Experts say the move of merging units makes sense where there are more than two agency brands within a vertical
WPP, the world’s largest marketing communications company, on Tuesday announced that it was merging group agencies Burson-Marstellar and Cohn & Wolfe, both operating in public relations (PR), to deliver integrated solutions to clients.
The merger, which affects India as well, is expected to hasten consolidation in the domestic PR agency business, which has seen an emergence of big five marketing communications companies WPP, Omnicom, Publicis, Interpublic, and Dentsu largely through acquisition.
Only a year and a half ago, Japanese major Dentsu had acquired independent PR agency Perfect Relations in India in a move that mirrored consolidation in the larger advertising and media market here.
“Most agency groups will increasingly consolidate or bring together synergistic offers. It is led partly by clients, which find it impossible to deal with multiple agency partners. So, coming together makes sense and that will be the trend as the business moves ahead,” Ashish Bhasin, chairman and chief executive officer, South Asia, Dentsu Aegis Network, said.
Experts say the move of merging units makes sense where there are more than two agency brands within a vertical. In WPP’s case, there were four in PR — Burson-Marstellar, Cohn & Wolfe, Hill & Knowlton Strategies, and Ogilvy PR.
The merger of the first two (Burson-Marstellar and Cohn & Wolfe) reduces the number to three, and pushes up the merged entity called Burson Cohn & Wolfe among the top three in the global PR firms.
From India’s point of view, the deal is expected to play out in the next few months with a likely announcement of the local leadership of the new entity, sources said.
Prema Sagar, vice-chairperson of Burson-Marsteller, Asia Pacific, and principal & founder, Genesis Burson-Marsteller, said it was too early to say how the merger would play out in India.
Burson-Marstellar came to India in 2005 with an acquisition of Genesis PR, which was founded by Sagar. This was followed by Hill & Knowlton Strategies, also a WPP PR agency, which merged with IPAN, the PR arm of ad agency J Walter Thompson. While Ogilvy PR has been a specialist unit within the larger Ogilvy & Mather group, Cohn & Wolfe set up base in India only three years ago with the acquisition of Delhi-based Six Degrees PR.
While rival Omnicom has three PR agencies in India including FleishmanHillard, Ketchum Sampark, and Porter Novelli, it is unclear whether the three will come together here anytime soon.
Last year, Omnicom had merged FleishmanHillard, Ketchum, and Porter Novelli in four European countries as part of a global mandate to integrate synergistic offers. It already has an umbrella unit called Omnicom PR Group globally, which houses all its PR agencies.
The merger of Burson-Marstellar and Cohn & Wolfe will trigger consolidation in the domestic public relations market· This comes as clients demand fewer agency partners to deal with it· Groups with more than two agencies within a vertical, including PR, may consider coming together· This will improve scale, integrate compatible capabilities