2018 a year of mergers, account moves and shock hires and exits

For the PR business in India, 2018 has been one of the most eventful years in recent times. Not only did big-ticket mergers take place internationally with firms such as WPP merging two of their biggest PR firms, but domestically also international PR firms invested in home-grown Indian firms. 

Big PR Account Moves: Adfactors wins Tata account 

But the one story that has had a very strong domestic impact is the shifting of the Tata Group account from Edelman India to Adfactors PR. Right from the second half of 2017, the PR market began to swirl with the news that the account would shift. And In November 2017, Tata ended its contract with Rediffusion Edelman, putting the agency on notice till the end of January 2018.

As speculation mounted and most unusually for a pitch of this size, no formal request for pitches was sent out. But by January 2018, it was quite clear that Adfactors PR would bag the account. And on January 15th, 2018 it was formally announced that the biggest PR mandate in the country, estimated at Rs. 60 crores annually has gone to India’s largest firm, Adfactors PR, including the blue-chip TCS account.

This makes Adfactors PR the largest PR firm in India by far, and the only one to bill close to 200 crore rupees annually. And that too organically, without being acquired by an international PR firm. Analysts speculate that it may also become the first PR firm to, perhaps, launch an IPO.

Edelman bags Infosys account 

The other side of the story was how Edelman India would deal with the exit of their largest mandate. At that time, Rakesh Thukral, Edelman India, managing director told PRmoment India that there will be only marginal rightsizing of the teams at Edelman India and that Edelman will maintain both it's geographical and industry expertise footprint. Edelman India has since gone on to aggressively pitch for new business. In March 2018, the firm went on to win the global mandate for the prestigious Infosys account. The firm handles the work in several markets including the crucial US market as well as India, UK, Germany, France and ANZ.  Edelman also won the Arvind account, handling the PR mandate for all the group companies. 

Other account wins 

In January 2018 Ikea India, which opened its' first store in India in Hyderabad in spring this year, hired Cohn & Wolfe Six Degrees for its' PR mandate. And Avian Media bagged the prestigious Niti Aayog mandate. Adfactors PR picked up the Hershey India account and Value 360 bagged the MG Motors Account. Edelman India also picked up the high visibility Jio MAMI Film Festival with Star account. 

An interesting win by Mavcomm Consulting was EmotionAI firm Entropik Tech.

It's the season for mergers: Burson Cohn & Wolfe 

In a shock announcement on a cold February day, WPP announced the merger of two of its largest PR firms, the iconic Burson Marsteller and Cohen & Wolfe, creating a brand new entity Burson Cohn & Wolfe. 

Even as the newly formed entity of Burson Cohn & Wolfe announced region wise leadership, the leadership of a unified Genesis Burson-Marsteller and Cohn & Wolfe Six Degrees is still unclear as the latter is in the middle of an estimated 4-year earn-out after Cohn & Wolfe acquired Six Degrees in September 2015. To find out the implications of what happens during an earn-out, PRmoment India had spoken to Dev Raman, managing partner, Lastaki Partners who has advised on the Denstu-Perfect Relations merger in September 2016. While emphasising that he is not involved in any way with the Burson Cohn & Wolfe merger or with the Cohn and Wolfe acquisition of Six Degrees PR, Raman commented that “ In an earn-out what is important is who controls the fortunes of the entity. If my earn-out is now linked to an entity that is part of a combined P and L, then that becomes complicated."

While sources said that the process of merging the two firms in India has picked up momentum in the last 4 months, it could still take a while. One significant leadership change for Genesis Burson-Marsteller is the moving on of COO Atul Sharma to head Ruder Finn, interestingly no replacement has been announced for Sharma at GBM, giving rise to speculation to a new operational head from within the merged entity.

Avian WE merger 

In March 2018, close on the heels of the WPP announcement, WE Communications (WE) announced a strategic investment in  Avian Media, and its sister public affairs consultancy, Chase. While Chase retained its name, the newly merged entity of Avian and WE was named Avian WE. It was also a good year for Nitin Mantri, Group CEO of Avian WE, who was also re-elected as president, PRCAI and is also set to take over as president, ICCO in 2019 from Elise Mitchell, becoming the first Indian to head ICCO.

The PRactice's senior leadership quits 

In a surprise move, The PRactice CEO, Vivek Rana quit, necessitating a re-entry by founder Nandita Lakshmanan at the helm. Speaking candidly, Lakshmanan said, "There is naturally fear and uncertainty. Which is why Vivek and I are travelling to speak with clients and employees. The transition is on and we are good to go." Market speculation is naturally on about who would replace Rana eventually, or whether there will be strategic consolidation. 

Text 100 

In September, Text100's long-running CEO, Aedhmar Hynes stepped down after an 18-year stint leading the company. This move came ahead of a merger between Bite and Text 100. Said Hynes, "Bite and Text100 will be coming together to form a new company, with a new brand that will be led by current Bite CEO Helena Maus." 

Text100 has a presence in India as does HyperText made up of the former India Bite team. 

Such hectic consolidation of the PR business has concerned some PR professionals. 

Jessica Lee, vice president communications for Asia, Netflix told PRmoment India that, " When I read about these mergers I do feel concerned. What will happen to the special strengths and specialisations that these firms bring to their client? Once they are merged, what will they offer their clients that is different and ahead of the curve? I think that is why brands may consider going to mid-size and boutique firms who still retain their innovative edge."

PR Measurement world is all shook up 

The PR measurement world in India saw, what is unusual activity and consolidation. 

In September it was announced that the global public relations firm, Hill+Knowlton Strategies, will now partner with news monitoring and analysis services company – Impact Research & Measurement to deliver media research and monitoring services for the India market. H+K Strategies earlier monitoring wing, The Resource Center (TRC), was shut down in October 2018, with some of the staff being offered a role in Impact.

In October, Concept BIU brought out the business of Blue Bytes News rapidly scaling up its reach by onboarding the latter's 120 clients. This consolidation with Bluebytes will make Concept BIU one of the largest and most comprehensive media monitoring & analytics service provider in India.

People movements: Hires and Exits 

The year began with an exit that completely shook the marketing communication world. In April 2018 A statement released by WPP said that Sir Martin Sorrell has stepped down as chief executive officer of WPP with immediate effect. The statement went on to say that, "The previously announced investigation into an allegation of misconduct against Sir Martin has concluded. The allegation did not involve amounts that are material."

Corporate PR hires

In August 2018, Prasidha Menon quit Uber India to join OYO Rooms as head of communications, and as a member of the OYO leadership team.

Uber India, which has seen its share of frequent departures of people in the PR role, hired an award-winning journalist, Satinder Bindra as its first director-level head of communications for India and South Asia in September, signalling its' focus on communication at Uber India.

In a move from PR to marketing, in June this year, Poonam Kaul quit PepsiCo to join Apple India as its marketing director. PepsiCo then went on to hire Viraj Chauhan from Ola as their chief communication office in November 2018. In February 2018, Paresh Chaudhary moved to Adani as group president, corporate communication. Prior to joining the Adani Group, he was working as CEO of Madison Public Relations. Madhu Chhibber, in turn, took over the CEO mantle at Madison, she was previously CEO at Perfect Relations.

There was a slew of movement with Heena Kanal quitting Marico to join pharma major Cipla as corporate communication lead. Also in the early part of the year, Tushar Makkar joined Arvind as group head corporate communication. And tech veteran Vivek Padiyar joined TCS as is head of communication.

A non-corporate hire that was a first for the PR business in India was the appointment of Rachna Sharma as the chief mentoring officer by MSLGROUP India.

#MeToo hits the PR business

As the #MeToo movement truly took off in India, the PR business also saw its share of stories shared by affected professionals. As a result, Tata Motors sacked its head of communication after an investigation into charges of sexual harassment made against him. Allegations have also been made against a former founder of PR firms in India. 

The Paytm crisis

The last quarter of the year has also seen one of the most sensational stories to hit the PR business. In late October, Paytm's head of communication was taken into police custody by the Noida Police for alleged extortion. Interestingly as soon as the development took place Paytm took down its media engagement page. It also did a bit of a flip-flop in their statements.

Soon after the news of the arrest broke, Paytm issued a statement saying they support their colleagues in this matter. However, today a revised statement has been issued saying, "This is a case of personal data theft of Vijay Shekhar Sharma, where three arrests were made yesterday. Paytm would like to reiterate that all our consumer data is protected with the highest & most impenetrable levels of security. At this point, the law enforcement authorities are investigating this matter and we would like to respect the police investigation, and not comment further until the results of such investigation are known."

The arrests came less than two months after Berkshire Hathaway Inc picked up a stake for 300 million US dollars in One97 Communication Ltd the parent company of Paytm, making it Berkshire's first investment in India.

What does 2019 look like 

One of the biggest emerging stories of 2019 will be CEOs and their growing influence in India on brand perception. As the Jack Dorsey fiasco demonstrated, a CEO has to be extra careful in today's superheated social media environment. PR practitioners will be called upon to not only help the CEO craft their messaging but also provide inputs on soft skills. How to speak, dress and express their personality in tandem with that of the brand.

It is an election year in 2019, which will offer fresh challenges to the PR business to both get new business as companies hedge their bets till the results; well as take advantage of the political PR opportunities available. A general election in India acts like an economic stimulus package for the economy unleashing work opportunities across the board. 

There has been considerable consolidation in the PR market at the PR consultancy level and the upcoming mergers could affect jobs in the market while offering opportunities for raising the bar for work.

Retainers remain a challenge for PR firms, more value-driven work, and client advocacy will help partly to solve this problem. But PR practitioners admit that this will not be solved in a hurry.

Yet, there is no better time to be in PR as its role expands to become the nerve center of a business.

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