Publicis Groupe’s global acquisition of Sapient in a USD 3.7 billion all-cash deal witnessed its fair share of news frenzy in India. Through this deal, Publicis seeks to leverage Sapient’s large manufacturing backend in India, which is expected to boost revenues for both companies.
Publicis is committed to augment its digital offer in India, and acquisitions has been a key part of this strategy. The holding company has added the likes of Beehive Communication, iStrat, MarketGate apart from Indigo, Resultrix and others such in its fold in India in the recent past. Even traditional buys such as BBH at a global level or Law & Kenneth in India were some steps to add to digital capabilities in a fast growth market like India. While the Sapient acquisition, described as “transformative” and “crown jewel” by Publicis Groupe Chief Maurice Levy, will have a global impact on Publicis Groupe, what will the move mean in India?
A good buy
In addition to its digital acquisitions and digital businesses from its operating companies that includes the likes of Starcom MediaVest Group, ZenithOptimedia, Leo Burnett, Publicis Worldwide and Saatchi & Saatchi, Publicis also has its digital only brands such as Razorfish in India. After multiple levels of rebranding to become Razorfish, the agency also saw change in leadership last month with the appointment of Charulata Ravi Kumar. Sapient in India continues to be more of a technology centre than a digital creative agency set up.
The first impression of the deal begs the question – as Publicis Groupe struggles to make its digital only assets work in the market, will Sapient play a role in achieving its digital goals?
Industry experts in India believe that it will play a significant role.
According to Vineet Gupta, Managing Partner at 22 feet Tribal Worldwide, the Sapient acquisition in line with Publicis’ larger market strategy, that should resonate with clients in near term at least.
“If the company continues to perform the way it is performing, clients will see this acquisition as an added benefit as Sapient will add its digital knowledge to the existing expertise of Publicis,” added Harshil Karia, Founder of Foxymoron in India.
Despite the steep pricing of the deal, digital marketers in India have given a thumbs-up to the Publicis-Sapient partnership in India. “This acquisition gives Publicis access to fantastic talent and methodologies that will only play a very positive role in its growth,” said Raghu Seelamsetty, Managing Director at Sizmek – India and MENA.
One of the key areas to watch out for will be the cultural adaption of the traditionally US based Sapient to the
France-based Publicis Groupe family. This takeover marks the beginning of revamp of Sapient which has been an independently run ad agency for over two decades.
But it has its due share of benefits too, according to Arnab Mitra, Managing Direct and Co-Founder of LIQVD Asia. “Global clients of Sapient with cross-country presence are expected to benefit the most as Publicis will ensure that there is immense knowledge sharing established across the offices,” he said.
It will be interesting to see whether Sapient is able to add value to Publicis Groupe companies as part of the larger holding company and if Publicis’ global scale and capabilities bring more value to Sapient’s clients. “This will provide access to new thinking and capabilities and help cement the relationship that Sapient has with its clients, “added Mr Seelamsetty.
Way ahead for Publicis Groupe
After the fallout of Omnicon Media Group earlier this year, acquisition of Sapient is expected to place Publicis at a better position against its rivals such as WPP, Interpublic and other specialists in India.
“With Sapient’s skill-sets and if rightly used, I feel Publicis will be better off than WPP in many ways. Sapient is a very strong player in its key services and with its newly acquired global reach and talent pool it is only natural that they add newer dimensions to the Publicis Groupe offerings,” concluded Mr Mitra.