WPP agencies set to compete in the BTL space

The marketing services space has been in the news recently as traditional agencies train their radar on possible mergers in this area, in an effort to
consolidate their offering in the BTL segment. JWT recently bought a stake in independent events marketing company Encompass while Grey Worldwide has just announced its acquisition of Chateux Hospitality, otherwise known as Rams Relationship, through its marketing services firm G2 Worldwide. 141 Sercon recently reconstituted its senior level management as a part of its integration within the WPP fold. 141 Sercon, formed after the merger of Bates’ agency 141 Worldwide with marketing services agency Sercon in December 2006, has appointed Subhash Kamath, CEO and MD, Bates India as chairman, 141 Sercon while Sercon’s Vijay Singh is the new MD and CEO of the agency.

Rajesh Ghatge is the executive director and COO for 141 Sercon. In addition, Jeffery Yu, chairman of Bates Asia and Digby Richards, CEO, Bates Asia are directors on the board.

With growth in the below the line space growing at about 25%, the interest in this area is understandable. Subhash Kamath, Chairman, 141 Sercon, said, “It was part of a larger plan for the group that was started two years ago. The scenario in the advertising industry is changing and is such that it is not sufficient for us to focus only on above the line to drive growth. More and more clients are seeking solutions for the brand, which are led by below the line activities. The merger with Sercon has given us the required expertise in the BTL area, which will help provide a single window brand solution for our clients.”

Vijay Singh, MD and CEO, 141 Sercon commented on what he felt was the trigger for bigger networks to look at this segment and said, “Corporates were spending anything between 40 to 50 percent of their marketing budgets on below the line earlier, which is when the financial heads of agencies figured that given their expenditure in this segment, transparency and rules of corporate governance needed to be applied to this process as well.”

For entrepreneurs like Singh and Rajesh Ghatge, the merger with 141 has been an opportunity to reach out to a larger resource pool. Singh added, “Access to people from around the world, as well as to global best practices, the ability to dip into a resource from anywhere in the world, all this has a tremendous impact on our learnings.”

Singh and Kamath are both clear that consolidation is a given in the marketing services space, with independent agencies aligning with the larger holding networks, in the coming years but as Singh points out, the days of the non specialist agency are dead and only super specialist agencies will survive in the coming years.