WPP acquires majority stake in digital agency Quasar

By , agencyfaqs!, New Delhi | In Digital | November 20, 2007
The communications giant has acquired 75 per cent in the digital agency for an undisclosed amount

WPP, the

second largest marketing communications group in the world, has acquired a majority stake of 75 per cent in New Delhi based digital agency Quasar Media. The investment, the amount of which has not been disclosed, has been made by WPP Digital, the digital investment arm of the group. Quasar was formed in 2005 as part of the incubation programme at Smile Interactive Technologies Group (SITG), which provides promising start-ups with investment and mentoring.

Despite WPP now holding majority stake, Quasar's chief business officer and co-founder Manish Vij says that the operations and management of the agency will remain as before and that the agency will retain its identity.

Manish Vij

Mark Read

Harish Bahl
In a telecom from London, Mark Read, the CEO of WPP Digital, told agencyfaqs!, "We will manage the business as local partners, but Quasar will run the operations." Read added that WPP will have representation on the board, but that it will be "business as usual" for Quasar. Read added that he expected digital advertising to triple in the next three years, reaching $560 million (Rs 2,200 crore) (inclusive of search and display and classified) by 2009.

This deal marks the first major investment by a global ad network in an independent digital agency in India. WPP has eight group companies in India, many of which provide digital marketing services: MindShare Interaction of GroupM, rmg connect of HTA, Neo@Ogilvy of O&M and, recently, 1010, the digital agency of 141 Sercon.

The official statement released by both companies does not reveal whether the businesses of WPP's existing digital agencies will be aligned with those of Quasar.

However, Harish Bahl, co-founder and CEO of SITG, says, "WPP has a lot of digital agencies which are primarily traditional, but we are not going to be a small part of some traditional agency. We are free to choose our clients." Bahl adds that since WPP Digital is not an agency but an investment arm, it will not play an operational role in Quasar, but there will be "sharing of technology, best practices and research material".

On the possible competition between Quasar and WPP's digital agencies in India, Read said, "We are looking for more opportunities for cooperation rather than competition. It will also give Quasar an opportunity to work with WPP's clients."

Quasar's clients include Microsoft, MakeMyTrip, Zapak, Aviva, LG, GM, Kingfisher and Motorola. Bahl reveals that some digital services may be outsourced to Quasar from within the WPP Group. This could significantly expand Quasar's access to WPP's impressive list of clients in India, which include Pepsi, Nokia, Hindustan Unilever Ltd, Lenovo and Cadbury.

The investment also opens up avenues for Quasar's global expansion plans, as the agency will now have access to WPP's global customers. Quasar is particularly looking forward to expanding in the Asia Pacific region, in cities like Singapore and Hong Kong. Vij adds that Quasar plans to work with WPP Digital's network of companies outside India and to become a "global outsourcing centre of excellence".

WPP Digital was formed in February this year to identify investment opportunities in digital advertising. WPP's recent investments include its acquisition of US-based digital agency Schematic and a 2.5 per cent stake in mobile search and advertising company JumpTap, also in the US. In response to whether WPP Digital was looking for investments in the mobile space in India, Read said, "We have been disappointed with the growth in mobile advertising in India. It is not something we are immediately looking at."

© 2007 agencyfaqs!