These haven't been the best of times for the $5.8-billion (Rs 25,520-crore) Interpublic Group, the New York-based advertising conglomerate, which has four operating divisions comprising McCann-Erickson WorldGroup, FCB Group, the Partnership, and the Constituency Management Group. Last October, its Universal McCann lost a significant part of the $1.5-billion (Rs 6,600-crore) Nestlé account to Group M (of rival WPP) and ZenithOptiMedia (of Publicis Groupe), and barely three weeks later, the $1.25-billion (Rs 5,500-crore) Unilever account was snatched away by WPP. Rattled by the loss of two top-drawer accounts (Interpublic's Initiative Media had handled Unilever for 15 years), Interpublic's board announced changes in top management responsibilities around the middle of this January. Chairman Michael Roth assumed the additional role of CEO from David Bell, who was redesignated Co-chairman and given the twin responsibilities of building on key customer relationships and pushing organic growth. Recently in India, Bell, 61, a self-confessed Indophile, spoke to BT's Abir Pal on the issues facing Interpublic and plans for India. Excerpts:

What brings you to India this time-your 10th visit?

A lot of things. I'm an Indophile. I like the people, the energy, the entrepreneurial spirit, the pace of change... this is a place where creativity happens. But what I've seen recently is that we're about to capitalise on the promise that's been talked about for 10 years now. In the beginning, it was a lot of talk, a lot of excitement. Then there was a gold rush, with everybody rushing in. But now it feels like it's real and ready to take off. Interpublic in India has some great groups-FCB Ulka, McCann-Erickson and Lintas. All of them have great ability to deliver holistic marketing and entrepreneurial energy. The reason I am here is to bring the family together; to talk about how to gain disproportionate share as we go forward.

How have you seen the Indian advertising space change over the years?

First of all, the India creative scene has come a long way. I think there are much more ideas in the commercials, in addition to the information. I think the art direction has gone up. In terms of the creation, there's much more ideation around holistic marketing today than there was earlier. I think that only portends well for Indian businesses as they experience growth.

As far as the global advertising market goes, what's your forecast for 2005? After a couple of very rough years, has the much-awaited turnaround on Madison Avenue begun?

Well, we certainly see some buoyancy that we hadn't seen for quite a number of years. One of the things that has delayed the turnaround globally is what I would describe as media chaos. Chaos in terms of the number of new choices, the number of new media, and the lack of certainty in terms of some clients, i.e. where to put the bets. I think that's beginning to sort; the media are beginning to find their place coming out of a slow period, and I think we will see some pickup. Whether 2005 has it or whether that needs to go into 2006 remains to be seen, but it certainly is better than what we've seen in the last few years.

Moving on to your group specifically, you were brought in two years back to turn around Interpublic. How do you view the progress?

Good. We had said that the turnaround would take 24-36 months because there were a number of issues. The two metrics that we said would tell you when the turnaround was complete were: a) return Interpublic to peer group operating margins and b) peer group organic growth. That's part of what the turnaround involved-retroactively putting in place an infrastructure that would allow us to be streamlined, and controls that a modern multinational should have. We were also in the process of changing from an acquisition culture to an organic growth culture. On the organic growth front, we've put in place a number of things that have helped us. When we started focussing on organic growth, we were at -6.5 per cent (organic growth); last quarter we were 1.8 per cent. We're beginning to close the delta on our competitors. On the margin front, there are four large initiatives that are underway that will help restore those margins. In the second half of our turnover, our focus obviously will be on growth. That's what brings me to India.

"We had a lot of silos, but now we want to have strong brands and the ability to move together"

Looking back, what went wrong and what are the learnings that will influence Interpublic's future strategies?

Interpublic, as you know, was the leader for a very long time. The issue that we faced in the turnaround is several-fold. One, the company made 300 acquisitions in the late 90's. This outstripped the infrastructure. We had an acquisition culture and not enough organic growth. We are shifting from that kind of culture to a culture where the businesses are fiercely independent and strong. That said, companies within our family are also fiercely interdependent when it makes sense for growth and major clients. So, we had a lot of silos, and where we want to go now is to have very, very strong brands and the ability as a whole to move together when it makes sense to move together.

How important are Asian markets and specifically India in your global scheme of things, and what are your plans for growth in these markets?

Well, the Goldman Sachs report on bric markets has raised everybody's attention, though we were always focussed on the opportunity in India long before that. I believe that India will gain disproportionately because it is a knowledge-based society. It has the advantage of having English being spoken and also the advantage of being a democracy. But there are two other parts to the heritage that we believe will contribute strongly to its growth. The fact that it has a strong history of scientific base, but it also has the creation. There is a very strong and robust Bollywood. I mean, the entertainment industry and our industry are partners; they go together and I believe that the creative excellence of India will continue to soar.

Talking specifically of India, many say that compared to the other international communication powerhouses such as WPP, Interpublic still lacks a focussed and aggressive strategy for developing markets.

I think that your statement would be accurate. But no one can deny that our three groups individually have been extraordinarily aggressive. So if the question is, has Interpublic as a group been aggressive, then yes, our groups have been. But has Interpublic itself been visible and touting its aggressiveness, then no. Having said that if you look at what has transpired in our three groups in India, each one of them in their own way has been extraordinarily aggressive on all fronts.

No, by aggression, I primarily meant successfully capturing market share. WPP has close to 50 per cent, whereas yours is around 18-20 per cent.

We start from a great position, and our focus is on how to build that-the investments that we would need to make. We've signalled India as one of the bets for the future. We have put in place Steven Gatfield who's an executive VP and already been here three times in the last three months.

As far as acquisitions in India go, are you close to finalising any deals? Alternatively, what kind of agency pedigree and size would interest IPG?

Well, we have three very strong brands. We don't discuss our plans publicly except to say that India is a focus market for us and we discuss all kinds of things to get us the kind of share of place we want. If there are opportunities that we see adding strength to the group, we certainly would consider it.

Do you have any plans of consolidating your "media" operations under one arm like WPP has with Group M?

We've said that globally our strategy is to have two strong media brands. In this market we have more and will probably continue to have more. But to have group oversight and combination, that's a logical step we're taking. We're taking it in all kinds of places all over the world. But we will always have two global brands. We can have more in individual markets like India.

"Globally our strategy is to have two strong media brands. We can have more in markets like India"

It is widely acknowledged that Indian advertising is gradually coming into its own. Is this new-found confidence and originality sufficient to become a global player?

In many ways Indian agencies have the ability to become very strong centres of excellence for sure. I think some of the early showings, in some of the global award forums, point to the incredible lift that's occurred in Indian advertising. My belief is that Indian agencies will be able to be strong partners for Indian businesses, as Indian businesses seek to go outside.

Can creative outsourcing emulate the outsourcing success India has had with IT, considering that much of good advertising is grounded in cultural nuances, which often cannot be duplicated across geographies?

There are certain aspects of the production process and other things that have outsourcing possibility. Outsourcing is a word I hate. The word I like is centres of excellence that are shared because it's a very different concept. I am not sure if creative per se can be outsourced, but you can focus on places that have great ability and great capacity and use it more broadly than the local market.

Given the bias towards "integrated agencies", is the time right for another round of global consolidation, with the Big Five or Six getting bigger?

Anybody that has bet against continued consolidation in the last 30 years has made a very bad bet, and I think that the exact thing is true for the future. I think rather than integrated agencies per se, I would prefer to say that every agency brand will need to deliver a holistic offering and they can do it in lots of different ways. They can do it within their own group, they can do it within the Interpublic family, and they can be a stand-alone fully-integrated agency. There are different models for doing it, but every group needs to have the ability to do it. Fortunately, all three of ours in India do.

As far as holding companies go, there is the WPP way, where the identities of individual companies are overshadowed by the holding company, and the Omnicomm way, where they say that the role of the holding company is only to make individual agencies stronger. Which model does IPG subscribe to?

Good question. We believe in a great balance between states' rights and federal rights. We believe in the strength and power of the individual brands as primary service deliverers. Certainly there has been the advent of the holding company as a facilitator or parent that can orchestrate things for major clients. If we had to take these two extremes, then we sit right square in the middle, where we think the sweet spot is.

Global advertising has been going through a lot of changes... the rising share of marketing services, the coming of the internet, below-the-line, as opposed to traditional, advertising, fragmentation of media... What further trends do you see?

One major trend is the move away from sovereignty in every single company in marketing and innovation towards centres of excellence. The major infrastructures that clients could once hold are no longer efficient or affordable. So, there will be centres of excellence in major multinational companies moving forward, and the agency partners will move in the same direction. The shift in balance of power where advertising always takes the lead and non-traditional services follow, will shift in more and more instances. That's a major shift in the business and a major outcome of the holistic planning and thinking. The balance of power is growing in the East compared to the West because of the size of the growth and the size of the opportunity. The other trend certainly is that in the not too distant future, there will be export brands in growth markets like India and China.

Today most creative outfits globally are under the umbrella of large global corporations run by non-creative types, bean counters, if you will. What impact is that having on the quality of creativity and advertising?

I don't think it has changed the face of creativity and advertising at all. This is a business that was, is, and always will be about clients. Agency groups that are public market groups have responsibilities to shareholders. But the creation is done by teams of people and the creation is done by people working within brands and if those are strong, then who's at the top of the agency need not make a difference.