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HindustanTimes Fri,01 Aug 2014

Political parties' ad budgets have swelled three times: Roth

Himani Chandna Gurtoo , Hindustan Times  New Delhi, March 14, 2014
First Published: 01:00 IST(14/3/2014) | Last Updated: 07:40 IST(14/3/2014)

Michael Roth, chairman and chief executive officer of the world’s second largest advertising network, the Interpublic Group (IPG), is in India to attend the company’s first board meeting in this country.

IPG has a presence in India through its agencies McCann-Erickson, Lowe Group and Draftfcb Ulka. Roth spoke exclusively to HT on Thursday. Here are the edited excerpts from the interview:

Political parties are reportedly spending humungous sums on advertising for the coming elections. Your group is earning a tidy packet from this. What is your take on this phenomenon?
Not all, but some money (is coming to us). The budgets of political parties have swelled by over three times this year. They are spending lots of money. We have no political leanings. When we take up political accounts, we treat them as any other client.

How would you compare India with China?
I would not like to choose. But we definitely have bigger offerings in India than in China. Also, in terms of long standing relationships, I would choose India. For Instance, our relationship with Unilever in India goes back 75 years through our group firm Lowe Lintas. We simply don’t have those relationships in China. And, as a market, India is forecast to become the most populous country in the world by 2028. Hence, between China, India and Africa, India stands out as most important Asia Pacific market for us.

What are the unique takeaways from the Indian advertisement market?
It is very interesting and unique to notice that print continues to grow in India against the trend in rest of the world. Here, print is much bigger than digital media and accounts for 40% of the total media spending. However, in the US, the print media is rapidly declining and digital media has gained enormous traction. However, while there are no estimates on when print will start declining the traction in Indian digital media has begun.

Advertising spends are often seen as a proxy for the larger economy. In the light of this, what is your take on India?
The Indian ad market is behaving phenomenally well. Despite the slowdown, we have reported a 12% growth in 2013 here. This includes acquisitions. Organically, we have grown in excess of 6%. Over the last four years, we have registered over 70% growth. India is, therefore, a very important market for us.

Can you share any absolute numbers?
I can offer some estimates. Asia Pacific, which includes India, China and Africa, accounts for 12% of IPG’s $7 billion (Rs 42,600 crore) annual revenues. (Hence, Asia Pacific’s revenue contribution stands at over Rs. 5,000 crore.)

What are IPG’s future plans and focus areas?
We will continue to invest in India. We have acquired a firm called Corporate Voice in the public relations (PR) segment. PR will be an important growth area for us. Also, there are many opportunities in India to grow via acquisitions. We have an annual acquisition budget of $150 million globally. Also, we will invest heavily in digital media, which has started gaining momentum due to the emergence of 3G and 4G broadband. However, we are hoping for a stable government after the elections and will firm up our investment and hiring decisions after the pending Lok Sabha polls.


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