afaqs!

Leo Burnett plans to acquire a digital agency in India

By Anushree Bhattacharyya , afaqs!, New Delhi | In Advertising | February 11, 2011
In the first half of 2011, the agency plans to acquire an Indian digital company, and then a shopper-marketing solutions company.

For Leo Burnett, telecom and related new areas, digital and shopper-marketing will soon drive its businesses across the Asia-Pacific region as well as in India. The agency will acquire an Indian digital company in the first half of 2011, and a shopper-marketing solutions company in the second half of the year.

Speaking to afaqs!, Jarek Ziebinski, president, Asia-Pacific, Leo Burnett, says, "Digital and shopper-marketing are the two pillars of our growth and the two core competencies into which we will continue investing because we believe that our clients and brands will be utilising both these mediums."

He adds, "Just to illustrate how we are going to do this, in 2010, we hired two regional leaders -- Neil Hudspeth, who is head of digital for Asia Pacific region, and Christopher Lyons, the regional head for shopper marketing."

The agency claims that in 2010, its digital revenues went up by 20 per cent, while the revenues from shopper-marketing increased by 15 per cent. The agency has recently bagged the shoe retailer brand, Tashi from the house of Tata in India.

As for telecom, Arvind Sharma, chairman, Indian Sub-continent, Leo Burnett, explains, "Telecom will continue to be a growing opportunity. We have a client in service provider, a client in cell phone hardware, and now we would like to have a client in cell phone retailing. In addition, we would like to tap new businesses as new areas emerge in telecom. We have invested in understanding the telecom category over the years, and we would like to leverage that as a business opportunity."

However, the agency is not looking at expanding its presence beyond Delhi and Mumbai in the country, as it believes that these two markets will drive growth in the future. According to Sharma, "Our focus will continue to be Mumbai and Delhi, as more than 70 per cent of our businesses come from the two cities."

While India is a key market for Leo Burnett in Asia, markets such as Japan, China and Australia is from where the bulk of the business comes. For Ziebinski, apart from these well-established markets, Thailand and Indonesia in the Asia-Pacific region have the potential to be high-growth markets in the future.

The agency claims that over the last two years, it has clocked high-growth rates in all its markets, a trend that will continue.
Ziebinski explains, "Last year, we registered a growth of 11 per cent in revenue. While India recorded a growth of 38 per cent, Singapore registered 65 per cent increase in revenue and Australia 20 per cent. Each and every market in the Asia-Pacific region registered healthy growth in 2010. Moving ahead, in 2012, we are expecting double-digit growth."

According to Ziebinski, Leo Burnett has selected its focus areas for the long run, and the agency is now working towards developing these three pillars.

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