Japanese giant bets big on Indian market, acquires leading digital marketing company

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Dentsu Aegis Network, a wholly owned subsidiary of Japan’s Dentsu, today announced the acquisition of SVG Media, one of the largest digital marketing agencies in India, for an undisclosed amount. This merges SVG Media, which was part of the Smile Group, with Dentsu Aegis Network’s Asia Pacific digital marketing agency, Columbus, which now launches in India as SVG Columbus.

The acquisition strengthens Dentsu Aegis Network’s position in the search and performance marketing market in India. It is already Google’s largest search engine marketing partner in India, says a statement announcing the acquisition. This also continues Columbus’ expansion across Asia Pacific where it is now in nine countries. Dentsu Aegis Network as a whole, through its 10 brands, operates in 145 countries.

India is a significant market with rapid growth potential in its mobile marketing business.

The consolidation comes at a time when India’s digital advertising appears poised for fast growth due to multiple factors – the rollout of affordable 4G plans with the advent of Reliance Jio, the continuing boom in smartphones, and a GDP growth rate of over 7 percent. A recent study by KPMG-FICCI projected a 14 percent annual growth rate from 2016 onwards for the Indian media and entertainment industry to reach US$37.5 billion by 2021. The industry grew by 9 percent last year. A temporary slowdown in business growth due to demonetization from November last year is coming to an end.

Advertising revenue is projected to grow at 15 percent in the same period, compared to 11 percent in 2016. The fastest growing segment will be digital advertising, which is expected to grow at 31 percent to reach US$4.5 billion in 2021, accounting for more than a quarter of total ad spend in the sector.

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“India is a significant market with rapid growth potential in its mobile and performance marketing business. SVG Columbus is ideally positioned to capture the fragmented long tail publisher market in India, using technology and data,” says Ashish Bhasin, chairman and CEO of Dentsu Aegis Network, South Asia.

SVG Columbus CEO Anurag Gupta added: “We started out as a digital media group more than a decade ago, and for us to join forces with a market leader in digital makes sense. Their priority in placing digital at the forefront of their strategy aligns perfectly with ours.”