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A Look Back: The Battle for Redfiffusion

For years ad agency Rediffussion's Arun Nanda refused to sell out to WPP's Martin Sorrell. Now Sorrell's patience appears to have run out

Published: May 31, 2011 06:40:42 AM IST
Updated: Feb 27, 2014 12:18:12 PM IST
A Look Back: The Battle for Redfiffusion

WHY WE DID THE STORY: The story almost wrote itself. Gold medalist from IIM Ahmedabad, Arun Nanda, starts an advertising agency in 1973,  signs up marquee clients and churns out legendary ad campaigns.

Once the Indian market becomes big enough, comes his rival, Martin Sorrell. In India, they end up partnering, with an agreement for Nanda’s Rediffusion to become at some point a fully owned part of Sorrell’s WPP. The agreement sours because, after five years, Nanda refuses to sell out, figuring there are enough big Indian companies he could service without requiring WPP’s global network.

In August 2010 Sorrell strikes, snatching away two of Rediffusion’s largest clients, Bharti Airtel and Colgate-Palmolive, together accounting for over 40 percent of its revenue. It was a body blow almost impossible to recover from.

(You can read this story here )



WHERE THE STORY STANDS:
Nine months later, Rediffusion is still standing, but as a shadow of its formidable former self. “For those of us who’ve worked at Rediffusion, it’s like the passing of an era,” says a former creative employee who’s now working at an agency owned by one of the four large global ad conglomerates.

Though Nanda maintains that he has plugged the fall in revenue due to the exit of his largest two clients, even claiming that his revenue is up two percent over the comparable quarter a year ago, his industry peers find that hard to believe. They say new accounts like MTS or Emami, or even the growth from existing ones like Tata Motors, will not be sufficient to plug a 40 percent hole.

(This story appears in the 03 June, 2011 issue of Forbes India. To visit our Archives, click here.)

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