The hare and the tortoise

The R K Swamy Hansa group is the last man standing when almost all its home-grown peers have thrown in the towel

About two weeks ago, when the news filtered in of a split in the 37-year-old relationship between R K Swamy, an old advertising warhorse from Chennai, and BBDO, one of the most well-regarded creative agencies and part of the Omnicom group in the US, it didn’t make the headlines. There was no rancour or hushed conspiratorial whispers from either side. Its clients and employees didn’t seem overly bothered either.

For those in the know, that wasn’t exactly surprising. The R K Swamy group has always preferred to keep things low-key. It seldom jousts for creative awards, preferring to focus on its hardworking, straightforward advertising for clients, predominantly from the government and public sector, like the Life Insurance Corporation of India and State Bank of India. Some would even call their work staid. Its clients, though, don’t seem to mind. For instance, R K Swamy has managed Hawkins since 1985, cutting across two generations of owners.

In an age when clients prefer to swap ad agencies at the drop of a hat, these kinds of relationships would seem almost anachronistic.

Over the years, as second-generation owners, Srinivasan and Shekar Swamy have played key roles in setting industry standards across the advertising and media world, but seldom attract attention to themselves. Professional managers who’ve worked with the brothers say they’ve stuck to old-fashioned values of integrity and given them space to operate. That’s in sharp contrast with the more flamboyant leaders in the ad industry, some of whom have put themselves ahead of the institution.

Now, here’s why their decision to part ways with BBDO is interesting. Most home-grown Indian advertising and communication groups have thrown in the towel and sold out to large international networks like WPP, Publicis, Dentsu and Omnicom, with the exception of the R K Swamy Hansa group and perhaps, Madison Worldwide, founded by the evergreen Sam Balsara. The original founders at Ulka, Trikaya, Mudra, Rediff and Chaitra have one by one exited from the scene.

So what are the learnings from the R K Swamy journey?

Local vision vs serving global clients: Most international networks bank heavily on big spending global clients. It was tempting for a local partner to get swayed by that opportunity and lose sight of the local market opportunity. As the local partner, R K Swamy retained its faith in the Indian market opportunity all along. And they believed that there would be enough local clients who would seek their services.

Take charge: To ensure that it didn’t lose sight of its vision, the brothers ensured that they retained management control at all times, with a casting vote at the board and the right to select the CEO. It also meant that they had to take responsibility for results. And deal with downturns, like the one in 2008 following the global financial crisis and more recently, through the pandemic.

R K Swamy’s relationship with BBDO started off in 1985 and five years later translated into a 50:50 equity partnership. In 2008, when BBDO decided to set up its own subsidiary, BBDO India, to focus more sharply on its global clients, R K Swamy took a minority stake in that venture.

Look beyond advertising: Its relationship with BBDO was primarily for content and creative services. BBDO did not want to expand its ambit, leaving that task to other companies in the Omnicom group.

The R K Swamy Hansa group, on the other hand, aspired to expand into a larger gamut of services with the aim of making marketing more efficient and effective.

To do that, apart from R K Swamy BBDO, it incubated Hansa Research (for insights and research) and Cequity (data analytics and martech solutions). They picked entrepreneurial leaders to lead the charge and offered them stakes.

Each of these two ventures have now scaled reasonably well, with Hansa Research rated as one of the top independent consumer insights and research firms in the country. The share of advertising is now down to 35 per cent of the group’s revenues.

Shekar Swamy believed in the larger marketing services opportunity. And to buttress that, he set up a base in Chicago to serve the research and analytics needs of banking, financial services and insurance and tech firms, and acquired Portland-based GCR (formerly called Gartner Custom Research) in 2007. However, soon after, the global financial crisis forced cutbacks and the team had to be downsized.

Bringing it all together: After surviving the pandemic, R K Swamy Hansa is now hoping to make up for lost time. Once it acquires BBDO’s stake in R K Swamy BBDO and sells its own stake in BBDO India, it hopes to bring its three subsidiaries together (Hansa Cequity and Hansa Research) and plan for public listing, if all goes well, in the next one year. The listing will provide additional capital for growth. And an opportunity to tap into the synergies that exist, without cutting into the independence of each unit. A tentative start has also been made to expand its network to Singapore and Dubai, apart from a plan to rebuild its US business.

Both Srinivasan and Shekar, now in their mid-60s, don’t look anywhere close to giving up. In a world of flashy admen, they’ve managed to build a $100-million institution in their own quiet way. Something that their father would certainly be proud of.

The writer is co-founder at Founding Fuel