afaqs!

Does Philips have a creative agency in India?

By , agencyfaqs! | In | July 02, 2001
The June 20 deadline issued by Philips NV for moving the Philips account out of Euro RSCG is over, but Euro still has the account in India. Why?


Last week, Carat India was awarded the estimated Rs 50-crore media duties of consumer electronics giant Philips India, following a global realignment that occurred in favour of Carat International early last month. While this was indeed the cause for much jubilation at Carat India, this realignment rekindled memories of a similar realignment that Philips NV - the Amsterdam-based parent of Philips India - had announced late last year: that of its creative communication business.

It might be recalled that Philips NV had ended its association with global agency Euro RSCG, opting for DDB Needham and D'Arcy Masius Benton and Bowles. And the new alignment was supposed to have come into effect, internationally, on June 20, 2001. That is, the Philips account should have moved out of Euro RSCG India 13 days ago.

It hasn't, of course.

Six months after the June 20 deadline was issued, Euro RSCG still handles the Philips account in India. And will do so till… well, Euro shrugs its shoulders. And Philips doesn't appear very sure either.

"We are still servicing Philips, though I don't know for how long," said Suman Srivastava, director, strategic planning, India & Middle East, Euro RSCG. And he isn't offering any guesses on which agency it's moving to. Rupam Ganguly, general manager, consumer and trade marketing, Philips India, puts it a bit differently. "The account is still with Euro RSCG, and we are awaiting a directive from our headquarters to move to a DDB-affiliated agency in India."

It's common knowledge that DDB has a minority stake in Mudra Communications. And it's also common knowledge why Mudra cannot handle Philips in India - Samsung Electronics. But, of course, it's also common knowledge (though still unofficial, from Mudra's point of view) that Mudra has re-baptized its old second agency Interact Vision as Infinity (with increased equity participation from DDB), and aims to service Philips from here. So the logical thing was to ask Ganguly about Infinity.

"Does DDB have an equity participation in Infinity?" Ganguly asked pointedly. Anyway, all Ganguly had to add was that Philips India could not take any decision independently, and had to await an announcement from Amsterdam. agencyfaqs! tried its best to get in touch with Vijay Nagrare, who is reportedly heading Infinity, but despite repeated calls to Mudra's Mumbai office, Nagrare couldn't be traced.

The point here is, why is there so much indecision vis-à-vis the Philips account? Let's first look at Philips India's compulsions. Here is an estimated Rs 50-crore business that should logically be with Mudra. Now that can't be because the agency still handles rival Samsung's Rs 45-crore account. And while Infinity has been formed, the agency just doesn't have the kind of infrastructure and resources (across four metros) that could support Philips' needs. As it is, big clients are highly reluctant to go with agencies that bear the 'second agency' label.

It can be argued that Philips did move happily to Euro RSCG the last time round. True, that time, Euro RSCG too was as much a greenhorn as Infinity is today. But the difference here is that when Philips moved to Euro, it took heart from the fact that Euro was being headed by Ishan Raina, someone whom Philips had worked with previously at Contract Advertising. It's as much an issue of comfort levels. "Naturally, Philips would be very uncomfortable dealing with Infinity given its current skeleton structure," says one senior vice-president. "And the Dutch headquarters would be aware of hurting Philips India's sensibilities if it forces any decision down the throat."

There could be an easy way out for both Philips and Mudra - but that depends on, of all things, how quickly Publicis gets its act together in Delhi. It's just a matter of time before Delhi-based Whirlpool India (whose parent is aligned to Publicis globally) moves to Publicis. But Publicis has to ramp up its Delhi operations first, a pre-condition to Whirlpool's move.Incidentally, Whirlpool appears to be more than happy with current agency FCB-Ulka.

For its part, FCB-Ulka knows that Whirlpool will go, someday. And it has been trying its best to slowly get parts of the Samsung business (FCB handles Samsung in the US), without upsetting the Whirlpool applecart. In fact, FCB-Ulka's second agency, Interface, has already picked up some business from Samsung. Of course, it would help if Samsung called for a formal agency review, but unfortunately for Ulka (and Mudra, perhaps), Samsung traditionally conducts its annual review only in December.

It's really strange how some Rs 150-crore of business (from Philips, Samsung and Whirlpool put together) is somewhat in limbo, totally dependent on so many client-agency relationships and compulsions.

The issue certainly isn't going to sort itself out in a hurry. In fact, if the knowing smiles of some agency brass are any indication, there is the possibility of one more front opening up in the near future…

© 2001 agencyfaqs!