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Against the tide

MAA Advertising has ambitious expansion plans that will pit it against the big boys of the trade.

Rahul Sachitanand        Print Edition: November 16, 2008

MAA’s Peerbhoy: A contrarian
MAA’s Peerbhoy
In 1991, when most advertising companies weren’t interested in allying with foreign collaborators, Bunty Peerbhoy, Chairman and MD, MAA Communications, just did the opposite. He roped in Bozell, the Interpublic Groupowned agency, and offloaded a 29 per cent stake. In September this year, he went against the tide again, by buying back his partner’s stake.

Now, Indian advertising’s contrarian player wants to transform the company his father Ayaz Peerbhoy started in 1959 into a full services player, covering related fields such as in-store and embedded advertising as well as emerging mediums such as mobile and in-store retail advertising. Peerbhoy says he is already getting proposals from private equity players to come on board as “passsive investors” to fund future growth. “We see ourselves as one of the key stakeholders in Indian advertising,” he says.

MAA: The story so far
1959:
MAA started by Ayaz Peerbhoy

1980: Agency splits between his two sons geographically—Bunty (south) and Sajid (north)

1991: Bunty Peerbhoy sells 29 per cent stake in his agency to Bozell

2003: Sajid’s agency, Speer, is sold to O&M

2008: MAA Communications buys back stake from Bozell

In the 1980s, MAA blossomed from being just an advertising agency into one encompassing related fields such as public relations and focussed financial and retail advertising. Since then, MAA has worked on several ad campaigns ranging from Kissan jams and Aristocrat whiskey to Kohinoor condoms and Prestige pressure cookers. Peerbhoy now has plans to make inroads into emerging mediums such as Internet and mobile advertising. “These mediums have different creative rules and business metrics,” says Peerbhoy. “We may even consider acquisitions to boost our presence in these emerging segments.” Mobile advertising is seen as the next big frontiers for conventional ad companies such as MAA. Simultaneously, as expected, boom in broadband penetration could be another reason for eyeing this space.

MAA Communications has also entered other markets such as instore advertising through its Intel Capital-backed Tag Media. The group has recently launched three new subsidiaries—Sabre Digital, Turn On and Masala Tea—to further expand operations. Sabre Digital will deal with digital marketing consultancy, Turn On with experiential marketing and Masala Tea with embedded marketing in a variety of TV programming. “We will always blaze our own trail…We are drivers of economic value,” declares Peerbhoy.

New horizons
MAA Communications has entered many emerging segments through tie-ups or subsidiaries.

Company
Tag media
Sabre digital
Turn on
Masala tea
Focus
In-store Advertising
Digital Marketing
Experiential Marketing
Embedded Marketing
Industry observers, however, point out that a direct result of the slowdown is a reduction in or deferment of advertising spends by small and large companies. At the same time, private equity deals have been reduced to a trickle, since valuations are low and owner-promoters may not be willing to sell now.

These factors might impact MAA Communications’ aggressive expansion plans. However, as Peerbhoy says: “We are a profitable company and we have enough internal accruals to fund our plans. We’re happy to wait for a more conducive time to bring aboard investors.” With advertising increasingly dominated by large-scale players, smaller companies may not have too much time on their hands.

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