Financial Daily from THE HINDU group of publications
Friday, Mar 08, 2002
DY&R group plans healthcare communications co in India
MUMBAI, March 7
SUDLER Hennessey, a DY&R group company, is about to make an entry into the Indian market as a healthcare communications and marketing company.
As mainstream advertising takes a backseat in terms of growth, new healthcare advertising accounts should give a respite to most agencies. While most ad agencies have already floated separate divisions to take care of the emerging healthcare business in the country, Rediffusion DY&R is actually bringing in a sister agency by floating a new company.
But considering DY&R was acquired by WPP sometime ago indirectly, it is another WPP company which is to be floated. Recently, Mindshare, the media-buying outfit from the WPP group, also made its entry.
According to Mr Debadatta Sen, Senior Vice-President, Rediffusion DY&R, "There will be a separate company floated from the DY&R group to take care of the healthcare business. Since most Indian pharma companies continue to outsource their marketing services, we feel there is a genuine need which can be fulfilled. The purpose is to offer specialised knowledge-based expertise in this area."
The imminent entry of this new healthcare company should see it pitching for independent business from the pharma industry. Adds Mr Sen, "Once new policies are formed and price controls are removed, pharma companies will get competitive and engage in promotional efforts". While Rediffusion DY&R in India has presently just one pharma account (Novartis), Sudler Hennessey would possibly look at getting business from its existing international clients in India.
Making long-term investments in new areas is what most agencies are doing in recessionary times. Mr Sen says, "After all you have to guard your revenues by looking at streams from other sources."
The Rs 500-crore Rediffusion DY&R has already floated separate divisions for direct marketing (WCJ), media buying (Media Edge) and public relations. Besides, a few years ago it also bought an Indian ad agency (Everest Advertising) to add to its billings turnover. However, the biggest boost to its business happened when the Tata Group decided to appoint Media Edge as its media-buying agency last year.
Although the agency already has Tata's advertising account for brands such as Tetley, Telco's commercial vehicles and the Taj Group, it expects more business from the group.
However, Rediffusion DY&R predicts a bad year ahead. "This year the signals are still down and most agencies will record growth rates below 5 per cent. There will be no organic growth ," adds Mr Sen. In this situation, floating a new healthcare marketing company should hopefully serve as an alternate revenue stream to beef up the bottomline of the DY&R group in India.
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