Times In PR Mode
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The road that began with Media Net and traversed the virgin fields of private treaties, has done a full circle, and has now spawned Tatva Public Relations — a new 33:67 joint venture between Bennett, Coleman and Mumbai-based public relations firm Adfactors PR. The joint venture was the result of an 18-month hunt. An investment banker was appointed who took in pitches by several public relations firms before Adfactors was chosen.
“The Adfactors joint venture is not exclusive,” says Sunil Gautam, chief executive of Mumbai-based public relations firm Hanmer & Partners. “With BCCL targeting investment deals in 1,500 companies over the next few months, the media house is expected to ink a few more joint venture deals with other public relations companies too.” Media industry sources said similar joint ventures were being planned with advertising companies too.
Expectedly, there is a howl of protest that BCCL, the largest news and media company in India, promoting a public relations agency, is a conflict of interest. Times and Adfactors insist that the debate has been fuelled by sections of the media keen on ‘Times-bashing’ even though they have their own version of Media Net and Private Treaties.
The Tatva plan is audacious, but in sync with the philosophy of Times Private Treaties (TPT). Started in 2006, TPT is a division of Bennett, Coleman that trades a stake in companies in return for providing advertising and branding.
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Typically, TPT invests in companies that have achieved some critical mass but don’t have the necessary financial clout for marketing and promotion. The TPT website reveals 112 companies in which BCCL has bought a stake through this route, though the number is believed to be closer to 160. BCCL’s investments through this route are currently valued at a little over Rs 1,500 crore.
Private Treaties is both, a huge business success as well as a big blow to the traditional separation of news and advertising. As a method of cashless acquisition of equity in blue chip, mid-size companies leveraging its media penetration, Times is seen as a pioneer.
On the editorial front though, it has attracted criticism for blurring the lines between editorial and advertising content. That other media companies such as HT Media and Dainik Bhaskar have gone the Times way in recent months shows that business tatvas have gained preponderance.
“Private Treaties eases the cash flow constraints on a company to devote resources to its brand building initiatives…,” says the introductory pitch of the TPT website. “As a treaty partner, your company can also avail of a bouquet of professional expertise within the Private Treaties Department.”
Private Treaties companies include mid-size companies such as Pantaloon, Apollo Hotels and Paramount Airways, but also large real estate companies such as Emaar MGF and HDIL (Dewan Group) and big gems and jewellery players such as Gitanjali and Rajesh Exports. Many of these companies, especially the realty companies, are new to marketing and branding strategy and expect TPT will give them a leg up in exchange for a stake.
Shiv Kumar, director of TPT, did not respond or return calls. Ravi Dhariwal, CEO of Bennett,Coleman, in an earlier interview, said the Private Treaties philosophy was to deliver not just visibility to its partners but branding and marketing solutions.
It is in this context, the latest offering, Tatva Public Relations, has to be seen. Companies that need an ‘image makeover’ and an aggressive media pitch will be recommended to engage the services of the captive public relations firm.
“Revenue from Tatva is incidental,” says Hanmer & Partners’ Gautam. “Times has a direct interest in buttressing the value of these companies it has invested in and a public relations company can make a difference. There is no conflict of interest.” But Tatva and the other public relations joint ventures it sets up will also be a significant profit centre for Bennett, Coleman. In devising the branding strategy for a Private Treaties client BCCL, through Tatva, will be a direct beneficiary of the client company’s marketing and public relations investments.
“A Private Treaties company is free to use any other public relations firm, but we expect the small and mid-size companies to come to Tatva,” said an executive of Adfactors PR, the majority shareholder in Tatva Public Relations. “Tatva is a special purpose vehicle (SPV) to provide customised, cost-efficient communication services for Private Treaties clients. It is like an investment banker or a PE fund recommending that a company it is working with use the services of a particular public relations firm,” the Adfactors executive preferring anonymity added. Why did BCCL not just hire one or more public relations firms to pitch private treaties companies. Pat came the Adfactors reply: “Equity in the public relations joint venture shows BCCL’s commitment.”
There is another side to Tatva too. There is considerable pressure on the Times Group from its Private Treaties partners to deliver. The equity-for-branding deals signed by the two sides promises advertising and promotion by the Times Group, but explicitly states that editorial content cannot be guaranteed.
Despite these clauses, Private Treaties clients expect editorial returns in the form of plugs and stories. This has led to some tension between partners as surveys indicate that other business newspapers very often gave more coverage than Times Group newspapers to Private Treaties clients.
“We have pointed out that real estate in the Times newspapers is pricier than in a Business Standard or a Businessline,” said a senior Times functionary. “Editorial is not part of the deal, but there is an expectation,” he added.
Within Times there has been considerable debate on the continuing violation of the editorial space. For instance, a series of face-offs with editors had finally led to Media Net executives being limited to creating rate cards for editorial content only for supplements such as Bombay Times and not for the main paper. In this context, Tatva PR will plan and execute the needs of Private Treatise clients more comprehensively across non-Times media, while providing Times’ editors and administrators a buffer from pressure of these corporate partners.
For BCCL, the joint venture to create a captive public relations outfit may be just one more link in the chain of leveraging its near monopolistic hold over some media platforms. But for the two-decade old Adfactors, with annual billings of over Rs 200 crore, the Bennett, Coleman partnership is a huge break to make it to the big league. “We do not know how big the revenues will be from this captive agency; as a business plan it is significant and novel,” an Adfactors executive said.
Finally, for those attempting to chart the course of change in news media, these developments throw up both challenges and concerns.
(Businessworld Issue 19 - 25 February 2008)