MAM
Size matters in changing adland
MUMBAI: In the acquisition storm swirling across the advertising world, there are two strong currents that are pushing from below to force change in adland: the digital might of Google, Microsoft and their likes and the emerging high-growth markets including India.
The compulsion to do buyout deals and outsize competitive agencies is coming from an evil that is economic crisis. Global media agencies are looking for safe harbours away from the slowing advertising markets of the United States and Europe.
Prolonged recession since 2008 is providing the ideal climate for these deals to fertilise. The smaller players have become more open to sell as they seek escape from financial stress and acquisition prices become more affordable.
“We will see more mergers and acquisitions take place. In a downswing, the values become lucrative and the benefits of consolidation become more apparent,” says Publicis South Asia CEO Nakul Chopra.
The BBHs of the world were born in a different era and in a different period of history. Now is the time to build scale, volume, value and efficiencies through size. The scramble is on to consolidate advertising spends among the top five agencies, much like the way the other industries behave.
“How long can the ad industry stay fragmented? It is the era of consolidation at the top,” says former Havas Media CEO and now
BCCL director customer strategy Anita Nayyar.
There is no other way to survive the onslaught of the digital players in a convergent media world. Agencies need to invest in digital expertise, technology and geographies. For tapping say Google, agencies with size will have a distinct advantage.
And who knows where the ambitions of these digital giants will end? Sitting on huge cash piles, Google, Facebook, Apple or Microsoft may find business sense in owning media and entertainment companies as the world moves rapidly towards convergent economies.
And what if they suddenly develop the appetite to gobble up extended areas like the agency business?
That may be too much of an extended logic. It is definitely not the reason behind the current urge of agency owners to grow into bigger giants. Consolidation to tap deeper into clients in a digital era is the one big pull. And in a mightier ad world, growth can come through buyouts that provide complementary strengths.
Japan’s Dentsu, overwhelmingly dependent on its revenues from the home market, has taken one such giant leap by agreeing to buy London-based Aegis Group for a whopping $4.9 billion. This will enable it to fly with greater stamina in Europe, a market it had earlier tried to dig into but failed. The Aegis buyout will place the Tokyo-based agency in the top position in the Asia-Pacific region while it becomes the second largest in western Europe, the fastest growing in North America and a global leader in digital markets.
The Japanese agency couldn‘t have waited longer to spread far and wide. WPP has done a spate of acquisitions across the world, the most recent being independent digital agency AKQA. Publicis Groupe, on the other hand, gobbled up London-based Bartle Bogle Hegarty (BBH) for $848.5 million. The French agency also bought Rosetta, a digital marketing company, last year.
“In this consolidation wave, Dentsu needed to balance their footprint. There was an inherent strategic need,” says Chopra.
Consolidation among the bigger agencies is nowhere near completion. Havas and the Interpublic Group could become the new targets for acquisition as the pecking order of the top five agencies remain unchanged even after combining Dentsu and Aegis. WPP leads the pack, followed by Omnicom, Publicis, IPG and Dentsu.
The acquisition fever has also spread to the Indian shores. The largest takeover activity was made last year when Omnicom snapped up majority stake in Anil Ambani‘s Reliance-owned Mudra Group. The most recent acquisitions this year have been the total buyout of digital agency Indigo Consulting by Publicis’ Leo Burnett and 51 per cent of Hungama Digital by WPP’s JWT.
“In this digital era, there is a need to offer a wider level of specialised services. We acquired Indigo Consulting, one of the largest digital agencies in India,” says Leo Burnett chairman and CEO for Indian subcontinent Arvind Sharma.
The acquisitions across geographies are not going to end. The cross-border deals are, in fact, going to multiply. “The big change sweeping across the world is the power of the digital medium. In this cyclic wave, inorganic expansion is becoming an important route. Agencies want to leapfrog their understanding in the digital arena as consumer behaviour is changing fast. Since digital means global platforms, we are seeing more cross-border deals like Dentsu intending to acquire Aegis,” says ZenithOptimedia CEO Satyajit Sen.
Sharma believes that mergers and acquisitions will last for at least a decade. “The dominance of television is waning and ad spends are moving away to digital. The market is getting more segmented and ad models are becoming complex. Also, TV, tablets and smart phones are merging into each other. Media companies are acquiring specialities as digital is becoming a powerful communication tool. Technology is driving interest and consumer time. These require new perspectives and new skillsets,” he explains.
India with a 1.2 billion demographic has become a very important growth market for the global agencies. Commenting on S&P’s remark about India being the first fallen angel, WPP Group CEO Martin Sorrell told CNBC TV18‘s Anuradha Sengupta in an interview that “If India is a fallen angel, I would like to be a fallen angel.”
The angels are inhabiting Brazil, Russia, India and China. While US is seeing very slow growth and Europe is caught in a debt crisis, the BRIC countries are growing strongly though of late they are tending to reverse their crazy pace.
Sharma believes acquisitions will keep happening in India. If 4G turns out to be a success and the projection of 200 million subscribers over the next five years actually happens, it would throw open a lot of opportunities and challenges for agencies.
“We will see digital and special units and talent being gobbled up. New creative shops will keep coming up and it normally takes seven years of growth for such smaller outfits to be a target for acquisition,” he says.
Agrees Sen, “Acquisitions will be on the rise. Network agencies will have an advantage.”
Will that signal the end of the mushrooming of independent agencies in India? Madison Media Group CEO Gautam Kiyawat does not think so. “Creative shops can be successful without the scale attached to it. I don’t see their death in India. They will continue to exist in numbers,” he says.
The advertising landscape will possibly witness two trends. While mid-sized agencies will be buyout targets, the smaller creative outfits will find space to exist.
Nayyar feels India will not follow the global trend where the top league will be occupied by five agencies who will dominate the market. Being diverse in nature, India will be a 10-15 player market. Agencies with sizeable volumes like Madison already exist. Like China, India is a volume market,” she avers.
Percept Limited joint managing director Shailendra Singh agrees that India will have more players with strong volume business. “India is a totally different market. “We are a totally different market. Percept will not sell. Our media business, in fact, has been made the company of the year in the Group. We are client heavy and our growth is steady,” he asserts.
The consolidation wave is looked at as a healthy development by some industry experts. “The trend to break free and set up smaller units has fragmented the market too much and clients have gained from this. The industry needs to work with better rates,” says Nayyar.
Sharma holds a contrarian view. According to him, consolidation is not deep or penetrative enough to push up rates. “Consolidation has not been so dramatic that it will have an impact on agency compensations in the short run. It may slow down the drop in agency compensations but not necessarily push them up,” he says.
If you are actively investing to grow your money month after month, you already understand the value of planning ahead. SIPs, long-term portfolios, retirement planning and goal-based investing all point to one thing. You are building a future with intent.
What often gets missed in this process is one foundational question. How well is the income that funds all these plans protected?
Term life insurance fits naturally into this stage of financial planning. It does not compete with investments. It supports them by protecting the income that makes long-term growth possible.
Why Income Protection Is a Core Part of Financial Planning
Every financial plan begins with income. Before money is invested or saved, it is earned.
Over time, this income is allocated across multiple needs:
● monthly household expenses
● EMIs and long-term loans
● savings and emergency funds
● investments aimed at future goals
As responsibilities increase, financial planning becomes layered. Each layer assumes income continuity. Term life insurance exists to ensure that this structure does not become fragile due to overdependence on a single income source.
It adds stability to plans already in motion rather than introducing a new objective.
What does term life insurance do?
Term life insurance provides a fixed payout to your nominee if you pass away during the policy term. The purpose of this payout is practical and clearly defined.
It is intended to:
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There is no investment or savings component. This keeps the product focused and cost-efficient, allowing individuals to opt for meaningful coverage without diverting funds meant for growth-oriented investments.
Why Term Life Insurance Complements Investing?
Investments and insurance play different roles in a financial plan.
Investments are designed to:
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Term life insurance is designed to:
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Keeping these roles separate improves clarity. Investments are allowed to perform without being forced to double up as protection, while insurance quietly supports the overall structure.
Who Should Consider Term Life Insurance?
Term life insurance becomes relevant when financial planning extends beyond individual needs. This typically includes:
a) Working professionals
When income supports shared expenses or long-term plans, protection becomes essential.
b) Individuals with long-term liabilities
Home loans, education loans and other EMIs often extend over decades. Term insurance ensures these obligations remain manageable.
c) Parents planning future milestones
Education, healthcare and lifestyle goals require continuity over many years.
d) Early planners with rising incomes
Starting earlier allows coverage to align smoothly with career progression and evolving responsibilities.
How Much Coverage Should Be Considered?
Coverage should be guided by financial reality rather than affordability alone.
A well-rounded evaluation typically considers:
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Many insurance companies offer options starting from 50 lakhs, 1 crore term insurance and higher. It allows individuals to choose coverage based on their income, liabilities and future plans.
How Term Life Insurance Fits Into a Long-Term Plan
Once set up, term life insurance does not demand frequent attention.
It does not require active monitoring, market tracking or performance reviews. Its role is structural rather than dynamic.
By ensuring financial continuity, it allows families to:
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When aligned correctly, term insurance strengthens the foundation on which investments, savings and retirement plans are built.
Choose the Right Insurance Partner
Once the need, coverage amount and role of term life insurance are clear, the final and most important step is choosing the right partner.
This decision should be based on:
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Term life insurance is a long-term commitment. The partner you choose today will be the one your family relies on years down the line.
When protection is aligned with purpose and backed by a dependable insurer, term life insurance becomes a quiet but powerful part of a well-built financial plan.
