Global Advertising: Headquartered in India

With Maxus setting up its global headquarters in Mumbai, do we see many other global agencies follow its footsteps or this is a one-off story? afaqs! explores.

We are very much familiar with the 'India Growing', 'India Shining' story. In fact, 'shifting focus to the APAC and more specifically, to India', is a part of every global agency head's speech. But, how many have really looked at India from the perspective to make it their global agency epicentre?

Dominic Proctor, president, GroupM Worldwide has clearly shown his sincerity and commitment towards this region. The former CEO of GroupM India and South Asia, Vikram Sakhuja has been named the global CEO of Maxus. Along with this move, Maxus will now have its headquarters in India. This is for the first time that a global agency will be headquartered in India.

Do we see other global agencies following Maxus' footprints? There are various points to weigh.

Enough billing?

Many argue that an agency can only have headquarters in a region that gives it a lot of business.

Nakul Chopra, CEO, South Asia, Publicis argues that not many agencies have even APAC headquarters in India, forget about having global headquarters here. "Even on an optimistic note, including China, APAC contributes 25 per cent of the business. Ideally, an organisation should have headquarters where its centre of gravity for business is. I do not see that happening (in India) in the near future."

Citing the very topical Olympic example, he states, "Just because India won six medals at this Olympics, does not mean it is going to be the No. 1 at the next. Similarly, I do not see global agencies moving their headquarters to India, immediately."

Meenakshi Madhvani, managing partner, Spatial Access Solutions is in part disagreement with Chopra. She says that that for many global agencies such as WPP, a major chunk of their business comes from APAC. "It completely depends on how much your client is spending in the region and how much billing an agency has. If, for an agency such as WPP, around 35 per cent of the business comes from APAC, India and China being the biggest contributors, then we clearly see this becoming a trend."

In April 2012, Omnicom-owned Goodby Silverstein & Partners, earlier Chevy's lead agency in the US, and Interpublic's McCann Erickson, the brand's lead agency in India, China and Latin America, formed a 50:50 joint venture (JV) called Commonwealth. The JV services the global US$2 billion account of Chevy, worldwide. As a part of the whole deal, Mumbai was made one of the global hubs for Commonwealth along with Detroit, Milan and Sao Paulo. This made Mumbai the regional hub for some of the most important markets for Chevrolet.

According to Prasoon Joshi, executive chairman and CEO, McCann Worldgroup India and president, South Asia, India has the added advantage of language with business happening primarily in English. Also, speaking about how Mumbai was appointed as headquarters for Commonwealth, he says, "Mumbai has a lot of international outlook and also creative talent sits in Mumbai."

Where the talent is

Earlier, in a conversation with afaqs!, Dominic Proctor, president, GroupM Worldwide had himself referred to India as the hub of great talents. So will talent lead to the shift in focus to India? Highly placed sources in the industry have mentioned how it was not the business or billing but Sakhuja's resistance to move out of Mumbai that made Maxus shift its headquarters to India.

"It is a sweet spot between business and talent," says Rohit Ohri, executive chairman, Dentsu India Group. "India is growing despite the slowdown. For many global networks, India is still a focus area. Very clearly, the India perspective needs to be looked at. And only the talent here can give them that perspective, he adds. He feels that it was a great move to bring Sakhuja at the helm of the agency. "It has become a trend to see senior Indian leadership as a part of the agency's global committee."

We have seen in the past how many Indians are going abroad to head agencies in various countries. Many go to set up a new agency office in that region. Also, at the same time, we have expats coming to India, to give a strong leadership to the existing talent, the most recent example being that of Matt Seddon coming to head Saatchi & Saatchi after Kamal Basu's exit.

"This is a reverse trend that we are witnessing, where an agency is moving where the talent is and it is a good beginning," says Shashi Sinha, CEO, Lodestar.

Joshi feels that India has an advantage being a global headquarters, by virtue of the kind of creative and strategic talent that is present in the region. "Also, the Indian advertising industry is very mature," he says. But at the end of the day, he says, it is a combination of business, talent, exposure and outlook that matters. "Indians do have a lot of global exposure and the outlook is very cosmopolitan. This is what gives India an advantage," he adds.

Subhash Kamath, managing partner, BBH India sees the Maxus move as an exception, but sees it as a hope that could take shape as a trend in the future. "Ideas need to be global; stronger skill sets and strategic planning will make India the growth driver," he concludes.