What are the causes for concern? One, this sensitive industry is taking time to adapt to technological changes. Two, media planning is becoming increasingly difficult with new advertising options and media emerging by the day. Three, advertising clients are clamouring for more and better services. And four, with margins falling there is tremendous pressure on advertising agencies to go for volumes and convert themselves into one-stop communication shops.

With rising exposure to global markets, consumer psyche is undergoing a sea change. What is making things difficult for the Indian advertising industry is the diversity of the Indian market. The need to offer advertising solutions that can work effectively across the nation is pushing Indian advertising agencies to the wall. Speed and delivery have become critical factors for success in this dog-eat-dog industry.

Though these are hurdles, they are not insurmountable. In fact, these hurdles are opportunities in themselves. Sectors such as healthcare and insurance hold tremendous promise to the advertising industry. But, the biggest opportunity to date is coming from online advertising, which is redefining the rules of the advertising game and shifting the focus of advertisers from broadcasting to narrowcasting.

Thanks to the emerging online initiatives, gap between the Net and advertising agencies is narrowing. And this gap will narrow down further with the impending arrival of other online media such as WAP phones.

Not only are these changes going to turn the Indian advertising industry technologically savvier, they are also going to redraw its very composition. Soon, there will be cross-holdings, mergers, acquisitions and strategic alliances. To use these strategic weapons effectively, Indian advertising agencies will have to be clear about their focus and their core competencies.