In early July, RK Swamy and BBDO introduced parting of how after a partnership that lasted 37 lengthy years. The RK Swamy Group had good causes to separate as Chairman, Srinivasan Swamy, articulates on this interview. “We are usually not a pure play promoting company however a marketing services group,” he says. He additionally speaks in regards to the future development for the group, which clocked revenues of $100 million. Excerpts:
Are you and Madison the final males standing as home-grown, Indian-owned companies?
There is a huge distinction between Madison and us. We initially bought 50 per cent stake to a world company, however we weren’t comfy with it. We then began BBDO India and gave them a majority stake in it, and purchased again majority in RK Swamy. And then, after some 12 years we withdrew from the connection. Unlike us, Madison by no means had a partnership with a world firm to begin with. We had a good relationship with BBDO since 1985, and been with them for 37 years. We went in with whole goodwill and got here out with a number of goodwill. Irrespective of the financial relationship that we had with BBDO, we even have a robust private relationship.
So, in 1985 once you tied up with BBDO, was it fairly early for Indian promoting?
We had been among the many first Indian firms to begin an affiliate relationship with a world entity. We first entered into a partnership with BBDO in 1985 after which in 1989, when authorities opened as much as international firms, we first gave them a 20.1 stake in RK Swamy (and later went as much as 50.1 per cent).
What was the inflection level for separating from BBDO?
There was nobody inflection level as such. People assume we’re a pure promoting company; that’s the primary fallacy. We are an built-in marketing services group, whereas RK Swamy the company (through which BBDO was concerned)had primarily media and inventive and had been just about a conventional promoting company. Parallely, we had been constructing a marketing analysis and a knowledge analytics firm, an occasions /activation unit, a persevering with medical training follow, and we had been spreading our footprints throughout varied segments available in the market. While we had the connection with BBDO for promoting solely, we couldn’t go to shoppers and say that we’ll give you promoting services and another firm can deal with different wants. Now we will current a unified face. In truth, senior administration of the working entities would really feel possession solely of the unit they had been concerned with. To break free from that, the departure from BBDO makes it doable for us to take a look at RK Swamy as one giant firm. In truth, below RK Swamy now now we have introduced in Hansa Research and Hansa Cequity as direct subsidiaries.
These two firms have every other buyers? Are you planning to merge all of them now?
In Hansa Cequity we had a personal fairness accomplice once we wished to develop. They had been with us for 4 years. We did a formal valuation and purchased again the personal fairness accomplice like we purchased again BBDO. Now, all three firms are all privately owned by us. I don’t consider we have to merge to efficiently function the businesses. It’s higher to maintain them as totally different entities but it surely’s straightforward to combine the services we provide.
At the momentwe haven’t any plans to vary something; companies will run as earlier than. But, the distinction is that we’re now one firm and the sensation is sinking in and cross-selling will occur now. The silos are going. And the truth that we’re one giant built-in group will assist us introduce shoppers to one another and work collectively as a bigger group in order that the consumer will get a profit out of it.
What are future plans for development? Is an IPO on the desk to develop?
If we wish to develop, IPO is an possibility. But, there are two opinions on an IPO. We run a worthwhile enterprise and wish to develop it. We have opened subsidiaries in Singapore, Dubai and Bangladesh and we have already got a firm within the US. These primarily prolong services within the areas of analysis and analytics and in addition marketing consultancy services within the US. Advertising at one stage is now a low-tech enterprise, except there’s some significantly differentiated providing. In areas of analysis, we will supply differentiated service such that these markets can see worth in. Here we already do multi-country tasks from India for worldwide shoppers. Numerous collaboration is occurring between the analysis and analytics teams. That sort of collaboration remains to be not seen in RK Swamy. It’s as a result of the promoting shoppers have all the time wished to rent totally different specialists for various duties. It goes to take time.
What about your digital play? Do you right this moment supply the total stack starting from print, TV, digital and social media marketing?
We have a very robust digital play; as a matter of truth, now we have particular teams of people that concentrate on digital. We have giant digital shoppers, who spend a lot of cash with us. Today, you possibly can’t be in promoting with out doing digital work. From the very starting, we by no means checked out digital as a specialist medium; it’s similar to one other media so, don’t complicate your life by treating it as a particular beast, and having a specialist separate group for it. People have been educated to take a look at issues holistically (i.e together with digital) to unravel a drawback and ship a resolution.
RK Swamy has had some conventional long-standing shoppers, proper?
Yes, now we have long-standing ones resembling RBI, SBI, LIC. Hawkins has been a consumer for lengthy. They grew to become a consumer in 1985, 37 years in the past. The similar values that their founder Brahm Vasudev had, the present technology additionally has. If they’ve stayed on with us for all these years, we will need to have been doing one thing proper for them. Then there are shoppers like Amrutanjan, TAFE, Magicbricks, Havells which have been rising very properly. We work for south India’s largest edible oil model, Gemini. They have been a enormous success story as properly.
The new age start-ups are usually not trying on the conventional huge guys in promoting. Is that impacting bigger companies?
They don’t wish to accomplice anybody on a long-term foundation. They do tasks. There are a lot of small boutique firms which have sprung up, began by profitable promoting professionals. They have good credentials and have relationships with shoppers, and it’s straightforward to do a undertaking with them than have a long run relationship which is monthly-feesbased. It’s a transactional sort of relationship. I consider that it’s straightforward for shoppers to present a undertaking than to enter a long-term relationship because it’s value efficient. But a long-standing relationship with a bigger company helps with continuity because it has organisational reminiscence on what was completed few years in the past and what labored and didn’t.