INDIA BUSINESS WORLD - APRIL 1st - APRIL 15th - 2008
P&G INDIA AWARDS COMMUNICATION PLANNING TO MADISON-MEDIACOM COMBINE, SAM BALSARA ACQUIRES 51% IN WPP ARM MEDIACOM
It is the biggest move in the Indian media agency space. P&G India awarded its communication planning and buying AOR to the Madison-Mediacom combine. There’s more, Sam Balsara, the principle shareholder of the Madison Media group, has acquired 51% in the WPP-owned media agency Mediacom.
The deal between Madison and Mediacom has gone on to become a landmark in the media agency space in India. Sam Balsara will be the chairman of the company and Divya Gururaj will continue in her role as managing director of MediaCom India. The company will report to Mr Balsara and GroupM will not be involved in managing the company.
Group M, WPP’s media arm, which Mediacom was a part of, will now disassociate itself from WPP and will function as an independent entity. Mediacom will retain all its current AOR’s such as Dell and Wrigleys apart from handling the P&G account. “In November 2007, as part of standard corporate requirement to ensure that the best agency resources are working on the business, P&G India undertook a review of its media agencies. We are happy to share that based on the results of the evaluation, P&G India has decided to award its communication planning and buying AOR to the Madison Mediacom Combine effective July 1, 2008,” a P&G official release said. The other contenders for the P&G India pitch was Starcom Media Vest and Carat.
Mr Balsara said: “For some time, we have been looking to establish a strong second agency. When the Mediacom opportunity came about, we decided to move forward with great speed.” Talking about how this helps Madison’s position, Mr Balsara said, “We believed that this arrangement would offer our client P&G a more convenient solution where they would deal with only one media partner in India and across the world. P&G had to deal with multiple agencies and we thought this would be an elegant solution for them. For me and Madison, it makes eminent sense as it makes us bigger better and stronger with a second agency.”
Insiders say that Mediacom will now be used as Madison’s second agency and any conflicting business will be transferred to Mediacom. It will further help Madison’s clout in terms of getting the best rates for its clients. Mediacom, with the P&G account, will now become Rs 450-500-crore agency in terms of billing. The arrangement now also takes care of the Unilever business that Group M’s flagship agency Mindshare handles in India.
Mr Balsara will have management control of the agency. P&G India has been one of the first accounts of Madison. When P&G was looking at aligning all its business with club agencies, the move for both Mr Balsara and Martin Sorell, WPP, CEO seemed fine. Independently, Madison could have ended up losing the P&G business and Mediacom on its own strength did not have the wherewithal to handle the P&G account. Hence, to ensure that Starcom, which was a strong contender and handles the P&G business in Europe, does not get the local account here, Madison-Mediacom decided to go ahead with the arrangement about a month ago. P&G India, which has shared a long-standing relationship with Madison, will now continue to benefit from the tremendous media buying clout that Madison exercises while ensuring that its global policies are met.
Talking about the future, Mr Balsara added that Mediacom would seek to derive benefits from the global linkages of Mediacom worldwide. “I believe that Mediacom globally is a very strong agency, with tremendous expertise in large number of categories. For some reason, this expertise has not been exploited in India. I hope that I can play a catalytic role in exploiting Medicom’s worldwide global expertise in India,” he added. Ms Gururaj said, “Winning the P&G account was the first step in Mediacom gathering momentum as an agency.”
|
