Are the needs of advertising clients changing in India?
Yes. Advertising clients are now looking at advertising agencies as an integrated advertising solution. Today, customer relations have become an all-pervasive concept. Customers are keen to know what the advertising agencies are doing about getting connected to them. Clients want to know whether an advertising agency can offer insights into consumer behaviour. Clients are also beginning to look at advertising agencies not only as content-creators but also as a channel to deliver content.

Is size an important factor for an advertising agency?
Yes. Size will have a very important role to play. For, size will help an advertising agency to gain better connectivity and insights into consumer behaviour. A large advertising agency will be able to offer considerable inputs and insights to its clients. So, quite a few advertising agencies will get into joint-ventures and strategic alliances soon. And we should be prepared to see more convergence in the Indian advertising industry.

However, in a growing market such as India, there will be advertising agencies of all sizes and shapes. What is more likely to happen is this: large advertising agencies will become larger and they will get a large share in the communication budget. Mid-size advertising agencies will become small agencies. In my perspective, a Rs 100-crore advertising agency should become a small agency.

How do Indian advertising agencies compare with their global counterparts?
Very favourably. The management and strategic capabilities of the top five or six Indian advertising agencies and their contributions to worldwide profits can be ranked among the best. Indian advertising agencies account for more than 33 per cent of Asia-Pacific advertising profits.

However, Indian advertising agencies are far too ethnic in their communication and thus have a limited universal appeal. Not only execution, even their ideas are ethnic. This should change. Are we ready for advertisements through automated teller machines, WAP devices and interactive television?

India is an emerging economy. So, television and the Internet are expected to grow exponentially. And Internet on mobile devices will grow even faster. We are in a growth curve that is looking upward. Sure, we are catching up fast. Ironically, both the bullock cart and space technology are going hand-in-hand in India.

Yes, advertising agencies are gearing up to grab the emerging opportunities. For instance, at O&M India, we have already put in place people for our interactive division. We are up-to-date on e-business solutions, advertising on WAP devices, Internet and interactive television. We are constantly at these developments and are preparing ourselves for the future. Already we have a business plan in place. Soon our interactive division will become a global outsourcing platform.

Once data is available, online advertising will explode. Three years ago, we had just two people working in our New York-based interactive division. Today, there are 250 people there. The point is it is necessary to understand these emerging media opportunities and what could be delivered through them.

Should Indian advertising agencies with interactive initiatives have a software background?
That was only historical. Worldwide, all those fast-growing interactive advertising agencies are no longer software companies. For, software companies do not understand brands.

Does getting into interactive advertising call for huge investments?
Yes. Interactive advertising calls for huge investments. To start with, interactive advertising needs creative people, who are very expensive. Then comes training and technology. All these entail huge investments. Only those advertising agencies which are prepared to invest in all these areas will become successfully interactive and Internet-driven.

How do you see the Indian advertising industry evolving five years down the line?
The top 15 advertising agencies will account for as much as 80 per cent of the total business. And there might be some 100 advertising agencies fighting for the balance. So, shakeout is inevitable. Eventually, business volume will decline and it will become difficult to sustain.