Three hundred people at Dentsu India?s head office in Gurgaon have one mandate? to develop innovative products and services in the new media space. And their work is what the management team believes will help morph the six-year-old Indian operations of Japanese advertising and media agency Dentsu Inc into the biggest integrated communications agency in India.
Just to have a sense of how serious the company is about its digital and mobile businesses, sample this: Of the total number of employees across various companies that comprise Dentsu India, more than 40% are a part of Dentsu Digital ecosystem. The company is one of the largest owners of intellectual property in the field of mobile comics or momics. The agency, in addition, has set up portals for greetings, gaming and animation. It has 40 mobile games on offer right now and is soon going to launch a social networking site on mobile.
Its online media trading portal, http://www.lastminuteinventory.com, launched in September last year, is doing Rs 10-15 crore worth of transactions every month. Not just that, the company is betting big on sports marketing, an area where the parent company has been active for long and is a leading player globally.
New media space
Whether it is online or mobile, Dentsu India is building content and solutions to leverage the opportunity that exists in the digital media space. Creating content is not what advertising agencies typically engage in. In fact, traditionally, the focus of these agencies has been to create compelling ads for the various media. With the growth in digital media in the last decade, the media landscape has changed enormously, and more so in the west.
While they face a slowdown in the traditional media spends, on the digital turf they compete with pure play digital media companies. That explains the move by media agencies worldwide acquiring online media companies. To maximize their gains in the digital world, they have started to don the role of content creators. They not only earn direct revenues but also sell this as a marketing opportunity to their clients.
That is what Dentsu India group chairman Sandeep Goyal has embarked upon. A futuristic move, considering the share of digital media spends in overall media is still small in comparison to traditional heavyweights like TV and print. Goyal?s Mogae Digital is the digital affiliate of Dentsu India. In February 2009, the Astro Group of Malaysia picked up a 50% stake in Mogae Digital. Though Dentsu India does not hold any equity stake in it, this and other affiliates companies will support the agency in its ability to offer attractive solutions to the marketing needs of its clients in the world of new media.
?Both internet and mobile will grow. But our belief is that mobile will grow faster, have greater stickiness and higher monetization,? says Goyal. Though the revenue from this stream is small as of now, he expects profits to grow exponentially in the years to come.
According to the media and entertainment outlook report 2009 by consultancy firm PricewaterhouseCoopers, internet advertising stood at Rs 500 crore in 2008 with a small 2.3% share in the total advertising pie. It is predicted to grow to Rs 2000 crore by 2013 and will more than double its share in the total advertising spend across all media. Mobile gaming, which was a Rs 250 crore sector in 2008, will grow to Rs 1,210 crore by 2013.
To tap this opportunity, the company has developed a range of products. Mogae Digital, will soon be launching mobile comics with leading telecom players such as Idea and Aircel in the country. In this area, the company gains confidence from Dentsu Inc?s expertise in creating Manga (Japanese for animation) content for Japan and other Asian markets.
?We are pioneering mobile greeting cards, mobile novels, high-quality animations, branded humour and more. No other agency in the country is in the business of owning IP rights,? says Goyal.
Dentsu India will increase the number of mobile games to 400 by the end of 2010. ?This will make us one of the largest owners of mobile games in India and Dentsu Digital is uniquely placed to take adver-gaming to its next level in India,? he adds.
The company plans to launch Screenagerz, a social networking platform on the mobile very soon.
All the digital and mobile products have been created by what Dentsu India calls its digital ecosystem. This system includes Clickstreamers, Diginatives, Mogae Digital and Dentsu Media. In some of them, Dentsu India does not own an equity stake per se.
Among the products on the web, the company has a gaming site, Indian Fantasy League, which offers cricket, football, golf and tennis games. It has added a stock market game to the portfolio recently. Mobile service provider Airtel was the title sponsor till last year, when the sponsorship was taken over by Aircel. Dentsu Digital ecosystem also created a site, http://www.gardenoflove.com last year. The site is now fully WAP enabled and the company says there are a host of clients who are interested in the branding opportunity it offers.
The journey into the new media space began almost two years back. Two developments took place almost around the same time. First was a partnership with online marketing agency, Ignitee Digital Solutions, then known as Connecturf, which led to the birth of an interactive agency called Clickstreamers in October 2007. Dentsu India had a 51% stake in this joint venture, while the remainder was with Ignitee.
Almost simultaneously, Last Minute Media (LMM), promoted by Dentsu India and Mogae Consultants was set up. This company had equity participation from Bennett Coleman, the publisher of The Times of India and The Economic Times, broadcasters Star TV Network and Zee TV Network. They came up with a beta version of a portal, www. lastminuteinventory.com or LMI, which offered trading in unsold inventory of media companies. This was a first and it was viewed with skepticism by quite a few people in the industry.
?Both sellers as well as buyers of media had many misgivings and reservations initially that needed to be addressed,? says Goyal, who is also the chairman of LLM. The concept created quite a flutter then, but it took almost two years for the portal to be commercially active.
?Over the last two years while the product was on beta test, we have worked on adding new features, making the entire process much more robust, added enhanced security features to take care of sensitiveness of the transaction data. The portal also needed to evangelize its basic concept to its constituents,? adds Goyal.
Launching the portal in a period of slowdown helped, as companies were more receptive to new ideas.
Goyal adds that the website has now established itself, with every media owner worth his name listing his inventory He hopes to do a business of Rs 200-250 crore on this portal in 2010.
All the digital and mobile products have been created by what Dentsu India calls its digital ecosystem. This system includes Clickstreamers, Diginatives, Mogae Digital and Dentsu Media. In some of them, Dentsu India does not own an equity stake per se.
A continuous evolution
Dentsu India’s journey had taken off in 2003 with the launch of Dentsu Communications, Bangalore. Goyal holds a 26% stake in it through Mogae Consultants promoted by him and his wife, Tanya Goyal, while 74% of the equity belongs to Dentsu Inc., Japan.
The second full service agency, Dentsu Marcom, was started two months later. Within a year, it won the creative mandate for Mauritius based telecom company, Emtel, which was launching 3G operations in the island country. It was Dentsu India’s first MNC account.
In 2005, Dentsu India made its debut outside the country, when it opened Dentsu Marcom Middle East FZ LLC, where Dentsu Inc. had a 51% stake and Mogae Consultants held 49% stake. Till date, it is the only Dentsu subsidiary in the entire Middle East. Between 2003 and 2006, the agencies kept adding new cities to its network.
The year 2007 was crucial as Dentsu India launched its group-wide media buying agency, Dentsu Media. Dentsu Media had two divisions, Media Palette and Media Cubic. While Palette served the clients of Dentsu Marcom, Cubic took care of those of Dentsu Communica-tions. That year, Dentsu also launched design and retail bouquet, Iki.
Last year Dentsu introduced its global tools Contact Point Management and Valcon in India. This was followed by the launch of Citizen Dentsu, which was its social communications division. Dentsu India then formed a JV with Serco BPO and launched ClozR Communications, its CRM and loyalty practice arm.
Future goals
Goyal says that the Dentsu companies in India today do a combined business of around Rs 1,000 crore. Whether it is the tools, management practices or initiatives in the new media space, the involvement of the parent company is clearly visible.
In fact, Dentsu Inc. has been highly aggressive in the digital space. It recently put all its digital business in a 100% subsidiary of the company, Dentsu Digital Holdings. It has been looking at companies in the digital space across the world for acquisition.
On the question of whether ideas and products flow from India to Japan as well, Goyal responds, ?We are still too tiny and too young for the parent to learn much from us!?
But this young agency has its goals set. ?We will be India’s largest integrated communications agency in five years. Advertising will remain the core of the business but media, digital, sports and content will be the surround pillars of our growth,? says Goyal.