Preeti Vyas, founder and chairperson, VGC, said "The time has come when ideas need to embrace scale. We want to bring scale to the agency as I see the growing importance of simply being big in the industry today. To enable this, we would be open to partnering with other agencies or even becoming a part of a larger network."
This move by VGC underpins the advertising industry's need for consolidation with larger networks getting agencies under their umbrella. Some of the recent significant acquisitions in the advertising industry in India include that of Interpublic Group increasing its stake in Lintas to 100 per cent last year and acquisition of 51 per cent stake in media buying agency MediaCom by Sam Balsara's Madison.
At present, most of country's top 10 agencies are a part of either one of the larger networks such as the WPP Group, Inter Public Group or IPG and Publicis Groupe. WPP owns a part of Ogilvy & Mather, JWT and Rediffusion DYR, IPG controls Lintas, McCann Erickson and FCB Ulka. Publicis Groupe's agencies include Leo Burnett, Saatchi & Saatchi and Ambience Publicis.
The larger networks have stepped up their focus on the Indian advertising industry. India is one of the fastest growing market in the world and is expected to contribute significantly to their revenues. The networks hence are trying to increase their stake in the holding companies or acquiring newer agencies in the process.
VGC is seeking partners to expand its operations in the digital medium and retail engagement. When partnering with a larger network or agency, Vyas wants to make sure it is with an agency that gives importance to creative and strategic design. The subsequent partnership must enable the growth of the acquiring agency as well as that of VGC, she said.
When it began operations in 1997, its main agenda was to develop its own operations and not to sell out. Of the recent negotiations had by VGC with potential partners, Vyas did not find the requisite strategic synergies for her agency. "There were either people who wanted to acquire VGC to bring scale to their own operations or there simply wasn't a good strategic fit" Vysas said. Vyas Giannetti has credited with created the new corporate identity for Aditya Birla group.
