What ails Madison?
Rumour mills have been agog in the past few days about Sam Balsara selling Madison to a foreign network. This is despite the fact that the chairman and managing director of the Rs 3,500-crore marketing communications group has always denied any such possibility.
For, he is an adman who wears his Indian badge proudly. In a world where most of his peers have done just that: sold out to some foreign player or the other, it would be easy to take such a call, say observers. But Balsara, an alumnus of the Jamnalal Bajaj Institute of Management Studies in Mumbai, who has spent 30 years in advertising & marketing working in agencies such as Contract and Mudra as well as in companies such as Cadbury's where he was a brand manager before starting Madison in 1988, has had to deal with such rumours for a few years now.
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The latest rumours say Balsara, who counts his former employer Cadbury, Airtel and General Motors as his clients, is talking to GroupM and Dentsu for a possible sellout. Balsara, who is a familiar face at industry fora and has also been a key functionary in bodies such as the Advertising Agencies Association of India, could not be immediately reached for his comments.
So why is such speculation gathering steam? One reason could be Madison has been seeing a steady loss of business on the media front - something that has been close to his heart and is the cornerstone of his Madison empire. In the last one year, Madison has lost accounts such as Coca-Cola to Lodestar, Bharti Walmart to ZenithOptimedia, Axis Bank to Starcom and more recently Britannia to GroupM-owned MEC.
There is also speculation that Tata Tea from Tata Global Beverages may move out of Madison. The company had called for a pitch a few months ago to review its media duties. GroupM is believed to have won the round. But the hard-nosed Balsara, known for his sharp mind, appears to have prevailed over the TGB management to retain the business for now.
In recent months, Balsara's Madison has been seen pitching for businesses such as Jabong, an e-commerce website, in a bid, say agency sources, to ramp up its roster of clients.
The question is: What ails Madison?
Persons in the know say that an inability to manage senior talent - the exit of Punitha Arumugam, Madison Media group CEO, being a case in point While Arumugam has said that she was keen to be associated with the digital medium in some way - she took over as vice-president, agency & advertiser relationships at Google this April - agency sources say that in her loss Madison has actually lost a key executive who painstakingly alongwith Balsara built the media business over 13 years. "I think Madison is going through what I describe as the post-Punitha age," says a media agency head who declined to be quoted. "She was a very good media professional, who also managed the clients well. While Balsara is an astute businessman, you require strong professionals in your team to run the show."
Agency sources also say that Madison has been unable to keep abreast of the times - it is largely viewed as a traditional media specialist in a day and age when digital advertising is gaining ground.
Currently, digital advertising constitutes just about 5-6 per cent of the Rs 30,000-crore advertising pie in India. But unlike traditional media such as print and TV, digital advertising is growing at about 50 per cent per annum. Print, on the other hand, is slated to grow at six-seven per cent this year, while TV is likely to grow at 10 per cent. Of total advertising, print constitutes about 43 per cent, while TV is about 42 per cent.
For all this, nobody denies the work that Balsara and his Madison have done to bring media into the forefront. At a time when agencies were struggling to get their act together on the media side, Balsara's Madison emerged as a strong media independent, thanks to skills both in media planning and buying. Competitors to Madison at that time included Mindshare from WPP, Initiative from Lowe Lintas, which belonged to IPG among others.
With his sound understanding of media habits and the way it could shape an advertiser's communication plan, Balsara managed to consolidate a number of businesses both on the planning and buying side over the years.
"In the 1980s and 1990s, media was a backroom function. Sam gave it a respectability with the work that he did and the skills he brought to the table," says another media agency head.
It was also in the 1990s that Balsara famously tied up with ad agency D'Arcy Masius Benton & Bowles (DMB&B) on the advertising side - an arrangement that would break-up by 1999. A decade later, Balsara once again had a foreign partner in Trevor Beattie, with whom he has a joint venture BMB Madison India. On the media side, for instance, Balsara has a 51:49 joint venture with GroupM to manage the Procter & Gamble business under MediaCom. But barring these alliances, Balsara has steered clear of anything that would remotely mean that he is ready to sellout.