How Independent Ad Agencies Are Thriving Among The Behemoths

Tapas Gupta Jul 18, 2024

Two of the large independent agencies, Crayons and R K Swamy have gone for IPOs in the last two years and this is a clear indication of things to come, says Gupta

Indian-owned independent ad agencies are not a recent phenomenon. Since the early & mid part of the twentieth century, independent agencies have been flourishing in Mumbai & Kolkata, and some of these like National Advertising Services (started in 1931), Press Syndicate (owned by the Mahindras, started in mid 1940s), Dattarams in Bombay (now Mumbai) while in Calcutta (now Kolkata) Paradise Advertising Agency was one of the earliest who set up the company in 1928, New India Publicity in 1930, Publicity Forum and National Advertising Agency during the mid-1940s by the Indian advertising entrepreneurs of that era. These are just a few examples, as there were more than 200 advertising agencies by 1950 mostly owned by Indians.

During the mid-1950s, there were quite a few foreign ad agencies in India dominated by D J Keymer, Grant Advertising, Walter Thompson, and S H Benson (later O&M) but the entrepreneurial zeal of Indian advertising professionals to form independent agencies continued with full swing. Amongst them, the towering creative personalities of the 1980s like Mohammed Khan starting Enterprise Advertising (later became Enterprise-Nexus), Trikaya (later Trikaya Grey & finally Grey) by Ravi Gupta and eminent professionals like Gautam Rakshit started Advertising Avenues which became well-known for its standout Onida TV’s Devil campaign. Rediffusion, a successful agency of that era too was started by two prominent ad-men Dewan Arun Nanda and Ajit Balakrishnan around the same time.

The proliferation of the new wave of networked MNC agencies in India started in the early/mid-1990s after the liberalisation measures announced by Dr Manmohan Singh in 1991. Most of the global big boys of advertising set up shops, both independently and in majority collaborations. The global Holding Companies brought with them their specialised brands in media, digital, health, and retail and also spawned their second agencies at a rapid-fire mode to start dominating the advertising business.

With global brand partnerships following the ‘Club Agency’ concept, these agencies became the natural choice of their partner clients. Meanwhile, and almost simultaneously, the new crop of large Indian brand businesses came of age besides the traditional Indian stalwarts of ITC, Tata, Godrej, Reliance, TVS, MRF, Escorts, Amul and the new age Indian brands started competing head-on with many MNCs.

A Level Playing Field

The traditional mainstay of independent Indian agencies has been these Indian entrepreneurial ventures that today are on the same deck or even larger than many of their MNC competitors. Just as an example, airlines, steel, cement, paints, paan masala, and the banking industry have mainly been Indian and a large part of them have been working with independent Indian agencies.

Mudra was one of the first large Indian-owned agencies that was amongst the top 5, but it later went into a tie-up with an international partner. Independent Indian agencies like Madison, R K Swamy, Crayons, BEI Confluence and a number of others are today larger than many MNC agencies in India and we take pride in building these agency brands which are regularly competing with some of the global agencies even for a few internationally aligned businesses as India has emerged as a key market for most global brands and their top-management often has the choice to take decisions outside their global alignments in India. But the mainstay of independent Indian agencies still continues to be the professionally managed large Indian companies and many of these have brands that are leaders in their respective categories.

The global agencies had long back recognised that to handle competitive brands as well as the rapidly emerging Indian businesses, they have to cast their nets wide & have been launching their second, often multiple agency brands in India in quick succession. JWT (then HTA) was the first to launch Contract Advertising in the mid-eighties and McCann Erickson had floated their JV agency PSL McCann in the mid-nineties in partnership with M&M who owned the agency Press Syndicate (PSL). I was the first CEO of PSL McCann in 1996. O&M had experimented with a couple of second-agency brands over the years and finally settled for 82.5 which is aimed primarily at the large Indian businesses and competitive brands. Similarly, Dentsu Group too has a couple of agency brands to compete in this sector.

Indian Businesses Riding High

Thanks to our present booming economy and the start-up culture continuing to proliferate, Indian businesses and their brands are flying high. Keeping pace with this are the Indian agency brands that are growing rapidly in size and stature. The challenges faced by the large independent fully Indian agencies are to invest rapidly in growing their infrastructure, and talent base and acquire state-of-the-art technology to be competitive & keep in pace with the MNC agencies who offer global standards in technology and talent pool. India is a rapidly growing market, global groups are investing heavily in quickly beefing up their organisation. The large Indian agencies realise this and have the vision of how to scale up, but what most of them lack are the substantial funds to invest in this re-engineering.

Two of the large independent agencies, Crayons and R K Swamy have gone for IPOs in the last two years and this is a clear indication of things to come. I am sure quite a few others will follow this model to get access to funds for scaling up their infrastructure, technology, and talent base to compete evenly with the best in the world.

Another interesting phenomenon is that a number of large Indian brands are also going global, and this can fuel the Indian agency owners to follow these international Indian brands and set up their international offices to service these Indian brands outside the country. Our two closest neighbours Bangladesh & Nepal have quite a few Indian companies who have set up their operations and are selling Indian brands. Indian agencies should be looking for suitable partners in those countries to service these businesses.

So, the beginning of this ‘reverse osmosis’ process may not be far away.