What will the new dentsu look like?

In India, the process of bringing 23 agency brands down to 6 has begun. Won't clients miss sexy agency brands like Webchutney and Taproot?

Granular.

That’s the adjective I’d use to describe the dentsu network in India as it stands today. After taking a close look at the possible reasons for the management flux at dentsu, earlier this month, let’s now take a look at the agencies under the dentsu umbrella and the most likely re-classification, as per the new global structure.

To recap, the network is looking to bring its existing set of shops under six go-to-market agency brands - Carat, Merkle, dentsu X, iProspect, Dentsu mcgarrybowen and Isobar. Superimpose another classification on top of this set of six Campbellian hero brands; every agency will fall under one of three service lines - media, creative, CXM.

Until recently, the network had the following 23 brands under its umbrella:

1. Isobar

2. Webchutney

3. WATConsult

4. Fractal Ink Design Studio

5. Posterscope

6. Milestone Brandcom

7. Fountainhead MKTG

8. Hyperspace

9. Brandscope

10. Taproot Dentsu

11. Dentsu India

12. Dentsu One

13. Dentsu Impact

14. mcgarrybowen

15. Perfect Relations

16. Indeed

17. The Storylab

18. Dentsu X

19. Vizeum

20. Carat

21. SVG

22. Merkle Sokrati

23. iProspect

Of these, five have already been regrouped – SVG has been folded into Merkle (via Columbus), Vizeum has been folded into iProspect, Fountainhead MKTG has been dissolved, Milestone Brandcomm has been folded into Posterscope, and Dentsu India, an inadvertently eponymous agency name, is now Dentsu mcgarrybowen.

Which brings the number of agencies down to 18. How will they be regrouped? Will the network completely do away with its strong creative brands, like Taproot and Webchutney, or will they stick around as informal sub-brands under dentsu’s creative line of business, which is now stacked under the… hard-to-pronounce mcgarrybowen brand?

Surely, each market across the world must have its own set of strong agency brands; perhaps, dentsu’s six hero brands ought to have been selected basis local popularity over global convenience? Or would that defeat the very purpose of this mega consolidation?

A quick look at the three business lines and how 18 agency brands might be categorised therein. There has been no official announcement from the network on this yet; this is an afaqs! analysis.

Creative: Two hero brands comprise this bucket – Dentsu mcgarrybowen and Isobar. Under the former are agency brands like Taproot, Webchutney, Dentsu One, Dentsu India and Dentsu Impact. And under the latter are Isobar India, WATConsult, Perfect Relations.

Media: Three hero brands comprise the media planning and buying front – Carat, Dentsu X and iProspect.

Agencies like Indeed, Story Lab, Brandscope and Hyperspace either are being or have been folded into Posterscope, which, in turn, will become part of one or all three media agency brands, in a year or so. “This is like going back to the good ol’ days when specialist services like outdoor were not housed under separate shops, but were rolled into the media planning and buying division,” remarks a former dentsu employee.

About Story Lab, an entertainment content production wing, some experts surmise it belongs with the creative lot under the mcgarrybowen brand. Last year, dentsu merged The Story Lab in India with its celebrity, influencer and sports marketing division C’Lab, which used to be under the purview of Haresh Nayak, ex-president, Posterscope APAC, who moved out of dentsu earlier this month.

CXM: There’s one hero brand under the customer experience management vertical – Merkle. The agency brands here are Fractal Ink Design Studio (previously under Isobar) and Merkle Sokrati itself, including a B2B arm.

When dentsu goes to market…

Of course, all this analysis is about agency names on paper. In the real world, it’s more about the merging of leadership and teams.

How will this culling of popular agency names change things for the network at the pitch level? Won’t historically strong agency brands be conspicuous in their absence?

Shiv Sethuraman, founder of The New Business, a business acquisition service for communication agencies, (that helps them prepare for pitches), says, "Yes, it is an issue and clients might be apprehensive about the loss of an agency brand they're familiar with and love. Clients will have to be reassured. There might even be an odd client who may choose to exit, but I'm sure the network has calculated the pros and cons of this integration and while this may seem dramatic in the short term, it will sort itself out in the long term.”

He goes on to say, “Also, this is more of a problem on the creative front, which is tied to individual brilliance and relationships. But on the organisational side –processes, tools, efficiencies, media buying, etc. – this is less of a problem."

A former media buying head at GroupM says, “I don’t think this is an issue on the media side, as long as the CPRPs and ROIs are delivered,” adding, “This change will affect the agency more than the client, as their ancillary revenues will be impacted.”

What do clients make of this?

While some agency insiders tell afaqs! clients are confused and concerned with the goings on at dentsu, I also spoke to three senior brand marketers to get a sense of what things look like to them – two of them are clients of dentsu at the moment and one of them used to be. Overall, I gather that people and personal equations matter more in the creative ecosystem and services matter more in the media buying world.

“The spate of exits is startling. It’s not a typical organisational reshuffle. One can tell there’s more at play. It’s obvious they’re cleaning up the stable after acquiring too many shops,” says the CMO of an FMCG brand.

He adds, “Collapsing 23 agencies into six is fine, but retaining the right personnel is what will matter. Advertising is a people-driven business. It’s about the account management relationships that agencies have with marketers. So at the pitch level, it’s okay if the agency brand Webchutney is not present, but it’s important for Sidharth Rao to be in the core team, though.”

Concurring, a handset marketer says, “The name of an agency does carry gravitas but it’s the people and services that matter more. If dentsu can convince me that these two things are intact then the name won’t matter. In fact, for media buying, the tools matter more than the people even, because creative minds keep moving across agencies and networks, but marketers care about the non-human intelligence an agency brings.”

Lending a slightly cynical view, an auto CMO says, “The reliance of our marketing business on one campaign or one creative agency has gone down anyway. Besides, marketers don’t go to one network for all their needs – creative, media buying, production, social media, etc.; it’s often scattered across networks. Yes, what’s happening is a concern, but only if the core teams working on our brand’s projects suddenly disappear will we get involved.”

For most clients, it's a wait and watch game.