake In Clarion

Bates Worldwide has signed a letter of intent with the Rs 70-crore Calcutta-based Clarion Advertising Services to pick up an equity stake in the Indian agency. The link-up ends months of speculation on the last pan-Indian independent advertising agency's future.

For the last four years, Bates had an affiliation with the JWT agency, Contract. Now, with this new realignment, Bates will sever its relationship with Contract.

This is likely to result in the British tobacco major moving its brands to Clarion. BAT is expected to launch its international brand, 555 State Express, and Benson and Hedges through its joint venture with ITC. The current chief executive officer of the agency, Dr Pradeep Kakkar, who will be moving up to the position of executive director under the new set-up, told Business Standard in Calcutta: "We are optimistic as far as BAT is concerned."

Clarion already handles ITC's Goldflake brand and would also be looking forward to operate on the BAT scene, he added.

"By being part of a major international network, Clarion will receive the stimulus and support required to achieve global standards," Kakkar said.

Over the years, Clarion has been plagued by management and union problems which resulted in instability and frequent changes at the top-brass level.

In June 1992, Ram Ray, who headed Response, another Calcutta-based advertising agency, was invited to lead the beleaguered Clarion.

But now Ram Ray will hand over charge to Kiran Khalap who is currently the agency's executive vice president and creative director.

Khalap told Business Standard: "What swung the decision to tie-up with us was that it was the last of the truly pan-Indian independent agencies with fully-staffed offices across the country. The tie-up comes as a shot in the arm for Clarion as it can now use Bates' experience to widen its specialist services like sales promotion, design and interactive media. Besides, it will allow greater global exposure for local talent."

Ram Ray has decided that this is an appropriate time to handle over the mantle and attend to other interests. Says Ray, "I joined Clarion at what was the perhaps its most difficult hour. We've negotiated some really turbulent waters and are now entering the global arena with quality and stability. The Bates affiliation is good testimony and a reassuring milestone."

Clarion is aiming at a billing of Rs 100 crore during the current financial year as a result of its ongoing business consolidation process.

The consolidation process is reflected in the composition of the senior mnagement team which has remained unchanged for five years, which is an unusual thing in the advertising industry.

The Calcutta-headquartered agency has clients like Hindustan Lever, ITC, Carrier, BPL, Indian Airlines, Siemens, TCS and Berger Paints among others. Bates Worldwide boasts of a client profile which includes, Avis, BAT, Visa, Hong Kong Bank, Warner Lambert, Mattel, Nokia and Amnesty International.

Bates is one of the largest advertising agency networks in the world, with 185 offices in 75 countries and annual billings of approximately $6.3 billion.

Bates claims to be the second largest agency in Asia with annual billings of approximately $1.2 billion. Its founder, Ted Bates coined the ubiquitous marketing term USP or unique selling proposition.

The link-up ends months of speculation over the last truly pan-Indian advertising agency's future