Inside Story Of How WAT Consult Got Acquired By Dentsu Aegis Network

The inside story of the acqusition of WAT Consult by Dentsu Aegis Network India with thoughts from Rajiv Dingra, Ashish Bhashin and Sanjay Mehta


“Consolidation is going to happen. Bigger advertising agencies acquiring digital agencies in the country brings an integrated offering when you pitch a client,” Rajiv Dingra had shared with Lighthouse Insights late last year. While appreciating the acquisitions that had happened in 2014, he had advised that the focus should also be on what both agencies - mainline and digital - are going to achieve together. “Just acquiring digital agencies to spoon feed them with internal clients will not go too far. Clients won’t buy your digital agency and will keep going to boutique digital agencies.”

Rajiv, CEO & Founder of one of the most well known digital agency in the country, WAT Consult had shared these thoughts while the agency was still an independent one. Nine months later, WAT Consult, which celebrated 8 years of its existence last month, is no  more independent. It recently got acquired by the Indian unit of Japanese advertising group Dentsu. ET reported that Dentsu Aegis Network India acquired upwards of 75% stake in WATConsult at a valuation of anywhere between Rs 180 crore and Rs 200 crore. Going further WAT Consult will be referred as “WATConsult - Linked by Isobar”.

Rajiv will continue as CEO of the entity and will report to Ashish Bhasin, chairman and CEO South Asia Dentsu Aegis Network. His key management team, including Nipun Kapur, COO of WATConsult and Heeru Dingra, CFO of WATConsult, will also continue in their respective roles.

While the financial details of the deal were not revealed, the news brought a lot of cheer for WAT and Rajiv Dingra who started the agency in 2006.

Rajiv Dingra
Rajiv Dingra

Lighthouse Insights spoke to Rajiv on the acquisition and what led him to say yes at a time when digital is still scratching the surface in the country. “I still remember my last conversation on this with LI and I still maintain that. The only difference is the way clients are looking at integrated solutions which I am seeing more of. The challenge is mainline agencies are not equipped with digital offerings and digital agencies largely don’t do mainline.”

Digging more on why it is a challenge, he added, “Most large networks rarely talk to each other, they work in silos. Even if they are from the same family they are competing with each other. Dentsu Aegis has been one network that have one P&L per country model and they imbibe the philosophy of working together. Future of digital lies in integration and we feel that Dentsu understands it much better than any other network”.

Rajiv started his career in the Indian digital space with the launch of WAT blog back in 2006. A year later he founded WAT Consult. Over the period of eight years, WAT Consult evolved as a 360 degree digital media agency employing more than 160 people in offices across major metros in the country from Mumbai, Kolkata, Delhi and Bangalore. Not to mention that the agency has worked with esteemed clientele that include Godrej, Tata, Bajaj, Mahindra, SAP, among others while building annual revenues of nearly Rs 30 crore.

In fact its not just WAT Consult, we have seen how digital and social media agencies have started playing a dominant role in advertising campaigns. Consequently, the industry saw major acquisitions last year like Social Wavelength acquisition by JWT, 22 Feet acquisition by  DDB Mudra, and Law&Kenneth acquisition by Publicis.

Early talks and reason for getting acquired

WAT Consult had been in acquisition talks since the last two years, after it realized that to scale to the next level, it will need to find a global network that would give both space and growth as an independent agency. The agency had a word with almost every big network.

Ashish Bhasin
Ashish Bhasin

Talks with Dentsu Aegis started in 2013 along with several networks but Dentsu was the only promising network with which WAT Consult wanted to partner with. “Firstly most of the networks didn’t value digital and they didn’t have any vision. Secondly they didn’t value us, for them we were just a financial acquisition and not a talent acquisition.

Most networks are doing just financial acquisition and not buying the vision of the digital agency. While financial acquisitions is required, a match of a vision at a global level, local level and entrepreneurial level is really important which we found with Dentsu,” Rajiv shared on why he said yes to Dentsu.

The idea of one P&L and the integrated solutions in each country that they function in is a differentiated ideology, the other reason that appealed to WAT Consult about Dentsu Aegis. “We work in the business of brands, if an agency network differentiates itself as a brand then it is a great thing since you are not joining all the others but you are making your own race. I believe in the ideology as I am in the business of branding, digital and communications.”

Dentsu Aegis which has more than 650 plus people in digital, already has four agencies under its belt with a specific specialization. With WAT Consult joining its network it will have a strong presence in social media like it has in performance marketing with iProspect, creative media buying & planning with Isobar and then the immense skill set of Webchutney in digital. “With these four acquisitions in India, we now have the best and comprehensive digital team in the country. So that we can offer our clients end to end solutions with the best specialist in every area,” informed Ashish Bhasin, Chairman and CEO South Asia Dentsu Aegis Network, on the reason behind acquiring another agency in the country.

Adding more insights to the acquisition, Ashish informed that with WAT Consult there was a strategic fit, as it is one of the best players in the social media space. Post this, people fit was the crucial decision to be made, so Dentsu started meeting not only Rajiv but all the senior members of his agency to find if there is a match in mindset. “Ultimately it is the people who work together and grow the brand so people fit was a must for us. We understood their way of working, we figured out the complimentary areas, among other business details. Finally when we thought that one plus one could be eleven that’s when we decided to go ahead with the acquisition.”

Even though digital is a small space in comparison to TV and Print in the country, the space is the fastest growing in the country. According to global media-buying and planning firm GroupM in it’s This Year, Next Year report stated that ad spending in India will grow 12.6% to touch Rs.49,000 crore in 2015. The report also states that video, mobile and social will be the biggest growth drivers; interestingly WAT and Dentsu have placed their bets on the same space.

With digital growing in the country, acquisitions like these are good for the market as more and more network agencies realize that they need more firepower in terms of specialist digital and social media agencies. “This trend should continue further, as I reckon, the few other independent digital agencies of scale, might also be absorbed into larger networks soon, ” Sanjay Mehta Founder and Jt. CEO at Social Wavelength said.

Sanjay shared his extreme happiness for Rajiv and his team for having created this amazing value in their company. “At one level first of all, I see this as a celebration of the entrepreneurial spirit”. He also believes that these are win-win engagements, as the independent digital agency now gets a much larger canvas and opportunities, besides a higher level of exposure and knowledge.” And of course, the founder gets some liquidity for the asset he has built”.

Road ahead for WATConsult - Linked by Isobar

Sanjay Mehta
Sanjay Mehta

Going further WAT Consult would be known as “WATConsult - Linked by Isobar” but it would remain independent and carry on the operations as it has been doing so far. “Going further we get all benefits of being part of a network, we continue to work the way we have been doing and continue to win business as part of the primary social media agency for Dentsu Aegis Network,” shared Rajiv.

So does that mean ‘operating as an independent agency is a tough call’? Rajiv still believes that being independent isn’t a challenge but the only challenge is the vision.

“Do you want to be the owner of two percent market share or do you want to be the owner of 20 percent market share and then what are the sacrifices that you are ready to make to achieve it. There isn’t much of a difference in a network and independent agency, in fact the latter works much harder while networks have access to better tools. It is the vision that makes the difference,” shared Rajiv. With its present vision which is to be the number one digital agency in the country in the next five years, partnering with a network was the best option.

“My whole and soul goal in WAT Consult is not just to take it as a new story in Economic Times but make it as a true competitor in the digital media space.” Further he said, “This acquisition story means that we have only got noticed, we have not arrived. For the next four to five years we need to work on it to arrive in the industry.” Rajiv shared the same thoughts with his team when the acquisition news was out.

Rightly put by Sanjay as a “celebration of entrepreneurship” for an agency which has not only been the early believers in the medium but has also created many entrepreneurs in the last eight years. For Rajiv life is the same as a CEO -  pitching business, chasing the early morning flights, staying as the ever enthusiastic entrepreneur and growing the brand but now with the added responsibility of being a part of the Dentsu Aegis Network India.