In a trailblazing move, 29 Indian advertising agencies belonging to the Advertising Agencies Guild have pooled their media functions and engaged Carat of the United Kingdom to handle them.
"Together, we represent media buying of over Rs 400 crore (Rs 4 billion) with which we can give a fight to the media buying arms of global advertising agencies," AAG president and Crayons advertising managing director Kunal Lalani told Business Standard.
All the agencies are Delhi-based and include names like Capital, Headstart, Crayons, Arms, Akshara, Indus Union and Rashtriya. "These are all mid-sized agencies with billings between Rs 10 crore (Rs 100 million) and Rs 60 crore (Rs 600 million)," Lalani added.
To begin with, Carat India, a wholly owned subsidiary of Carat of the UK, will set up a special division in Delhi that will interact with each of these agencies individually but will represent them collectively to companies as well as the media.
"In the first phase, Carat's role will be that of a consultant, for which it will be paid a fee. In the second phase, there will be no media department in the agencies. Carat will be our media department," Lalani added.
These agencies decided to come together after they found they were losing business to bigger outfits like WPP's Mindshare, which represents substantially higher media buying power.
"While it is difficult to replace a company on the creative side, we are being replaced on the media side. Once the bigger agencies get a foothold in media buying, they can replace us in creative as well," Lalani said.
Apart from Mindshare, the other bigger media buying agencies in the country include Madison, The Media Edge, Initiative and Optimum Media Solutions.
"After meeting several overseas companies, we decided on Carat because it is a standalone media buying company and does not have any plans to become an advertising agency," Lalani said, adding that Carat was the top media buying house in Europe and the third largest player in the Asia-Pacific.
According to Lalani: "The association with Carat will help the agencies learn the scientific approach to media buying. It will also help us access the data available with Carat."
