Dentsu India Group, the Japanese owned advertising and communications agency, has been in the news for action of all kinds. Two years ago, it was because Rohit Ohri quit JWT after more than two decades to take over as the Dentsu boss in India. Then, last August, it took a majority in India’s hottest new creative agency, Taproot. And last week it was because it had picked up an 80 per cent share in digital agency Webchutney.
afaqs! speaks to Rohit Ohri, executive chairman, Dentsu India Group, about his priorities and what drives him.
Q. About the Webchutney acquisition: where does digital stand in Dentsu’s scheme of things?
We have always talked of Dentsu as an integrated communications solution company. Part of this necessitated that we have a very strong digital capability.
I have been looking at various partners who could help us do this scale-up. Webchutney stood out on the basis of the quality of the work, the cultural fit and the two leaders of the company (Sidharth Rao and Sudesh Samaria).
Digital is a core capability that we need to have, and so I thought, let’s go with the best.
Q. What will you do with Blue Slate Media (Webchutney’s subsidiary content company)? Sell it off?
We are trying to understand what is core and non-core. We will take a call in about four-five months.
Q. When Dentsu bought out Sandeep Goyal’s stake in early 2011, it lost the bulk of the top management. How will you ensure that doesn’t happen?
When you buy a 100 per cent stake, as in the Sandeep Goyal case, it’s clear that you are parting ways with the person whose stake you are acquiring.
The most important thing is that the key people in Taproot and Webchutney, who created those companies, are still holding significant part of the stake, which means they are working to grow that to the next level. It is also part of our contract that they have to be with the organisation for a specific period.
Q. To change subjects, why do you have four agencies carrying the Dentsu name? It’s confusing.
We have done this because these agencies handle competitive businesses. In categories like automotive or electronics, there is a significant conflict of interest. To manage that we have created separate agencies so that client confidentiality is maintained. That, for us, is the most important thing.
They are in separate locations, with separate management, finance, backend and frontend. At no point do these agencies meet in terms of sharing of resources or infrastructure. It’s not the question of Chinese walls; these are concrete walls and there is no way information can travel from one agency to another.
Q. Dentsu continues to be identified as a Japanese ad agency with Japanese clients. How successful have you been in changing that?
In 2012, as a group, 60 per cent of our business came from Japanese clients. In 2013, 60 per cent of our business will come from non-Japanese clients and 40 per cent from Japanese clients. That is a very significant shift in a single year.
Some part of this shift has been organic and some, inorganic. The inorganic bit is the acquisition of Taproot and Webchutney which bring in a huge base of almost 100 non-Japanese clients. Even the Dentsu agencies have picked up a significant number of local or global clients such as the Max Group, TVS, NourishCo and Akzo Nobel.
Having said that, it is immaterial whether the client is Japanese or Indian. We want to be known as the best agency for integrated communications in India, not the best Japanese agency for integrated communications.
Q. You were with JWT for many years. Looking back how do you compare your experience in the two organisations?
JWT is an absolutely fantastic agency. It’s an agency I have grown up in as an advertising professional. A lot of what I am today has been shaped by JWT. The difference between JWT and Dentsu is, obviously, the position I am in.
In JWT, even though I was heading their largest branch, I was reporting to the India head and who in turn was reporting to the regional head and so on. The hierarchy was very thick and, even at that level, there were many people.
In Dentsu, the fact that I head the whole group and being the chairman of the holding company, gives me a whole different scale, perspective and width of operation that I didn’t have earlier.
The acquisition of Taproot and Webchutney were the two things that I had very high on my list. And, thanks to Aegis, we also have access to a whole host of other skills and capabilities that we didn’t have earlier. In the next two or three years, if Dentsu gets it right, it could be big contender to being a mega player in India.
Q. When you look at Dentsu’s future in India, what worries you?
One of the big challenges we have is that, unlike in the western world, we do not have many aligned clients. A lot of our clients are local or have been acquired in a specific region or a specific country. So, we don’t have the permanence that a global relationship gives to an agency like JWT’s with a Nestle or a Ford. That gives a lot of security to an agency.
But it’s also a great opportunity, as it keeps our fighter instinct intact. We work hard to please our clients since they are with us in India because they have chosen to be. It gives Dentsu the cutting edge.
The next aspect of it is, what is the future of communication going to be and how we are going to talk to the next generation of consumers, who are younger and have a whole different paradigm of engagement with brands. For us, it is a very important part to get right.
However, the best thing is that Dentsu is the first agency network to have been created in the post digital era. All the other mega networks were fully formed before the digital era, which gives us the last mover advantage. As a result, we know what to build and what not to.
In many parts of the world, we will be building the network around the strengths of the Aegis network (which Dentsu bought in mid-2012). There are many brands within the Dentsu Group now, but each of them has specific skill and capability. We are getting these brands to work together as a network and collaborate with each other in the best interest of the client. And, that’s what will make Dentsu the network of future.
(Published in afaqs! on May 31, 2013)