Arun Sudhaman 20 Nov 2017 // 8:13AM GMT
MUMBAI — $100bn Indian giant Tata is embarking on a review of its lucrative PR agency arrangements, putting six-year incumbent Edelman on alert and triggering widespread interest among rival firms, the Holmes Report has learned.
India's largest PR mandate is worth an estimated $5m and has been handled by Edelman for the past six years as part of its alliance with ad agency Rediffusion. However, the contract will expire at the end of January 2018, after only being extended for three months by new Tata Sons chief communication officer Pradipta Bagchi.
"I can confirm that the contract has run its course," said a Tata Sons spokesperson. "We’ve extended for three months as a transition period and we’re looking at our options."
The spokesperson added that it remains to be seen whether Edelman will retain a role on the coveted mandate, which covers domestic PR support for Tata Sons along with the conglomerate's 29 group companies. The high-profile account has helped to underpin Edelman's growth into India's largest international PR firm, with 450 people across 11 offices.
More than 100 agency staffers currently work on the Tata PR business, which accounts for around one-third of Edelman's India revenues and covers a broad range of practices, including corporate, consumer, B2B and technology.
Tata Sons' international PR agency, the Holmes Report can reveal, is Teneo Strategy — whose role is unaffected by the domestic review.
Agencies have yet to be formally contacted regarding the upcoming "transition", the Tata spokesperson confirmed. Neither were details forthcoming as to how the company intends to structure its PR support after the contract expires.
Regardless, given the size and stature of the assignment, it seems likely that many of India's leading PR agencies have already begun to jockey for position. Edelman's hold on the business has always been the subject of keen speculation among rival firms, particularly in the run-up to the contract's original expiry one year ago.
That deal was extended for another year ahead of the boardroom coup that unseated chairman Cyrus Mistry and led to a protracted war of words. Mistry was eventually replaced by TCS CEO N. Chandrasekaran, who brought Bagchi with him to oversee communications.
The boardroom struggle, which undermined a painstakingly-built reputation for corporate probity, also saw other PR agencies drafted in to support various parts of the Tata empire, notably Adfactors on investor relations and Avian Media for Tata Trusts. Adfactors' own relationship with Tata has also ended as of last month.
Edelman secured the Tata mandate in 2011, after the last significant dent to Tata's reputation until last year's saga — the Niira Radia lobbying scandal that ultimately led to the closure of favoured Tata PR firm Vaishnavi.
It is understood that Rediffusion's lead role on the business owes much to a strong reputation with former Tata chairman Ratan Tata. With Chandrasekaran and Bagchi now calling the shots, though, industry sources expect changes, even if Edelman will be highly keen to salvage the relationship.
"It has been a privilege to work for the Tata group," said Edelman India CEO Rakesh Thukral. "Edelman brought scale and true depth of expertise to create value at every step of the journey, and will continue to explore opportunities to work together."
Two-thirds of Tata's revenues are now generated outside India, by such global giants as Tata Steel, Tata Tea, Tata Motors, Tata Consultancy Services and Tata Communications. At present, these companies use an array of PR agencies in various markets.