"rmg seemed the best thing to do": Rajiv Agarwal

Getting the brilliantly networked, clued-on-industry-gossip ad fraternity to blink isn't easy. Getting it to blink twice in succession, that much harder.

For managing both, Rajiv Agarwal can take a bow.

Last month, when Agarwal (currently managing director, Enterprise Nexus) announced that he was clearing his desk at Enterprise - where he holds a sizeable equity stake - the Indian advertising industry drew a sharp breath. People, generally, are not expected to quit their own companies.

However, once the news sank in, speculation and Chinese whispers took to the air. While talk of his motives for leaving Enterprise usually centered at a souring of relations with partner-and-friend Mohammed Khan (chairman, Enterprise Nexus), speculation over Agarwal's next move invariably concluded - with an air of inevitability - on how he would be floating a new agency.

Then, last week, Agarwal pulled a second rabbit out of the hat by announcing that he was joining WPP-owned rmg david as national chief. Since then, a bewildered industry has been trying to make some sense out of the whole affair.

Agarwal took time out to speak to agencyfaqs! about the entire episode - and quell all those rumours doing the rounds. "My leaving Enterprise has nothing to do with Mohammed," Agarwal insists. "Even today, I consider Mohammed a friend, and he considers me as one. I am happy he gave me the phenomenal opportunity of working with him, when I was a wet-behind-the-ears boy of 27. And if at all two people cannot hit it off, I'm sure it shouldn't take them 19 years to realize that things are not working."

Khan and Agarwal do go back a long way. The two had set up Enterprise back in 1983, when Khan quit Contract Advertising, and Agarwal quit Rediffusion. But then, just two years later, the two parted ways, and Agarwal launched Nexus Advertising. "Nexus happened because I felt the need to spread my wings - that's all," says Agarwal.

That Nexus was not the product of any ill feeling between Agarwal and Khan was borne out when, in 1997, Enterprise and Nexus-Equity (Nexus Advertising had subsequently merged with Equity in the early 90s to become Nexus-Equity) became a single entity, with foreign equity participation from the London-based Lowe Group.

Talking about the merger from Nexus' point of view, Agarwal says, "Nexus had been doing excellent work for Raymond, Ericcson, Iodex, Indian Airlines… and was quite profitable. But by 1995, I felt that we couldn't operate solo for much longer, especially looking at the way the market was going. I felt we needed foreign participation. Also, around that time, I was tiring of the burden of management. So when Mohammed suggested we merge (Enterprise had by then struck the deal with Lowe), I agreed. There were obvious synergies. From Nexus there was Arun (Kale), Sandeep (Kumar) and I. From Enterprise there was Mohammed, Andy (Anand Halve) and Raghu (M. Raghunath). Overnight we would have a great team, and both (Enterprise and Nexus) would gain size and become MNC agencies."

A great team it was, but one that slowly came apart. While Raghunath sadly passed away, Halve and Kale quit the agency - for whatever reasons. (Halve subsequently partnered Kiran Khalap and C. Gangadharan to set up chlorophyll.) To make matters worse, the agency's growth rate slowly started declining. And even the standard of the creative product became inconsistent - though the good work was truly spectacular (The Times of India and Gati being two good examples).

Agarwal makes it clear that growth - or the lack of it - has no bearing on his decision, although he admits that revenue has been stagnating. "We've been growing in terms of billing, and we've even been picking up new business," he says. So what went wrong? "I feel we didn't quite manage the process of merging the two agencies. People issues… Five years ago, we were a 400-strong agency. Today, we are less than 200. I think in all this, we lost focus. Simply put, I stopped enjoying coming to work. Growth, fun environment, people… none of this was happening." But this is not to suggest that it's time to write Enterprise off. "In the short- to medium-term, I see Enterprise's prospects as being quite bright," Agarwal is adamant.

One rumour that Agarwal scotches pertains to how Raymond is all set to move to rmg david. "Three things… When I joined rmg, I told Ranjan (Kapur) that I alone am coming on board from Enterprise. No people, no businesses come with me. Also, I haven't worked on Raymond for over a year. And this business is not about an individual, but a full team that includes the print production guy. Honestly, Raymond would be foolish to come with me. People think there was something up my sleeve when I quit. In reality, there was nothing."

Not even the thought of doing another start-up? After all, that's what everyone expected of him. "Given the industry scenario and the economic environment, everything is against setting up an agency," Agarwal reasons. "The core of this business is account management and creative, and this is not easy for a start-up… hiring talent, running around for accreditation, picking up businesses from scratch."

Agarwal admits that one option he had was buying out a small agency that had everything in place. "But when Piyush (Pandey) and Ranjan talked to me about rmg, it seemed the best thing to do. It has a great team, is strong on creative and account management and has great brands. rmg is all teeth. Also, I'll be owning a substantial stake in the company. Plus Piyush and Ranjan are old friends, and we share the same worldview. I think rmg has a future."

So what if it's a second agency - in a country where second agencies have had a dismal track record (barring Contract). "History needs to be re-written," says Agarwal, but quickly adds, "But I think rmg should not be judged in relation to O&M, but as an independent outfit. I would like rmg, by itself, to be a success story. In the process, if someone says here's another successful second agency, so be it."

Specific to his mandate, Agarwal says, "I have no agenda other than rolling up my sleeves and putting a shoulder to the wheel. rmg has to be institutionalized, whereby its reputation builds over time. That apart, growing the topline, watching costs, making money for the shareholders and doing great work… That's what advertising is all about. And that's the only mantra I have for rmg."

© 2002 agencyfaqs!