You have done a lot of consumer communication research worldwide. How do consumers across the globe perceive online advertising, especially for branding?
The consumer worldwide sees the Internet as a very involving medium, ranking next to only TV and cinema. We recently conducted a study on consumer perceptions about online advertising in 12 countries in Europe and Latin America. It showed that while the consumers found spam/junk/unsolicited mail very annoying and cleaned it out without even reading it, they considered it a very good source to go to for information and reference.

However, research show that the Net is not a very good branding vehicle - it can be used for brand switching and brand maintenance exercises where information and customer relationship is very important, but not for launching a new brand, for which reach is critical. However, that will change with the broadband availability and increase in the penetration of digital TV.

Why is online advertising worldwide yet to succeed in getting the consumer's mindshare? How can that be changed?
Low Internet penetration is one of the reasons, as is not enough bandwidth. If bandwidth availability improves, video-streaming will start and Internet ads can be made as interesting as TV ads. Our research shows that the more mature the online consumer is, the less he clicks on a banner advertisement, especially a static one. While the percentage of it was 0.5 per cent in Sweden, it was 2.5 per cent in Italy. The situation can be changed only if Internet ads become more entertaining and provide an incentive to click. I am very cynical about bribing the customers with incentives like freebies and heavy discounts - that will attract only brand-fickle customers who will switch on the basis of discounts offered. Valuable customers are more brand-conscious and are not bothered about discounts.

Is the ICE age consumer any different from the Old Economy consumer?
Not very. He/she is the same person who also reads the newspaper in the morning, sees the hoardings on the way to office etc. Only now there are more access points to reach him - Internet, mobile, pager etc. And may be he/she sees a few minutes less of TV ads and listens more to the radio as that can be done simultaneously with browsing.

What kind of advertising and marketing will work on the Net?
The Internet will work best when it is combined with other media - let's say an event, that is videostreamed live on the Net and information about that is advertised in the print and other media. A large number of people will not only see the event on the Net, but are also likely to log on to the site the next day. Another thing that will work very well on the Net is viral marketing: incentive for every new customer one introduces. That spreads like wildfire. Cause-related marketing: for instance, `every time you click on a banner a blind child will get a chance to see' - will do very well on the Net. As for sending e-mails, it has to be done with the customers' permission and not be intrusive.

Considering that the Net scores so poorly on the `reach' front that is critical to any communication, how can its choice as a media be justified to the advertiser?
Since it fails on all the basic tenets of brand communication - amount and speed of reach, affinity to the target audience and effectiveness for the branding task, it is difficult to justify. However, it has an experimentation value as well as a lot of PR value. Its use makes sense for those sectors that need to be seen as innovators and trendsetters viz. holiday companies, car manufacturers, telecom operators, pharmaceutical companies etc. Also, it is unsurpassable for customer relationship management and customer recruitment and is good for all below the line activities. Also, it is very cost effective.

In the new age, with so many more media to choose from, advertising itself is undergoing a huge change. What do you see happening to the world of ad agencies?
I see a lot of aggressive recruitment (read: poaching) happening in the ad world as that will be the only way to get market intelligence. Media agencies, whose services were undervalued so far, will put their cut-through innovations in media handling at a premium. Also, commissions and profit percentages are out and advertising and media services will be much more fee-based. There will be a lot of battling on price, shaving the margins further and the survival of agencies will depend on two things - ability to control the media and ability to innovate to find the right path of using the various channels of communication.

What should smart ad agencies do to cope with the changing scenario? What will be the challenges they must gear up for?
First, they should change their organisational structure-if they have not already-to include channel specialists and technical specialists as well the branding experts. And they need to recruit a super-planner for the brand who will hold together and oversee all these three divisions of the new integrated agency. An advertising agency now only has to know about branding, but also has to learn the technical side and the consumer interface side of it.