Bates looks at acquisitions to expand services

By , agencyfaqs! | In Advertising | March 17, 2005
Bates is scouting for potential partners for setting up its Internet professional services firm, XM

Top-notch executives of Bates Asia are in the country to attend the Bates Asia Group regional conference, which the Indian office is hosting for the first time at Agra.

Besides the conference and sight-seeing, what is also keeping the Asia heads busy is shopping. Not souvenirs for relatives, but companies. Expanding the services of Bates India is now a top priority for the group and to that end, Bates is scouting for potential partners for setting up its Internet professional services firm, XM.

Combining innovative solutions with cutting edge technology, a clear marketing strategy and customer focus outlines the scope XM. Ken Mandel, CEO/regional director, XM Asia Pacific, is currently in talks for acquisition with suitable partners.

Mandel is aiming end-2005 to start operations, though it could take longer. The entity may or may not bear the name XM as the ownership pattern is likely to determine that. "Though XM is wholly owned by the Bates group, depending of our Indian partners, there may be ownership compromises," speculates Mandel.

According to Mandel, the rapid growth of India's Internet population is creating a suitable environment for digital marketing services. "Today, the Internet population is 52 million. Last year it was 39 million. As is evident from the figures, the rate of growth is quite good. And better, many people are affluent. And that gives us direct access to people with money," explains Mandel.

Stressing on the increasing awareness of XM's services, Matthew Godfrey, CEO, Bates Asia, says, "XM contributes 10 per cent of our total revenue. And, in five years that figure is going to increase to 20-25 per cent." In fact, Mandel considers Internet technology as the fourth 'P' in marketing mix.

Besides servicing the clients in India, XM India is being also viewed as a global outsourcing centre for clients in Asia such as Japan and Korea, who are looking for competitive pricing.

Bringing XM in India is part of Bates India's strategy to strengthen its offerings to clients. With this strategy in mind, Bates India is confident of making it to the top 10 agencies by 2006. "In China we are among the top 5. In India though we are not there yet, but we are committed to making Bates India a competitive force," says a confident Jeffrey Yu, president, Bates 141, Asia.

Having a complete portfolio of services is essential to fulfill this aspiration. "We have 141 Worldwide in India, which is doing extremely well. Then, there would be XM soon, field marketing is another function under 141 that should get active in India in the coming years. Thus, having a complete bouquet of services under the same roof, indeed, gives the agency an edge," states Godfrey.

Broadening the scope of Bates' offerings through acquisitions is one step towards improving the agency's position in India. "It is not just a question of organic growth, business pitches, and acquisitions. It is a combination of all three that will catapult us to the top 10. Now being in the top 10, to my mind, is not a tall order. But being in the top 3 is. Because the three agencies are way ahead in size. For the rest in the top 10, the gaps are not too wide," points out Subhash Kamath, CEO, Bates India.

Above all, Kamath feels that it is the people who drive and determine the success of an agency. "The culture at Bates is people-oriented. Fun is the operative word here that best describes the attitude of the agency. And, we are not attracting talent for reasons such as money or good clients, but because our employees identity with our vision. We are passionate about our work.."

"And that's precisely the reason why we have you on board Subhash. Hi, Handsome!," quips Godfrey.

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