Maurice Levy, Chairman, Publicis Groupe, gave Business Today's Ajita Shashidhar an e-mail interview a couple of days before announcing that the merger with Omnicom was off. Excerpts:
Q. Publicis Groupe has been extremely active in India since 2006/07. But it has been in India since the late 1990s. Why did you go slow at first?
A. Publicis Groupe has indeed been pretty active on the Indian M&A market. In a year and a half, we made eight acquisitions: integrated marketing with Beehive Communications, software services with Neev, digital marketing consulting with Convonix and MarketGate, integrated digital with iStrat, performance marketing with Resultrix, etc. In my view, the depth and span of our expertise is now an industry spearhead in India, and Indian talents are pollinating our global operations.
You're absolutely right: our Indian focus did soar from 2006 onwards. However, there has been no India-specific lukewarm start, as you alluded to. Truth be told, the rationale was group-wide, and the grander scheme of things offers a better perspective. Since 2006, Publicis Groupe's growth has been fueled by two powerful engines, namely emerging markets and digital. We invested $3 billion in acquiring top-notch digital capabilities, while fast-growing markets have topped our agenda - first and foremost India and China. As a result, I believe it would be misleading to think about a slow start in India prior to 2006. It's rather fair to say that India was at the forefront of a growth tsunami from 2006 onwards.
Q. While emerging markets is a focus area for the group, you have been taking a personal interest in India. Is that true?
A. I can only concur: emerging markets are critical to Publicis Groupe, and India is especially important to us. We firmly believe that when these markets become mature, they will deliver. It is a wise investment because the revenue we can get from our investment today is not aligned to what we put into our mature markets. Admittedly, the size of the budgets is not commensurate with what we are making in those markets, but it's the name of the game. Emerging markets are our future.
In such a context, India stands apart. The potential is simply eye-popping: for instance India, with 100 million Facebook users, is likely to be the second largest social media market in the world - second only to China.
Early on, Publicis Groupe has been deeply committed to India and we now have 2,500 employees across the country. As mentioned earlier, many strategic acquisitions have allowed us to greatly enhance our capabilities, and we will continue to invest in Indian talent in coming years. It's a group-wide focus, since all our brands - PWW, MSL, Razorfish, Vivaki, ZO, PHCG, Leo Burnett, Saatchi & Saatchi - have invested in India. It's also a focus governance-wise, as Rishad Tobaccowala is a member of our Executive Committee and he heads all our digital operations.
Q. Apart from endless meetings with your team and talking to acquisition candidates, what do you like doing in India?
A. What a programme, it's like questioning a tourist about French cuisine. I do love India and, to the best of my recollection, I have in mind very powerful and inspiring images, some predating my first visit to India in the 1970s. Mahatma Gandhi and Jawaharlal Nehru, independence in 1947, the 1950 Constitution which put in place a secular and democratic republic, a spearhead of the Non-Aligned Movement, the Green Revolution, a large urban middle-class and low-cost workforce, a major exporter of information technology and software, and very large conglomerates. In a nutshell, an impressive overhaul as a rising nation, and on top of that, a key member of the coveted BRIC club.
I have many friends in India and I regret to not visit more often. I have great admiration for Indian entrepreneurs and the culture of India. I'd love to have more time to visit, to discuss, to eat the wonderful Indian food and just enjoy the time. Unfortunately, it does not work this way.
Q. Coming back to business, most of your acquisitions in India have happened in the digital space. Is that how you plan to carve your strength against the competition?
A. There is no plan set in stone. We are ready to value outstanding talent if and when relevant, whatever the field of expertise. Advertising and communication is a people business, and we have to remain alert and open-minded. That being said, it's true that most of our recent acquisitions were digitally focused - just like the whole group, actually. Publicis Groupe is a world leading digital player, and boasts world-class agencies, such as DigitasLBi and Razorfish. It a clear differentiator vis-à-vis our competitors, and the same applies in India. I would even say that the opposite would be puzzling, given the amazing Indian talents your have across the country.
Q. WPP has been in India for almost 60 years through agencies such as JWT and Ogilvy. What are the advantages and disadvantages of being a late entrant?
A. Clearly, being there for many years gives you the advantage of awareness, knowledge, reputation and a good market share. In comparison, being in the market now brings freshness of ideas and solutions, as well as hard work to establish yourself in that country.
Q. How is Publicis different from WPP or Interpublic?
A. We are vive la difference - a true concept of sharing that has always loved and celebrated the differences of cultures and languages in the countries where we operate. We invest in innovation - in people, not only talent - and believe that communication can help clients win market share and grow. As for IPG and WPP, I suggest you ask them.
Q. When you say your vision is to become a strong No. 2 to WPP in India, how do you plan to go about it? How do you plan to build Publicis as a cohesive entity in India? Agencies in most ad networks function as separate entities, and I often wonder how much they imbibe the philosophies of the group company.
A. We have looked for the best way to compete in each country. The most important aspect is to bring our clients a competitive angle and reasons to believe we can help them better. It is about talent, commitment, innovation, and return on investment. There are not many ways to grow: you have to do better than the competition. That is always my goal.
Q. Publicis India has creative agencies, media agencies, digital agencies, a healthcare consultancy and a marketing consultancy under its umbrella. What are your areas of strength, and what are the challenges?
A. I would be hard-pressed to speculate on specific entities in two or three years' time while we are fully focused on closing the proposed merger with Omnicom. However, I can confirm that agencies across the group are performing well and that we are in an exceptional position to reach margins of 18 to 20 per cent by 2018, as targeted in our 2018 strategic plan drafted before the merger was launched.
Q. How will the much-awaited Publicis-Omnicom merger help the India business? Omnicom has a small presence in India.
A. As you have seen, the merger is under process and we wait for some decisions. Until then I cannot comment.
Q. One hears that you are in advanced talks with Sam Balsara to acquire Madison. Is it true?
A. I have known Sam for many years, and I believe speculations have existed for that many years as well.
Q. Can you tell us your vision for India?
A. I've been struck by what Shashi Tharoor once said about India: "India is not an underdeveloped country, but rather a highly developed one in an advanced state of decay."In my view, this was a very harsh judgement, but the silver lining was that it provided some food for thought. I do agree with the "highly developed" statement, and therefore with the existing quality assets. You have talent, knowledge, competence, size and momentum. And the cherry on the top- people from all around the world wish the best to India. So, I am convinced that India's future will be bright, providing that you tackle some well-identified issues, like red tape and violence against women. But trust me, India is in a sweet spot compared to many developed and developing countries, including France.
Q. I am keen to know more about you as a person - role models, hobbies and passions.
A. Like anyone, I have my passions, my hobbies, the things I love and those that I hate. The most important thing to know about me is that I believe that one has to contribute. And I'm trying to do so. The rest is too personal.