August 3, 2011, was just another day at work for Rohit Ohri, the then newly appointed executive chairman of Dentsu India Group. In no mood to take it easy on the third day of his new job, he rang up an old colleague and friend to discuss a crucial business opportunity. That call was to none other than Agnello Dias, one of India?s renowned admen and chief creative officer and co-founder of Taproot India. Cut to August 2012, Dentsu announced that it has picked up 51% stake in Taproot India, the country?s most successful independent agency. While this is Dentsu?s first acquisition in India, the news did not take the industry by surprise. As a matter of fact, in the last one year, almost every big global ad network including WPP, IPG and Omnicom had shown interest in bringing Taproot under their respective umbrellas. Within a short span of time, Ohri has proved his mettle by spearheading the deal and getting Taproot?s promoters to sign on the dotted line.
According to Ohri, the agency fits the bill to be a vital part of Dentsu India?s strategic shift. To begin with, the past few months have seen some impressive campaigns from its agencies for Canon (What makes us click campaign starring actor Anushka Sharma), Honda (the corporate film featuring actor Akshay Kumar post its split with Hero group) and Monster. ?Usually, it takes three or four years to change perceptions in the ad world. Our recent work has accelerated this process and helped in shaking off Dentsu India?s image as a network with Japanese clients. Taproot?s potential is still untapped and after coming into Dentsu?s fold, the agency will certainly scale new heights,? he says.
The big question is: What made the country?s most successful indie give up its bachelorhood within four years of its existence? Says Dias, ?Dentsu has been a solid company all along and its client relationships around the world are really strong. Besides, there was a certain human comfort in our discussions with Team Dentsu during all our interactions.? To a large extent, this much talked about acquisition materialised because of the rapport shared between Ohri and the co-founders (Dias and Santosh Padhi) of Taproot India. In JWT, Ohri and Dias worked together on accounts such as Sony Vaio and Airtel DTH. While Ohri had quit JWT for Dentsu in search of a role that befitted his capabilities, Dias along with Padhi (who was earlier associated with Leo Burnett) decided to take the creative plunge by launching an independent agency.
In an earlier interview with Brandwagon in November last year, Ohri had said, ?Dentsu is willing to rely on the local talent to come up with solutions for clients. Unlike the Western ad networks where expatriates live by the conviction that they can meddle and fix everything, the stakeholders at Dentsu allow the Indian people to shape the agency?s destiny in India.?
Give and take To begin with, a board will be created with Ohri, Dias, Padhi and two more Dentsu India personnel as main members. ?We have picked up a majority and not any controlling stake in Taproot India. It will be just like other agencies (namely, Dentsu Marcom, Dentsu Creative Impact and Dentsu Communications) operating under Dentsu?s umbrella,? says Ohri. So there will be no changes in the management of the agency. Since the deal is not the result of a distress situation, there will be no downsizing of the existing staff. In fact, Taproot will be looking at a marginal expansion very soon. Also, no changes will be made to Taproot?s identity. ?Why to disturb a winning horse and teach him your tricks? My job is to give them the right support and build bigger relationships with the best of clients,? he adds.
Taproot India brings to Dentsu 33 full-time employees and a roster of clients that includes PepsiCo, Airtel, The Times of India, Polycab, Marico, Karbonn Mobiles, Myntra.com, Mumbai Mirror, Nirma, DSP BlackRock Mutual Fund, UTV Bindass, and UTV Stars, among others.
Dentsu will provide resources and infrastructure to Taproot so that the agency can execute campaigns on a larger scale and service clients with higher capabilities. So far, Taproot has taken up work on project basis for some big brands like Airtel and Pepsi on project basis where they cracked the big ideas and allowed the respective agency on record to amplify the campaign across the media.
?Today clients are open to the idea of working with agencies on project basis. We would like Taproot to manage brands by taking on greater responsibility rather than being called out in distress situations as brand doctors who turn around fortunes with great creative output. Their rise has been phenomenal so far and to continue with the same momentum they chose to be associated with Dentsu,? says Ohri.
Entrepreneurship is in the DNA
Dentsu respects the culture of every agency it acquires anywhere across the globe. ?While many global ad networks bear the burden of a set culture, there is no such pressure in Dentsu. We have not yet evolved into what we can be. This is what Taproot identified with most. The industry has reacted very positively to this development and top bosses in Tokyo are happy too,? says Ohri.
Was it the right time for Taproot? ?I don?t think there is ever a perfectly right time to do this, despite what everyone else says. We just felt that all that was put on the table would be mutually beneficial to every single individual at Taproot and if that happens then it is not correct to stop it,? says Dias.
?I will not point a gun at them to get more clients. Three to five years down the line, we would like Taproot India to be known as the ?best quality agency? of the country,? adds Ohri.
New York-based advertising agency McGarryBowen, one of the fastest growing ad agencies in the US, is a perfect example of the freedom that Dentsu allows to the agencies that it acquires. The agency was acquired by Dentsu in 2008 and since then the Japanese ad giant has provided support in terms of its integrated communication capabilities. Last year around June, McGarryBowen won Burger King?s $300 million creative account, one of the biggest pitches in the US at that point in time. McGarryBowen beat biggies such as McCann Erickson and Saatchi & Saatchi in getting the coveted account.
To be or not to be
It may be too early in the day for many independent agencies to say ?I do? to an alliance like this. Curry Nation?s co-founder Priti Nair feels that any independent agency should wait for at least three to four years to get substantial business which results in best possible valuation.
?One may start with the objective of creating a distinct work culture based on personal beliefs, but over a period of time, every independent set-up looks for a larger support system. Many years ago, independent set-ups such as Chaitra Advertising and Trikaya were acquired by Leo Burnett (in the late nineties) and Grey, respectively,? says Nair. It is interesting to note that in case of Trikaya the transition as Leo Burnett was managed entirely by the Indian management. ?The desire of a network to control in order to bring the acquired agency in its fold can be problematic at times,? adds Nair.
KV Sridhar, national creative director, Leo Burnett explains how a new ethos will evolve as independent agencies increasingly taste success.
?With clients willing to work with small agencies on a project basis, networks have no choice but to collaborate and compete. Indies with powerful ideas will sustain and Taproot?s acquisition is just the beginning of a larger trend. Taproot has the backing of two creative powerhouses of advertising, Aggie and Paddy, who have all the know-how and international exposure already. For Dentsu, it is a great opportunity to expand its footprint in India with one more brand,? he says. As far as Dentsu India is concerned, the acquisition spree has just begun.