Madison buys 51 per cent stake in MediaCom; retains P&G

The Madison-MediaCom combine will jointly handle the media buying and planning for Procter & Gamble in India

FMCG giant Procter & Gamble, which had called for a media pitch amongst its roster agencies last year (as reported by agencyfaqs! on November 29, 2007), has finally arrived at a verdict.

As is known, the review was amongst P&G’s existing media agencies in India – Starcom, Madison Media and GroupM’s MediaCom (Madison was in charge of media buying for the MNC giant, while the planning function was divided between MediaCom and Starcom). Carat, also on the global P&G roster, reportedly participated in the pitch as well.

Madison Media and MediaCom pitched jointly for the business, and won both the media planning and buying duties for P&G in India. As a result, Starcom is no longer on the P&G roster. It is learnt through sources that Starcom wasn’t in favour of the business being shared between agencies and wanted it consolidated with itself. This ‘all or nothing’ mode didn’t go down too well with P&G.

However, when contacted, Ravi Kiran, chief executive officer, Starcom MediaVest Group, South Asia, neither confirmed nor denied this stance, but refused to comment on it altogether.

Sumeet Vohra, marketing director, P&G India, was discreet when asked about the deal: “We have had an excellent relationship with Starcom and we thank them for their contribution to the P&G business over the years. However, the Madison-MediaCom combine came up with a strong vision and some great ideas and we would like to partner with them to make them reality.”

What’s more, Madison has purchased a 51 per cent stake in MediaCom (WPP continues to own the remaining 49 per cent), and the Madison-MediaCom combine will now be in charge of P&G in India. MediaCom India, whilst operating independently, will now become a part of Madison World, with buying support extended by Madison Media. This is a big move for Madison, which is in its 20th year of existence.

Sam Balsara, chairman and managing director (and principal shareholder) of the Madison World companies, will be the chairman of MediaCom India, and Divya Gururaj will continue in her role as managing director of MediaCom India. MediaCom will report to Balsara. GroupM will not be involved in managing the company.

P&G’s ad spends are estimated to be around Rs 120-130 crore.

A section of the media had speculated that if the Madison-MediaCom combine won the P&G business, P&G’s arch rival, Hindustan Unilever (whose media is handled by GroupM’s MindShare Fulcrum), would be annoyed no end. Now that MediaCom no longer has the GroupM connection, Vikram Sakhuja, chief operating officer, GroupM, South Asia, informs agencyfaqs! that HUL should have no problems with this development. “Those reports were entirely speculative in the first place,” he says.

Vohra of P&G, too, is of the view that there isn’t a remote chance of a conflict. “MediaCom is P&G’s global roster agency as well as a partner in India on some categories,” he says. “We are confident that all appropriate measures have been and will continue to be taken to safeguard P&G’s interests.”

Vohra concludes that the Madison-MediaCom combine was selected based on the results of an evaluation process that P&G follows globally for such pitches.