JWT picks majority stake in Hungama Digital

Last Updated: Wed, Jun 13, 2012 19:54 hrs

The race to acquire digital assets among ad agencies in India is getting hotter by the day. After Leo Burnett acquired Indigo Consulting in April, JWT has made inroads into the Neeraj Roy-promoted digital major Hungama. The WPP-owned agency has acquired a 51 per cent stake in Hungama Digital Services, which is into digital advertising and promotions marketing. The deal size is estimated to be Rs 25 crore.

Hungama Digital Media Entertainment, also known as the Hungama Group, has a turnover of Rs 200 crore. Digital advertising and promotions marketing constitute 15 per cent of the group’s turnover.

Mumbai-based Candle Acendo Cap was the advisor to Hungama on the deal.

“Hungama Digital Services is the coming together of two exceptional teams in a globally relevant market. We hope to offer integrated digital and experiential services to our clients and prepare brands to connect, interact and now transact with their customers,” Roy, managing director and CEO of Hungama Digital Media, said.

Colvyn Harris, CEO of JWT India, added, “Digital is our next new frontier. The idea of the partnership is to build a digital offering for our clients, so we can live up to being a single source partner across all their marketing solution needs.”

Hungama Digital Services would be a part of JWT’s overall digital offering, Harris said.

In the past few years, most ad agencies in India have been scrambling to acquire digital assets despite the fact that digital advertising constitutes five per cent of the ad spend in India.

Most advertising honchos admit the investment made in digital is for the future, as the penetration of mobile and other digital devices continues to grow.

India ranks second after China in terms of mobile phone penetration, with a total user base that exceeds 500 million. By the end of this year, the base is likely to touch 696 million, according to a report by Gartner.

Advertisers in categories such as fast moving consumer goods (FMCG) have already begun migrating online in an attempt to catch the attention of consumers there. While FMCG companies have been a tad slower than players in banking & finance, insurance, travel and telecom, who adopted digital advertising early, the former have been devoting their attention to the medium now. Most brand managers in FMCG companies today come up with both online and offline campaigns as part of their integrated marketing plans. It is here that the role of the digital agency becomes critical, say ad experts, since they are specialists in this area.

Digital agencies are expected to leverage their core competence and come up with campaigns that stand out of the clutter. The accent of digital campaigns in the past few years has been to not only inform, but also engage.

More from Sify: