Ad Agencies in India Advised to Wake Up

Indian advertising agencies need to wake up to the challenges posed by global economic trends and emerging interactive technologies like the Internet, according to speakers at a two-day convention in Chennai.

The conference, called “Advertising’s Future Shock,” was inspired by the business strategy book Competing for the Future, co-authored by Chennai native and University of Michigan professor C.K. Prahalad, according to InternetNews.com correspondent Madanmohan Rao in India.

Prahalad said Indian companies need to pay attention to characteristics of the new economy like open standards, digitalization, and volatility, as Internet- based communication offers “tremendous new opportunities for Indian companies via media convergence and re-intermediation.”

This also requires Indian advertising agencies to pay attention to the importance of online market research, since new media like the Net are bound to affect people’s perceptions of advertising, according to Nigel Hollis, group research and development director at Connecticut-based Millward Brown International.

He said more money is spent on market research in the U.S. than anywhere else, for sectors ranging from retail outlets to Web sites and users. “Our research has shown that interstitial Web ads can sometimes score twice better than TV ads,” he said.

Furthermore, the Internet is one of the “most wonderful ways” to get and distribute information, according to Shunu Sen, CEO of Quadra Advisory Private Limited. “But the Net user base is still small in India, and hence it is not yet on the radar screen of Indian ad agencies.” India has an estimated 150,000 Internet users, but may have as many as 8 million by the year 2002, thanks to a newly liberalized ISP policy.

“The challenge for Indian advertising agencies in the coming years is to be able to target the rural market as well as the sophisticated urban market who may have Internet access,” said Kiran Khalap, CEO of Bates Clarion, which he claimed was one of the first ad agencies in India to set up an Internet presence.

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