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Equus becomes part of Red Cell's 'challenger' network

By , agencyfaqs! | In | March 27, 2002
Red Cell, the fourth global network of WPP, has entered India by picking up a stake in WPP-group agency Equus Advertising


WPP-group agency Equus Advertising has formally become a part of the Red Cell global network, following a formal announcement to the effect by both parties yesterday. The announcement signals the fruition of a process that had been set in motion - and one that had been widely speculated upon in the media - more than six months ago. The most immediate and ostensible outcome of the deal is that Equus will henceforth bear the nomenclature, Equus Red Cell.

Commenting upon the development, Swapan Seth, deputy CEO, Equus Red Cell, told agencyfaqs!, "The talk of our alignment with Red Cell has been on for a very long time, but most of it was in the realm of speculation and hypothesis. It is only now that Equus is a Red Cell company in India."

The billion-dollar Red Cell is the fourth global network of Sir Martin Sorrel-owned WPP (the other three networks being J. Walter Thompson, Ogilvy & Mather and Young & Rubicam), and currently has a presence in more than 20 countries worldwide. Creative outfits such as Berlin & Cameron of the US and Singapore's Batey Advertising are part of the Red Cell network. Red Cell's client roster includes such names as Aventis, Singapore Airlines, Coca-Cola (mineral water brand Dasani) and Alfa Romeo. Red Cell also works closely with Nestle on select assignments.

Incidentally, pre-Red Cell, WPP had a 33-per cent stake in Equus Advertising. When asked how the Red Cell alignment would alter the equity participation, Seth replied, "We have not discussed the shareholding pattern. And there are lots of FIPB regulations that need to be looked into before anything concrete is hammered out. We have left that bit to accountants."

Seth, however, is quick to point out that Red Cell picking up a stake in Equus isn't strictly about 'equity'. "From Red Cell's point of view, it's not about acquisition but partnership," he says. "It is all about aggregation of talent and not aggregation of brick-and-mortar. That's the way Red Cell functions the world over. It allows strong, independent agencies to flower."

Quizzed on why Red Cell chose to partner Equus, Seth answered, "In Equus, Red Cell saw an advantage… not a business to acquire. We might be small, but we pack a lot of punch. To quote Mr Lee Daley (co-CEO and chief strategist officer, Red Cell), 'It is the sharpness of the nail and not the size of the hammer that matters. It's the scale of talent and not the scale of size…' And Equus' challenger profile suits the Red Cell profile."

Red Cell is, incidentally, positioned as a 'challenger brand agency network'. Seth, however, clarifies that this does not imply that Red Cell - or its affiliate agencies - work only with the No. 2 and No. 3 brands in any market or category. "The way Red Cell sees it, 'challenger' is not about market status. It's about a mentality. For instance, even a market leader might want to constantly challenge itself in a bid to raise the bar. This is a mentality, and this is the sort of client that Red Cell would love to have."

Now that it is part of the Red Cell network, there are clear benefits for Equus. The first pertains to access to global best practices; the second to aligned businesses. "Crosspollination of knowledge and insights is bound to happen, and this will be of immense value to us," Seth admits. "We are expecting a lot in terms of learnings." Seth, however, doesn't think that businesses will fall into Equus' lap merely on account of alignment. "Yes, there may be instances where we will benefit from globally-aligned accounts, but the interesting thing about the Red Cell network is that unlike most networks which are about inheritance, Red Cell is about earning business. Which, in many ways, has been the ethos at Equus from the very beginning." © 2002 agencyfaqs!