Dentsu Aegis Network (DAN) has been in the news for acquisitions and mergers of late and will continue this in the coming years. Ashish Bhasin, DAN Chairman and CEO South Asia, told exchange4media that the agency aims for 50 per cent inorganic growth in the coming years.
He said, “Acquisitions are a major part of our growth strategy. I would like to get to a position when 50 per cent of our growth is organic and 50 per cent is through acquisitions.” He added that in the future, as in the past, Dentsu’s acquisitions will always be strategic and not for the sake of revenue or profit.
While Dentsu is acquiring companies across sectors, it clearly has a bent for specialised digital capabilities. “We are overweight on digital and we believe that all businesses will either become digital or will in some manner or the other be impacted by digital. The acquisition with SVG Media, which is one of the largest digital companies, makes us leaders in the digital sphere,” said Bhasin. He added that approximately 35 per cent of the Network’s revenues come from digital. Incidentally, digital’s revenue contribution to the advertising pie is only 12-13 per cent.
With its most recent acquisition—SVG media—almost 1,300 of DAN India’s 3,300 workforce is in digital. The current acquisition of SVG Media includes the flagship brands DGM, Komli, and Seventynine. It is interesting to note that SVG Media’s growth plan also included a fair amount of inorganic growth. In 2015, SVG acquired Komli Media’s India business. The company had acquired Seventynine, a mobile video technology platform, in 2014.
Over the years DAN has acquired companies with varied digital capabilities, including iProspect, isobar, WAT Consult and Dentsu Webchutney. Before SVG Media, Dentsu’s most recent acquisition in the digital space in early 2015 was that of WAT Consult spearheaded by Rajiv Dingra. According to media reports, Dentsu acquired around 75 per cent of the stake in WAT Consult at a valuation of around Rs 200 crore.
On the non-digital front, the company has been steadily acquiring firms from a broad spectrum of media sectors. Following the acquisition of WAT Consult in January 2015, the Network has expanded its capabilities across sectors from public relations and events to experiential marketing. Later that year, the Network acquired a majority stake in Fountainhead Entertainment, an experiential agency. Industry sources had pegged the deal size to be between Rs 350 crore and Rs 400 crore.
In 2016, Dentsu also bought the Perfect Relations Group, which was the second largest PR business in India, and with this, made its foray into the world of public relations.
Then, in 2016, Dentsu also acquired Fractal Ink Design Studio, an experiential design studio. Fractal Ink, a leading player in the experiential design segment, brought to the table expertise in mobility and user experience, which are two disciplines that have a rather high demand in the market.
Evidently, acquisitions are central to DAN’s growth strategy. With the latest aquisition of SVG Media, the Network adds to its existing portfolio data led search, performance marketing and mobile capabilities.