|
The JV that Dentsu Inc is setting up with the former Zee and before
that Rediffusion DY&R CEO entails Japan's largest advertising agency
holding a 74 per cent stake in the new entity. Dentsu Communications
will have an initial paid-up capital of $1 million (a little under
Rs 46 million). Since Dentsu Inc already holds 20 per cent stake
in Rediffusion-Dentsu Young & Rubicam (DY&R), it had to obtain a
no objection certificate (NoC) from the latter for floating a separate
company in the country.
Informed sources have told indiantelevision.com that the Toyota-Kirloskar
account, which is reportedly worth around Rs 300 million and expected
to grow as Toyota focuses on the A segment, will move to Dentsu
as of 1 October. Reports say the account shift could spell curtains
for Orchard Advertising, through which Dentsu was servicing the
Toyota account.
Goyal has already set up an office in Bangalore with Ruchira Raina
in charge, the sources confirmed. When contacted, Goyal would provide
no details as to the company's plans, saying it was too early to
announce anything as he was still in the process of setting up the
agency.
Getting the agency fully functional will reportedly take another
three months. Information available with indiantelevision.com indicates
that Starcom India's Bangalore office, which manages Toyota's media
buying and planning, has already been informed that from 1 January
2004, the account would shift to Dentsu.
The new JV will initially target almost all Japanese brands present
in India including Toyota, Honda, Suzuki, Mitsubishi, Sony, Panasonic,
Sharp, Toshiba, Canon, Epson, Fujifilm, Kawasaki, Yamaha and Daikin
- all global clients of Dentsu. The total worth of all the accounts
in Dentsu's immediate sphere of attack are worth an estimated Rs
1300 million, according to sources. Sony, Fuji and Hitachi are the
other brands that are currently with Starcom.
It will be interesting to see what happens to accounts such as
Canon, currently with Rediff DY&R. Even if they do not shift out
in the immediate term, advertising circles believe it is only a
matter of time before a parting of ways comes about. This is because
internationally, the DY&R relationship weakened post WPP acquisition
of Y&R, which pushed Dentsu to strengthen its investments in the
Publicis Groupe. Dentsu is the single largest shareholders in Publicis,
as also in Leo Burnett. By virtue of its investments in these agencies,
Dentsu also owns significant stake indirectly in Starcom.
The benchmark that Dentsu Communications will have to aim for will
likely be China. Dentsu's Chinese billings were a massive a $278
million in 2002, having more than quintupled in just four years.
It is now China's third-largest advertising firm.
"India might not necessarily be the next China, but it's a big
market," Dentsu Inc's executive vice president Fumio Oshima has
been quoted recently in a Reuters report as saying.
|
