WPP-backed Equus Advertising has entered into a strategic tie-up with Pune-based agency Cygnus Advertising, with the objective of "collaborating in all areas of idea farming and communication". The alliance, which comes into effect today, does not involve any equity swap, and is based on a flat division of incomes and expenses, with a 50-50 profit-sharing pattern.
Speaking to agencyfaqs! about the tie-up, Swapan Seth, deputy CEO, Equus Advertising, said that the idea had, in fact, been mooted by Cygnus. "They approached us. Damodar Warrior, ex-creative director of HTA, Chennai, is a pillar there. So, clearly, the genes were in place. And we liked the aggression that Cygnus demonstrated."
Nandita Khaire, managing director, Cygnus Advertising, concurs. "Yes, Cygnus did initiate this alliance," she says. "We knew that Equus was eyeing opportunities in Pune. We were very clear we did not want secure ourselves with any big agency, since we wanted to retain our identity, creative freedom and agility of service. And here was Equus, turbo-charged, young and lean, looking for opportunities, and whose work has also been meaningful and good."
Pune is certainly a key element in this equation. Swapan admits that Cygnus presented an attractive alliance proposition as it had "a definitive presence and pulse of the Pune market." And there is no doubting that Equus is training its sights on the automobile businesses that the city cradles. "We believe that Pune has opportunities in terms of auto businesses, and our historical experience in that category should create sufficient opportunities," says Swapan, obviously referring to Daewoo. Of course, Swapan is pretty diplomatic when asked if Equus has any specific accounts in mind. "There is a lot going on there. But you can't hear it from Cumballa Hill. You've got to be in Koregaon," he replies.
Nandita sees obvious synergies in this alliance. "Equus has undoubted strength in the automotive sector, and otherwise. Its expertise, together with our local presence in Pune, can prove to be comfort zones for auto companies or other Pune-based corporates who look towards 'national' or 'Mumbai-based agencies'," she says. "This is the first time that an alliance between a national and a local agency has been made in Pune. Maybe it might set a trend in the city," she adds.
While Equus will benefit in terms of expanding its presence to Pune, for Cygnus the alliance signals a shortcut to success. "Growth as a small-town Pune agency is a tedious process and we want to accelerate our growth," Nandita admits. "This was the best opportunity, a synergy, whereby both parties leverage one another's strengths and value-add." Among the prominent accounts that Cygnus handles are Tasty Bite Eatables, Le Meridien Hotels and Resorts (corporate as well as the individual hotels) in Pune, Mumbai and Cochin, and Cotton King Stores.
As far as Equus is concerned, this is the second such association it has sealed in recent times. Sometime last year, the agency tied-up with Bangalore-based Renaissance, under which Equus was to provide the creative inputs, while Renaissance was to do the servicing bit. In fact, according to Swapan, the Equus-Renaissance combine have already identified prospects in Bangalore, and are "working on them".
Swapan believes that such alliances are the best way to consolidate across regions, and that this is actually better than Equus opening offices in the mini-metros. "We are not in the real estate business. We should be talking to clients not brokers. Globally, PALS (Pooling, Allying and Linking) is the way to do smart business." But these alliances certainly don't mean Equus will be looking at more such alliances in the other prominent metros such as Chennai, Ahmedabad and Calcutta. "We will look at alliances from geographical perspectives. Hyderabad makes sense. Not the other cities."
Of course, there's always the potential of problems arising from such strategic alliances - especially those without equity participation, as neither party is totally committed to the venture. Then there are issues such as work culture and conflicting business interests. So Cygnus isn't allowing itself to get carried away by the development. "The alliance is a new experience for us," Nandita exercises a note of caution. "We want to make it work. It's too early to make any wise comment on this, right now."
Swapan, of course, claims to have "a Gibranic view on these arrangements: let there be spaces in our togetherness".
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