Publicis Moves East to Exploit Low-Cost Ad Logistics

24 November 2005

The rush by global corporations to bolster their collective bottom line by exporting employment opportunities to low-cost economies continues apace.

While cannier marketers began to latch onto this Gadarene wheeze in the mid-90s, few agencies have dipped their toes into this enticingly warm water. Until now.

World number four marketing services company Publicis Groupe announced Tuesday it is to take a 60% controlling stake in Solutions Integrated Marketing Services based in New Delhi, India.

Self-billed as "the leading [Indian] provider of full service lead generation and direct marketing programs," SIMS goes on to proclaim: "Our programs are proven to consistently deliver quality, quantity and cost targets."

Clearly Publicis chairman/ceo Maurice Lévy is impressed: "You have some fantastic people there - great professionals," he told SIMS executives on a recent visit to the subcontinent.

But the deal is not only a useful foot in the door of the burgeoning South Asian market, as Lévy acknowledges: "It's something which could not have been built by us overnight."

It is also a way of slashing call centre, data-entry and processing costs for European and US clients. SIMS currently provides such services for multinationals like Cisco Systems, General Motors, Hewlett-Packard, Microsoft, Philips, Shell, Siemens and Sony.

Lévy can scarce contain his enthusiasm. Developing countries such as India, he says, are seeing explosive growth in marketing services - everything from staging promotional events to instore promotions.

"There is almost no infrastructure in marketing services. The growth that you can expect is huge because we are starting from a very low base."

Data sourced from Financial Times Online; additional content by WARC staff