How have client agency relationships changed?
Clients have started demanding more accountability. There is a paradigm shift from the old order where ad agencies used to do things just because it was nice to do them. At present, the emphasis is on anticipating the needs of the clients in advance and counselling them much before the client teams start thinking on the issue. The key is to be one step ahead of the client.

Clients are under pressure due to cut-throat competition and the pressures of short term gains (sales, results). Clients, therefore, expect partners to be more proactive and act like true partners rather than merely brand custodians. Ad agencies are no longer delivery channels for media or creative services. Clients have appreciated those client servicing teams that have kept in touch with the consumer - whether it is conducting regular visits to the market or getting new consumer insights or leveraging insights from one field and applying it to another one. More and more clients have seen value in the specially created account planning and management teams, reposing full faith in them.

In recent times, some savvy clients have realised that a short-term approach and focus doesn't augur well for them in the long run; and short cut methods to push volumes are detrimental. There is a perceptible shift from an excess of sales promotions and value propositions towards brand proposition.

Many of them have realised that their true assets are the band valuations and this has led them to embrace brand building activities in order to increase vitality. They have sought to strike a balance between quarterly targets and long term goals.

Why do you feel the the creation of a media independent is detrimental?
The consolidation of media agencies that happened in the last year is a continuation of the process which was initiated by Carat in 1999. In this age of obtaining operational efficiencies, integration is bound to happen.

However, I am a firm believer that the separation of the media function and the creation of media independents is counter-productive. I feel that the separation doesn't augur well from a macro-level approach. Surely, the process of strategising and developing good advertising will benefit when the different constituents (strategic account planners, client servicing, media, creative) come together and work in unison. A lot of value is derived in this synergistic approach when a cross-functional team gets together.

Some of the best Indian advertising has been created using this kind of an approach and during the joint brain storming sessions. Ad agencies will have to keep a close watch on this tendency to create distinct walls which might hamper communication and flow of knowledge between the divisions.

Often, creative teams developed innovations during their discussions with the media executives. There is a danger that creative teams will get alienated and will not be well-versed in media. The quality and quantity of innovations could take a hit. Such erosion must be prevented. I feel that certain qualitative aspects have been sacrificed.

It would be difficult to ascertain the exact quantum of loss but yes, there is a loss of impact.

Having said that, clients have seen a lot of value from associating with media independents as long as there is a synergistic approach and close coordination between the various teams.

Do you feel that the industry constituents have put the issue of newer modes of remuneration on the back burner?
Remuneration has three dimensions - the pure commission that is dependent on media spends; the fee-based structure; and the incentive structure which co-exists with the above two.

There is a greater tendency to shift towards the fee-based model because it is assured revenue for the agency. In this case, agencies don't have to depend on the increased spends by clients. Also, agencies will get an opportunity to use the monies for making higher investments in people and practices. Clients, too, will benefit from the same.

However, I feel that ad agencies haven't made a full-fledged attempt to educate clients about the advantages of the fee-based and incentive-based models. There has been a distinct lack of maturity at the client's end and agency's end in tackling the remuneration models. There have been efforts but not many have had the guts to arrive at a conclusion. People have taken refuge in decades old systems.

However, I agree that the process is a sensitive and time-consuming one and could lead to some cantankerous situations. Not many people would have the time to pursue it in the midst of hectic schedules and other time-bound deliverables. The process being time consuming, it is also possible that it would come at the expense of the brand's communication needs.

Also, there is a lot of uncertainty about the new remuneration models and ad agency personnel want to be sure before they jump onto the bandwagon. There are other sensitivity issues in the client-agency relationship which need to be addressed. For instance, a demanding client wouldn't like some junior executive to handle a small but important project; at the same time wouldn't be keen to pay the fees charged by a senior resource.

Indian ad industry professionals have preferred to take the safer route and postponed tackling these issues to a later date. But, I am sure that it will be taken up in real earnest at some point.

What do you feel about the debate over the service tax issue?
As far as the service tax is concerned, the ad industry has taken a stand that it is an issue which has to be sorted out between the broadcaster and the client. Ideally, it has to be borne by either the broadcasters or the clients because the rates are negotiated from time to time; and keep changing.

The ad industry won't be able to bear this burden in this age of depressed margins. In several cases, the eight per cent increase is roughly three to four times that of the margins that agencies earn.

What is it that drives Lowe to the heights of excellence?
At Lowe, we have a worldwide mandate - you can call it a motto, slogan, philosophy, credo, value or mission statement. "Creativity Pays"! Everything that we do has to be in sync with this statement.

Across all our divisions, there is a realisation that, ultimately, we must adhere and restrict ourselves to the above. At Lowe, there is an innate and ongoing effort to align everyone's way of thinking (mindset) to the above mentioned objective. The emphasis is on breakthrough creative products inspired/backed by sound strategic inputs; and those that will surely deliver results and work for the clients. The balance has to be achieved and the creative product must be an offshoot of strong strategic logic - not vice versa. Both these aspects must be followed by effective implementation.

The mantra at Lowe would be "sound strategic thinking", "breakthrough creatives" and "effective implementation" to deliver value for clients. The challenge is to ensure that all the three variables work hand in hand and within the specified time frame.

Clients value and pay for the high standards set by those agencies which deliver goods based on the above mentioned lines.

What are the new business gains for Lowe over the past year or so?
Lowe has bagged Rs 1 billion worth of new business in the last six months. We have just bagged a new Bajaj Auto brand that will be launched in July. We are looking at 30 per cent growth in this year and we feel that it is attainable. The initial signs have been positive.

We are also constantly on the look out for small medium clients who have the potential to grow and become big. One such example would be Camlin - a respected company which has huge potential. We have won the mandate for Hansa Plastic - a Germany based company; Population Services International Foundation; Dalmia group and Dabur. There is a misconception that Lowe doesn't take on small-mid sized clients. We are happy to deal with different levels of the spectrum as long it is remunerative and profitable. We wouldn't want to expend disproportionate resources on an account which doesn't give us enough monies. Similarly, we wouldn't mind expending senior resources on a small account which has the potential to grow and yield increased revenues. The agenda is to partner those clients which aspire to become big. We shall never say no to an ambitious client.

Over the last few years, the Delhi market has grown phenomenally and today, it is the largest contributor to the Lowe kitty. Bangalore and Chennai offices witnessed remarkable growth in the 1990s but have not been able to replicate that success post 2000. Mumbai continues to be the second largest contributor and also accounts for Pune. Kolkata is stable while Ahmedabad seems to be growing at a furious pace. We have a small branch office in Hyderabad looking after the Idea cellular business. There aren't many large business houses with an interest in the Hyderabad market. If any of our clients express interest in undertaking a major exercise in the region, we have the requisite capabilities to scale up operations.

Has Lowe benefitted from Indian clients or from network clients?
We have gained a lot from Indian clients (some of them are MNCs) who have grown more as compared to our network clients. Some examples would be Bajaj Auto, Britannia, LG Electronics, ICICI and Idea Cellular. Some of our regular network clients such as HLL, J&J, HSBC and Nestle have also contributed to our growth. I feel that the FMCG sector will rebound because it has been subdued since the last three years or so. There is a correction which is bound to happen. Although it is an issue now, conflicts won't necessarily be an issue in the next five years or so.

Did you undertake any restructuring after taking charge?
Nothing major but we constantly relook at our operations with an intent of making things smooth. We have evolved this method of single point responsibility for each strategic business unit. For every branch, there is a separate person responsible for the business development teams; the account management teams; the client servicing teams. Similarly, there is a group creative director who is responsible for the creative cells.

Santosh Sood is solely responsible for the Delhi office. Sandeep Puri, who used to be at par with Sood, has now been promoted and is handling the Unilever operations in Indonesia. Similarly, Priti Masoli has independent charge of the Bangalore office. We have taken on a very senior person Anand Bharadwaj to head the Unilever business. Four divisions report to Bharadwaj directly.

Why is Lowe so low profile despite the fact that it has been notching up business gains?
We believe that a true professional lets his achievements do the talking. Clients come to us because of our brand personality. Our work speaks for itself and the industry recognises our work. We don't have to go shouting about our exploits from the roof tops. Our industry is such that people know about us and the brand is very popular. Recent studies have confirmed this aspect of Lowe.

We don't believe in undertaking a public relations campaign unnecessarily because the "halo effect" can be detrimental at times. Sometimes, it can even go beyond the immediate constituencies. Client requirement will always be our top priority and we get a lot of referral clients. Chest thumping may be good in the short term but doesn't benefit one in the long run.

The key areas on which we need to work include: consumer insights and strategic planning in a rapidly changing scenario. There is need for a greater effort and contribution in this field. I don't think we have reached our pinnacle. Also, the creative product has to look, feel good and simultaneously deliver results for clients. The quality of creative and strategic inputs has to increase. Only then can we aim to be high up on the client's mind.

What are your views on the traditional and new media platforms?
The focus continues to be on TV and print. The media has not yet recognised the true potential of radio in terms of its ability to get repeat messages or penetration or interactivity.

There is a lot of hype about the Internet but I don't see it becoming very big in the near future for most categories. However, in certain other categories such as financial, the Net has been very effective. The Indian ad industry has yet to fully understand the medium of Internet. There has been very little innovation. We have been working with clients such as Rediff.com in order to get a better understanding. It will take a long, long time for the Net to grab five to six per cent of the total ad pie.

As far as SMS is concerned, the irritation factor could arrest growth. Consumers might want to block off marketing messages. A lot of research has to be conducted on its efficacy for instance it could be a good tool during brand launches.

Do you watch television?
I watch a fair amount of television. I make it a point to regularly watch the popular soap operas - Kyunki Saas Bhi Kabhi Bahu Thi and Kahaani Ghar Ghar Ki. I love the slapstick comedies of SAB TV.

I watch a lot of news - I feel that there is very little to differentiate between the news channels. It will take a long time for viewers to decide which one to trust. Leaders such as Aaj Tak will have a natural advantage and will score over the rest. NDTV will gain eventually because it has quality.

Post-CAS, the smaller channels will get affected badly as the consumer might overrule them in favour of the big ones or bundles. Bigger pay channels will face a challenge in terms of reduced viewership and lesser revenues. Yes, fresh a relook and renegotiations will be commonplace.