In stark contrast to the spate of talk about mergers and acquisitions in the ad world, Pinstorm and Lintas Media Group announced a significant non-equity partnership. Designed to push clients to performance-driven media choices, the alliance between two leading firms in the offline and online worlds puts further pressure on traditional agencies and media houses – and is a boost to the world of digital advertising.

Speaking at the occasion of the announcement, Lynn de Souza of the Rs. 1,800 crore Lintas Media Group said “We don’t think that just buying a digital agency will contribute to our client’s success. What attracted us to Pinstorm was their pure adherence to pay-for-performance – a vastly different model to the commission and retainer structures that Indian clients are used to. We think this model can go a long way in bringing accountability and transparency to investments in advertising.”

The pay-for-performance model was pioneered by Google and Yahoo, and has been pushed further by Pinstorm, India’s only MNC digital ad firm, where the agency pays for the media and the creative – and the advertisers just pay for results.

Mahesh Murthy, Founder of Pinstorm said “Around the world, media costs are going up and clients are cutting commissions and retainers because they aren’t able to see how their advertising is performing. At Pinstorm, we make it simple, by asking a client to only pay for the prospects or results we deliver. Our alliance with Lintas comes from our joint belief that the Rs. 16,000 crore Indian advertising industry needs a new model. We believe that working together, we can bring pay-for-performance advertising into the mainstream of advertiser choices.”

The alliance estimates that they will be able to drive an incremental Rs. 100 crores of advertising to move over from traditional models to a performance-driven model in the next 12 months. “Digital advertising accounted for just 4% of spends in India last year. With this alliance and other efforts, we believe that investments in digital advertising will cross the Rs. 1,000 crore mark in India this year – which is almost a 100% growth over last year” said Mr. Murthy.

“An industry only grows when there is pay-for-performance. For too long have clients worried that their agencies and publishers are simply recommending higher media spends because that’s how they earn more. That era will soon end. Our work with Pinstorm is to collaborate on clients to give performance-driven options initially across digital media – but we hope over time to grow the same basis to traditional media like Broadcast, Print and Outdoors too” added Ms. de Souza.

The Lintas-Pinstorm alliance will first come into effect on Lintas’ roster of clients and soon expand to other businesses. Lintas Media Group is among the largest media agencies in India, managing a spend of over Rs. 1,800 crores on broadcast, print, outdoor and other media for clients like Idea, Bajaj Auto, Maruti Suzuki, ITC, Sony, UTI and Naukri.

Pinstorm is the largest independent digital advertising firm in South East Asia, with offices in Bombay, Delhi, Singapore, Kuala Lumpur, Beijing and Santa Clara in Silicon Valley. Pinstorm uses proprietary technologies across search engine marketing (SEM) search optimization (SEO), email, SMS advertising, online display advertising, online community creation and blog management to handle the performance advertising needs of Yatra, Jet Airways, Taj Hotels, Sharekhan and HSBC in India.

The alliance is effective immediately and in place across all advertisers in India.