According to Jaideep Shergill, co-founder, Pitchfork Partners, “Promoters have recovered 70 to 80 % of their earn-out, which is in line with global standards for such deals.”
India vs. China acquisitions in PR
In the global PR market, India is not a priority market. The number of acquisitions has not started yet. However, China has been four times the number as compared to India. India is a very small market, it is a small contributor. International agencies have hardly invested in India.
Next phase of PR firm acquisition and mergers :
The initial phase of acquisition started in 2005 was with firms at the 20 crore level. The next level of acquisition is likely to start with firms who are currently at the 20 crore level.
It is an amount of time when PR firms such as Omnicom’s Fleishman Hillard and Ketchum, which have already started merging in other markets could see the same trend in India as well.
Nitin Mantri, managing director of the recently formed Avian WE believes that
India will escalate to some great independent firms, which will attract big groups and surge their appetite for consolidation. Firms will look to acquire capabilities in new areas like digital, analytics, public affairs, media planning, and research to improve scale and ensure synergistic integration of services.
Existing PR firms also need to get their growth plans right. Because there will be a decent amount of investment made in new-age tools like data-analytics, experiential marketing along rural marketing.
Omnicom-Publicis Merger Creates World's Largest PR Holding Company:
The merger of international marketing services companies Omnicom and Publicis Groupe—expected to be formally announced later today— will create the largest holding of public relations businesses in the world, bringing together a roster that includes global brands including FleishmanHillard, Ketchum, MSLGroup, and Porter Novelli, with a combined fee income in excess of $1.82 billion, based on numbers published as part of our Holmes Report 250 global ranking. That’s enough for the merged business to overtake WPP, which reported public relations and public affairs fees of $1.49 billion for 2012.
Other agencies in the Omnicom fold include cause branding and corporate responsibility specialist Cone and lifestyle and healthcare public relations firm Marina Maher Communications.
Top 5 Biggest Agencies In The World:
WPP is the world’s largest communications services group with 3,000 offices in 111 countries and employing over 170,000 people. The company has won many awards.
In 2012, it was named Holding Company of the Year at the Cannes Lions International Festival of Creativity. It won that award again this year for the fifth consecutive year. Also this year, Martin Sorrell, the company’s founder, ranked No. 5 in the Harvard Business Review’s Best-Performing CEOs
As of this year, Omnicom has over 70,000 employees and revenue of more than $15 billion a year. Omnicom acts as a parent company of parent companies, who in turn oversee more than 1,500 smaller agencies.
Publicis Group has around 75,000 employees in its vast network of agencies as well as strategic partnerships with other major ad groups and annual revenue of more than $9 billion.
Edelman and Finn Partners
For the last three decades, Edelman and Finn Partners focused in the industrial and trade sectors, resulting in a unique perspective and ability to help clients accelerate growth and strengthen their brands
Interpublic Group has around 55,000 employees and a revenue of around $7.5 billion.IPG has focused on media agencies, integrated and trained teams on how to use the data, and retooled some of its leadership positions. The holding company is currently working to build out new data-powered products and introduce those later this year.
Dentsu has dozens of companies both in and outside of Japan with more than 62,000 employees and revenue of over $6 billion
The Struggles and Successes that the Big Five Share
So how do big agencies run? And why are some agencies successful to the point of multi-billion-dollar profits, like the ones we’ve talked about above? Well, the answer is quite simple: merge, acquire, merge, acquire. None of the biggest agencies are really agencies at all, but networks that control many smaller niche companies that can deliver specific work to clients.