DAN’s growth continues to be market beating: Anand Bhadkamkar
Anand Bhadkamkar recently took over the reins of CEO at Dentsu Aegis Network India. Prior to this, he was COO & CFO, South Asia. Bhadkamkar has been with the network for 11 years and has seen it grow from Aegis Media to Dentsu Aegis Network.
In an interaction with Adgully, Anand Bhadkamkar, CEO, Dentsu Aegis Network India, speaks at length about his new role, DAN’s strategy for growth, acquisition strategy, investing in digital and talent and much more.
Please tell us about your role as DAN CEO, your vision for the network, taking charge from Ashish Bhasin and the way you see DAN growing in the coming times.
I’ve been with Dentsu Aegis Network for the last 11 years. My previous role was that of COO and CFO. I have been handling the operations besides the finance aspect during these years. I’ve taken the charge of CEO from Ashish, who has transited as the Chairman of APAC. The big shift for me is from a finance outlook towards a business outlook, and that’s what we have been transitioning to for the past year.
How are you finding the transition from a finance mindset to that of a business mindset? What do you think it brings in for the organisation?
The transition has been happening since when we had started as Aegis Media in India, to when we became Dentsu Aegis Network (DAN). I have been a part of this group throughout its growth journey – since when we were 15 employees in the company, to a 3,700-strong team today. I have been working alongside Ashish and the leadership over the last 11 years and we have been growing this business together. Therefore, it is not such a big challenge or a change for me per se from that perspective, because I have always been a part of the business strategy – from the time when we were planning for growth, to the acquisitions that we have done over the years in the market. Thus, it is more than just getting onto that role and moving forward.
I have been in this industry for almost 20 years now; prior to Aegis Media, I was with Lintas for almost eight years. I know the industry, the business, the people, our media partners and some of the clients quite well. In a way it is an easy transition.
How have you seen DAN grow over the last 11 years and what have been some of the landmark developments?
As I said earlier, we started out with 15 employees in 2008 as Aegis Media, when we were more of a challenger brand in the market, compared to WPP and IPG, who had been in the market for the last 80 to 100 years. One our big steps has been our acquisition strategy. The second major step has been investing in and developing our digital talent and capabilities. Today, almost 50 per cent of DAN’s revenues come from digital services. Another major decision for us has been to invest in our Out of Home (OOH) capabilities – Posterscope and Milestone. We are market leaders, with almost 35 per cent of the organised OOH business being handled by these two agencies. Thus, we have been evolving and growing our strength in these non-traditional capabilities. I think that strategy has worked well for us and we have been growing aggressively since 2008. For the last 4-5 years, our growth has picked up pace and we have been one of the fastest growing networks. In 2017, we were the No. 2 agency network. I think that is testimony to how our strategy has worked. As we move forward, we will maintain this ambition and aggression.
What was the strategy behind acquiring the smaller agencies that you have now got on board?
Globally, DAN has a very clear strategy for acquisitions. We have acquired multiple businesses across the globe. What we look for is not just generating profits or to gain additional business into the fold. We look for three broad criteria for acquisitions. One is scale, we have business but we want to scale it up with our acquisition partner much faster and much larger. Second is capability building; there might be a capability that we have but we might not have completely perfected it. When we acquired Communicate2 in 2012, that time search and performance was not our forte, so we partnered with Vivek and we brought in the capabilities of search performance into the business. We already had a Posterscope, which was a sizeable business, but with Milestone we got a scale in the market. So we were able to catapult into the No.1 position in the market.
The third aspect that we look for is niche or some specialisation that we are able to bring in. For example, we acquired Fractal, which is a UIUX design company. That gave us an edge over others on how UIUX expenditure works. We acquired Fountainhead for events – it was both scale and a separate capability that we got into the business.
The strategy for acquisition is where we feel that it’s going to add value to our long-term growth objectives. So, acquisition is a strategy for supporting growth, it’s not a strategy in itself.
How has DAN’s one P&L philosophy helped in terms of business success?
I would say that has been one of the primary reasons or a key contributor to our success in the market. All our businesses – we have 23 brands in the market – work together. When there is a solution to be provided to the client or we go to a client, we go as a single team. Whatever is the outcome required by the client, whatever are the client’s needs, multiple brands will come together. It might be that Posterscope might go to the client as an OOH agency, but if there is any requirement for offline media or there is a digital requirement, then those experts will go to the clients’ places and solve their problems. So, one P&L is our success mantra and that is something which we will keep on doing as we move forward.
What would be your strategy to power the digital side of the business?
Out of 3,700 employees in the market, around 2,000 are digital experts in our business and almost half of them search performers as well. So, we are the leaders in search and performance. Where we are looking at moving forward is the way this business is moving – this digital transformation that is happening at clients’ places, the way brands are working to reach out to their customers – so investing more on those new capabilities and new talents and market capabilities. Along with developing these capabilities, and wherever needed, also associate with new partners and look for acquisitions.
So, the idea is, we have this leadership position and we will keep on growing more into the business, invest more in the business through acquisitions and also through investing in our current talent and investing in new technologies. So we have DAN Data Labs where we have developed tools along with Facebooks and Googles, which we use to provide solution to our clients. That’s something which will keep on happening and we will keep on evolving.
How much of an impact do you see on the ad business in India due to the current economic slowdown?
Currently, the slowdown has definitely impacted the industry. As you can see in the first nine months, the growth has been lower than what was anticipated and it has not kicked off. The automobiles and BFSI sectors have been impacted in a big way because of that. But with the festive season coming up, we feel that we should see an upside over there – it won’t be as it was in the earlier periods, but still a double digit growth should be there in the market.
This year would not be as aggressive as we had been growing last year as a market, but the next 2-3 months, I think, would have a positive input. The Government is taking a lot of actions, they have been making multiple policy decisions. So, over the period of 3-4 months that should start paying dividends and the growth will come back to its earlier rate.
What kind of revenue growth are you expecting for DAN India in the current fiscal?
I can’t share the numbers per se. What we had set out in our annual budget at the end of 2018 we definitely are reaching those targets and it’s a double digit growth, which is faster than the market growth. Our ambition and our focus have always been to grow faster than what the overall market growth rate is and we definitely are there. As I had said, almost 50 per cent of our business is digital, which is growing at 28-30 per cent in the market. So, our growth continues to be market beating.