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Indian PR firms come of age
By
Raju Bist
MUMBAI - The story, probably
apocryphal, is often retold in business circles. An
uneducated but loyal employee had risen through the
ranks at an Indian family-owned rayon firm. When the
company decided to diversify in a big way, everybody
wondered where the family faithful could best be placed;
he did not have adequate managerial skills.
"Don't worry," declared the family patriarch,
"let's start a public relations division for him."
PR has come a long way since then, and the
activity now is an integral part of any company's
business focus. Business management courses lay special
emphasis on PR. And many of those companies that already
have PR divisions also seek the help of external PR
agencies, and Indian PR firms are currently at the
epicenter of much merger and acquisition activity.
"PR has come of age in India. It has come a long
way from the mom and pop shops that were all we had, as
recently as in the eighties," says former journalist
Dilip Cherian, who is now a consulting partner at the
New Delhi-based Perfect Relations.
According to
Rita Bhimani, who has written a book on the evolution of
PR in India, Face Up, companies are now taking a
planned, pragmatic approach to PR and that the most
public face of the activity continues to remain a
company's interaction with the media. But companies are
now also ensuring that through their PR exercises, other
constituencies are also kept within the information
loop.
This includes keeping employees informed
about the plans of the companies. Shareholders are
communicated with on a regular basis to build
confidence. The stock exchanges are kept in the picture
about every financial, production-oriented and other
moves that the companies are making. Finally, dealers
and customers receive information from and are more
closely involved with the company.
"Powerful
global economic and political forces, significant
changes in the way we communicate and despite the
vanishing boundaries, the fundamentally fragmented
nature of the world's consumers and communities are all
defining the boundaries of PR. The growing importance of
PR across the globe and certainly in India, will be
rapid and is inevitable," predicts Cherian.
Which is why many foreign firms are making a
beeline for India, some through tie-ups with local firms
and others through their stand-alone presence. Thus, the
GCI Group/Apco Worldwide has a tie-up with Integral PR.
Weber Shandwick Worldwide has taken a 40 percent stake
in Corporate Voice. Porter Novelli has collaborated with
Horizons PT, a part of Mudra Communications advertising
agency, which in turn is owned by Reliance Industries,
India's largest private sector company. Hill and
Knowlton has an equity interest in IPAN, a division of
India's largest advertising agency, Hindustan Thomson
& Associates (HTA).
On the other hand, Text
100 Public Relations and Incepta (Citigate) have 100
percent subsidiaries in India. That is possible because,
unlike in print media, there are no restrictions on the
amount of equity a foreign company can hold in an Indian
PR firm.
What exactly are the reasons why
foreigners are attracted to the Indian market? "The
opening up of the Indian economy, the rise of the stock
markets, the advent of young entrepreneurs, all have
added to the demand for PR professionals," says veteran
PR practitioner H N Nagaraju, who has been running his
Mumbai-based firm Via Media for the past nine years.
"India, along with China, is the biggest emerging
market," adds Zacharia ("Call me Zach") James, general
manager, Text 100 Public Relations, which specializes in
handling PR for high technology companies such as
Microsoft, Cisco, AMD and Motorola out of its head
office in the south Indian city of Bangalore.
The Indian market now offers huge potential for
the PR industry. As international companies look for
newer markets, the Indian market, with about 35 percent
growth rate, is ideal to do business in. Foreign
agencies know this, and also that they can add value by
bringing in their methodologies, systems and processes
for measurement.
When these attributes are
combined with "local knowledge and understanding of
cultural and other sensitivities, strengths that an
Indian PR agency can bring to the table", as Shiv Reddy,
chief executive, Corporate Voice Weber Shandwick Pvt
Ltd, puts it, the result is a winning combination. His
joint venture boasts of some top-notch clients,
including LG Electronics, McDonalds, CNBC, KLM/Northwest
and the Australian Tourist Council.
With a
population of over one billion, which includes the
largest scientific community in the world, skilled
manpower and a high standard of English, India will
continue to remain a potential gold mine. Apart from
tapping the local market potential, foreigners are also
looking to tap potential Indian businesses that are
going international.
N S Rajan, managing
director, Sampark Communications, cites three more
reasons for the interest: a maturity of the Indian PR
market; increasing credibility of PR as a communications
tool and spiraling media costs leading to a growing
demand for below the line activities such as PR.
Rajan and his Sampark best illustrate the
strides that Indian PR has taken in recent times, and
how a focused approach to the business can help not only
companies but also PR professionals make a mark for
themselves.
For many years, Rajan worked out of
a nondescript desk in a corner of a large hall at the
Essar Group, a large steel and oil conglomerate. In
1994, he floated Sampark (Contact in Hindi) with two
other employees. Today, the firm is growing at 40
percent annually and has 45 employees and its own
offices in nine cities. It has appointed retainers in
five more cities and hires professionals on a freelance
basis in 15 other. Another route to faster growth is
acquisitions, and Rajan is scouting around for agencies
with billings in the region of Rs 10 million
(US$206,000). Even Perfect Relation's Cherian is keen to
gobble up a Rs 30 million agency.
Rajan explains
the need for a large network, " Today, as a result of
increasing competition, clients are forced to increase
their market penetration. They, in turn, prefer dealing
with PR firms that have a large infrastructure and a
presence in as many Indian cities as possible."
Sampark has been approached by foreign agencies
seeking an Indian partner, but Rajan says that he is not
interested in "just selling off to any gora
[white man]." The deal, if and when it happens, should
add value to Sampark's activities, maybe by making it
easier to tap clients abroad, insists Rajan. Also, he
would like to make sure that there is a Chinese arm's
distance between the foreign firm's advertising and PR
divisions. "The foreigner should be committed to us, to
the Indian market place and to the process. We are
looking for a marriage, not just a courtship."
Perhaps Rajan is wary after the spate of recent
break-ups between foreign and Indian PR firms. Brodeur
Worldwide has split from Genesis PR. But the most
celebrated divorce was at B-MRP Communications, a joint
venture with 51 percent stake held by Roger Pereira
Communications (RP) and 49 percent by Burson-Marsteller
(B-M). Adman-turned-PR professional Roger Pereira is
credited with floating the first Indian-foreign
partnership in the Indian PR industry. B-MRP made a name
for itself in reputation and perception management.
"We have decided to operate independently
because in India and abroad we handle conflicting
clients," Pereira told the press through a release after
the break-up, adding that he would be acquiring the 49
percent stake held by B-M in the joint venture. But
according to media watchers, the two partners decided to
go their own way because they could no longer agree on
business strategies and the future direction that the
company should take.
While many PR industry
players were shocked on hearing the news of the B-MRP
divorce, Nagaraju says that it only points to the
maturity of PR as an industry. "It is clear that like as
in any other business, tie-ups and splits will now be an
integral part of the Indian PR industry. Consolidation
is the name of the game. In the long run, the Indian PR
industry will evolve for the better."
That PR is
now treated as a serious business activity is clear from
one more development: many advertising agencies are
starting their own PR divisions. Most of the large
advertising agencies, such as O&M, Lintas and
Trikaya, have their own PR set-ups. But most of them
have not made any significant dent yet in the business
of pure play PR agencies.
Cherian explains why,
"At advertising agencies, PR is often offered as part of
a communication package, which translates into 'Pay for
the advertising, the PR is a freebie'. Therefore,
clients who view PR as a serious arm of communication
tend to take a dim view of such extensions and therefore
prefer to put their money on stand-alone agencies."
That should be sweet music to the ears of others
trying to enter the booming Indian PR scene.
(©2002 Asia Times Online Co, Ltd. All rights
reserved. Please contact content@atimes.com
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