After months of speculation, it’s finally official. Scarecrow Communications has been acquired by international advertising agency network, M&C Saatchi. We talk to Manish Bhatt, Raghu Bhat and Arunava Sengupta - the three founding partners of the eight-year-old agency, Scarecrow Communications - and Richard Morewood, CEO Asia, M&C Saatchi about all that the acquisition entails
BY SAMARPITA BANERJEE
When I look at the Scarecrow story over the last eight years and what’s been achieved, it reminds me of the story of M&C Saatchi itself. It’s a story of hard work, determination and dedication. They are the embodiment of the founding Saatchi philosophy - that nothing is impossible. That an individual acting alone or almost single-handedly can make what seems highly improbable, in fact, happen,” said Lord Maurice Saatchi, Founder, M&C Saatchi, who took to YouTube to announce the acquisition of Scarecrow by the global agency headquartered in London.
There are a lot of parallels between the two agencies. While M&C Saatchi was started by the two brothers, (Lord) Maurice Saatchi and Charles Saatchi; Scarecrow was the brainchild of Raghu Bhat and Manish Bhatt, who are often perceived to be brothers, within the industry. While the former agency started its operations in a small apartment in London, Scarecrow started its operations in a cafe in Mumbai. Moreover, while the global agency started its journey with Qantas, an Australian airline brand, Scarecrow’s first client on board was an Australian financial brand, Religare Macquarie.
However, it was not just these chance similarities that drew M&C Saatchi towards Scarecrow, which will now be called Scarecrow M&C Saatchi. “What drew us to Scarecrow was their strategic and creative rigor, and their quality of work. For 23 years, our philosophy has been all about simplicity of thought and we felt that these guys worked on a similar philosophy,” says Richard Morewood, CEO, M&C Saatchi, Asia. He goes on to say that the agency is always on the lookout to partner with people who have a similar bent of mind, similar ethos and cultural personalities. He adds, “Moreover, they didn’t really want to sell and we were looking to partner with people who wanted to grow their business, rather than exiting it.”
While the conversation around a possible merger started around 2015, it took several rounds of meetings to convince the trio about the partnership. In the meantime, other agencies and networks including Dentsu Aegis Network, WPP, Y&R and Cheil also approached the Indie agency with merger offers. However, what is it that made the trio say yes to M&C Saatchi’s proposition? “We were very careful with all the offers and weren’t very enthusiastic about a lot of them. We are simple, middleclass Indians and don’t really have very lofty ambitions. As long as we are doing good work and taking home our salary each month, we are happy. Most of the companies who approached us, honestly, were interested in buying us out. We did not want that. We were too young to be bought out. But I must say that Moray MacLennan (CEO, Worldwide, M&C Saatchi) and Richard Morewood have been very patient with us. This turned out to be the longest-ever courtship for all of us,” says Arunava Sengupta, Founder-Director, Scarecrow.
When asked about the proportion of the stake that the two parties own post the acquisition, both M&C Saatchi and Scarecrow described it as a 50:50 partnership. Raghu Bhat, Founder- Director, Scarecrow says, “If it was a 100% acquisition of Scarecrow, we would not have gone ahead with the deal. M&C Saatchi will be an equal partner in whatever we do.” Scarecrow will also retain its own identity and operate with full creative freedom. Vivek Suchanti, one of the early investors in Scarecrow, will no longer be associated with the new entity.
M&C Saatchi is very clear about one thing; that they don’t want to bring about any kind of change in the way Scarecrow functions. Says Morewood, “We are not partnering with them to change their business. We work with local partners and let them flourish. What we can offer them, however, is the opportunity to tap into our global and market-specific expertise. Moreover, there’s also an opportunity for us to bring some of our strong, specialised brands to the Indian marketplace. For example, we have a brilliant offering in sports and entertainment in the UK, the US and Australia, and we know the huge opportunity that India presents in terms of both sports and entertainment. Basically, our model is centred around the fact that if something works for us in one market, we look at taking it to other markets and finding people to do that for us.”
Meanwhile, Manish Bhatt maintains that there won’t be any major leadership or structural changes at an organizational level. Elaborates Bhatt, “Partnerships are based on a simple principle – you need to partner with someone who has a complementary capability. Advertising is all we know and enjoy. This is something we have built together and our endeavour would be to try and make it better. We took three years to say yes to M&C Saatchi because we enjoy our position and what we do and will probably continue in these same roles.”
Meanwhile, elaborating about how Scarecrow became the natural choice for M&C Saatchi to make its presence felt in India, after its acquisition of Delhi-based February in 2014, Moray MacLennan, Worldwide CEO, M&C Saatchi said in an official statement, “Our strategy is simple: find top talent in key markets and give them the freedom, responsibility and backing to flourish. Brutal Simplicity of Thought and an entrepreneurial spirit have been the key to M&C Saatchi outperforming the market. They are what clients both want and need. It was relatively easy to identify India as a key market; it was more challenging to find the right talent. In Scarecrow, we have found this and wish them all the best.”
So is M&C Saatchi on the lookout for more acquisitions in the Indian market currently? While stating that India is one of the most important markets for the network, Morewood adds they are not currently thinking of more acquisitions. He explains, “For us, acquisitions are more of an exception rather than a rule. As a Group, our preference is start-ups. We ourselves started off as a start-up. Strategically, we want the best talent in the market. If we can’t find people, we look at independent businesses that are doing good work. We have already done a few acquisitions in key markets like China, India and the US, and therefore, we aren’t really on the lookout for any more acquisitions now.”