Around a year and a half ago, Rohit Ohri, the newly appointed executive chairman of Dentsu India, had gone for one of the first pitch presentations for GlaxoSmithkline's pain relief balm Iodex a brand which had been with Ohri's former organisation JWT for decades. It's not everyday that the executive chairman of an agency is present at a pitch, but what was even more unusual was what happened there. The first day when I went to make the presentation, I was astounded because till date I never had to oversell the credentials of the agency I represented. Convincing the client that why this agency needs to be considered was a different experience, said Ohri. Dentsu lost that battle to Leo Burnett which won the creative duties for Iodex.
That incident was an eye-opener for Ohri. It revealed the cracks in the Japanese agency's operations in India and how it had fallen far behind its competitors. Dentsu Inc. is Asia's biggest advertising agency and the world's fifth largest advertising group but its India story hasn't been much to write home about. Most clients that came their way were because of their Japanese ties, and even here it was getting difficult to retain old accounts, forget getting new ones. So in early 2011 when the Tokyo-based group bought out the 26 per cent equity stake held by Mogae Consultants Sandeep Goyal in Dentsus India operations, it indicated a strategic shift in the Japanese agency's plans for India. Ohri was brought in later that year as executive chairman to stem the damage. But soon Ohri realised that being independent was not enough. It had a lot more to do with the way that the agency did business in India.
So taking a cue from the Iodex episode, Ohri went back to the drawing board. I drew up two plans the first one being the long-term plan that spoke about the direction in which the group will move in the next three to five years and the short-term plan which focussed on the way it would progress every month, said Ohri. The premise we worked on was to create a group independent of individuals.
Collaborating for solutions
The first step was to get all the agencies under the Dentsu umbrella to collaborate in working out solutions for their clients. I visualise a future where all Dentsu agencies come together to provide a 360-degree solution to a client, said Ohri. At present, the group has four creative agencies Dentsu Communications, Dentsu Creative Impact, Dentsu Marcom and lastly, newly acquired Taproot India. Interestingly, the group has one media agency Dentsu Media and one digital agency Denstu Digital. This made the job easier when it came to bringing different skills to the table. By doing this, the advertising agency was also preparing for the arrival of a new era the digital era. The era of print advertising is gone now and currently, we are living in the era of television, which, too, will soon fade away, and will make way for the new digital era, said Ohri. Communication will no longer be driven by a 30-second commercial; rather it will be about integrated solutions. It will be about how various media verticals are brought together to ignite conversation between a brand and consumers.
The network has already started implementing this strategy. For instance, three group agencies Dentsu Communications, Dentsu Media and Dentsu Digital have joined forces to create an integrated communication for Orangina, a beverage drink manufactured by Suntory Narang, a joint venture between Japanese conglomerate Suntory and Mumbai-based Narang Group. It makes sense to use television in case of a mass product. But for a product such as Orangina which will be introduced in select geographies, integrated communication plays a larger role, Ohri added. The campaign for the beverage brand is expected to be rolled out soon.
Ohri goes on to say that the idea of specialised agencies was initially introduced by the client. The main aim was to allow agencies to collaborate under one roof, which never happened earlier as agencies would be competing with each other. After so much of segregation, we have finally reached the tipping point, where we will see everyone reaching out for aggregation, he explained.
The bigger benefit from getting all the verticals to collaborate is that the company actually maintains one profit and loss statement, unlike other companies where each vertical has to maintain its own statement. At the end of the day, advertising, too, is a business and like other businesses it is also driven by profit and loss, and if we maintain one statement, it allows us to expand our horizons, he said. In the case of its key account Canon, the agency benefited from this strategy. The creative duty for Canon is managed by Denstu Marcom, while the media mandate is looked after by Dentsu Media and digital duties are handled by Dentsu Digital. At the end of the year, the profit and loss statement for the parent company, i.e., Denstu India, is compiled and closed here in India. Therefore, this gives us a chance to settle any financial dispute that two agencies might have regarding a particular business. It helps us in facilitating a better environment to work, he said.
Ohri's prescription doesn't have a universal appeal. Many agencies feel having separate identities and P&L accounts is better than clubbing everything under one umbrella. The concept of one P&L statement might work for one group but for the other group segregation might be the best solution, said Debraj Tripathy, managing director of MediaCom. As far as clients are concerned, they are benefiting from this segregation as they are getting specialised solutions right on their door step, so I do not think they have much to complain about.
New talent on board
All along, Ohri felt that while the organisation could keep working on the long-term goals, it was important that the agency reflected transformation in its culture immediately. So, the agency worked on its short-term plan which mainly focussed on getting new talents on board and getting the act together in terms of creative work. Ohri hired Soumitra Karnik as national creative director in January 2012 in addition to Harjot Singh Narang who was brought in as branch head, Delhi, Dentsu Marcom apart from Amit Wadhwa, who was hired as senior vice president, Dentsu Creative Impact and Arijit Ray who took over as the chief operating officer of Dentsu India. In the first phase a lot of people came in primarily because of me. It is now that people are coming in because of a balance they see between the organisation and who they work with, said Ohri. When Harjot completed one year, he turned around and said this the best decision that he had ever made. For me that was fantastic.
The second phase of this short-term plan was about upping the ante in terms of providing creative solutions. Hence, campaigns for Honda two-wheelers, Canon, Monster.com, etc were rolled out. The third phase of this plan saw the group finally pocketing new businesses. It won duties for TetraPak, Max India, Ingersoll Rand, Indian Navy, among others.
Even as the different pieces of the Dentsu puzzle were falling into place, one thing struck as odd.
While the Japanese group had a strong history of managing brands ranging from television, refrigerators to automobiles including two-wheelers, the agency had never seriously worked on FMCG brands. That was a chink in Ohri's armour who had spent 22 years working with JWT, an agency noted for its innovative work for FMCG brands.
But, to make an entry into FMCG you need to have strong credentials, said Ohri. So, a few months later in September 2012, the group announced its acquisition of Taproot India, the Agnello Dias and Santsoh Padhi led creative hot shop.
The deal served two purposes, first it accelerated the growth of the company in India and secondly, Taproot came with a client list of strong FMCG brands such as Pepsi, Mountain Dew, Nirma, etc. This filled in the void and soon the Dentsu-Taproot alliance won its first FMCG business NourishCo, the joint venture between Tata Global Beverages and PepsiCo India, and this was followed with the group winning the business for Orangina. According to Ohri, the company is now looking at replicating the same format (Dentsu-Taproot) in other parts of the world, too.
However, not everybody is gung-ho about the way Dentsu is performing. Rajesh Agarwal, managing partner, From Here On Communication, and former president of Dentsu India, feels that in the last one year the group has lost more businesses as compared to winning new ones. It won businesses only after it acquired Taproot, he said. According to Agarwal, Dentsu was not a struggling agency about two years ago but seems to be struggling now both in terms of sustaining existing clients as well acquiring new ones.
Some of the important businesses the group lost includes Hitachi Home and Life Solutions, Acer Computers, Parx (Raymond), among others. But with Ohri taking the lead, the agency won clients such as Max India, Tulsi, Chingles and Pass-Pass from DS Group, Orangina, Tetra Pak, Indo Nissin, to name a few. Moreover, with the acquisition of Taproot, the group now also has Pepsi and Airtel under its banner.
For Pratik Pota, chief executive officer and managing director, NourishCo, it was the agency's energy and hunger for growth, that made him go with the group. With Rohit coming into the picture, Dentsu was able to rebuild its operations as he put together a strong team from scratch. During the pitch process, the group showed its depth of talent and creative power apart from its desire to grow, which made us go with them. I am quite sure that the group will step up its position in the Indian ad circuit, he explained.
Dentsu India is now gearing up for the next big wave of change. As Dentsu completes the buyout of Aegis Group, much will change in the way the group woks in India.
However, Ohri is optimistic that the change will be for the better as Aegis Group is popular for its media skills which will allow the group to combine its talent and learn new skills at the same time.
This is a really big acquisition from Dentsus perspective. For the first time in the history of Dentsu 50% people will work in Japan while the rest 50% will work outside the country. Traditionally it has always been 80-20% ratio, with 80% people working in Japan and only 20% working outside. This takeover is about Dentsus commitment to globalisation. We want to be a force to be reckon with, said Ohri.