Will ad agencies go head to head with IT cos?

This story first appeared in DNA Money edition on Friday, Apr 12, 2013.

IT companies have some serious competition at hand – from advertising agencies.
 

As ad agencies staff up to deliver increasingly complex, cutting-edge digital content, they have been pushing into what has traditionally been the IT players' turf. Going forward, it isn't entirely unlikely that they will compete for a piece of the same pie with the likes of TCS, Infosys, Cognizant and Wipro, feel industry sources.

“The blurring of lines is going to be a reality, so you might as well be ready for it,” said Madhukar Kamath, group CEO & MD, DDB Mudra Group.
 

Ashish Bhasin, CEO - South East Asia and South Asia and, chairman - India, Aegis Media, couldn't agree more. “It’s like how the IT majors do tech development in their areas globally. There is nothing that prevents advertising companies from doing it as well.”
 

Aegis Media, for one, is putting together a large tech team, including the likes of programmers and net developers.

The agency currently employs 18 people and plans to at least double that number in the next few months to be able to efficiently deliver the digital and mobile communication needs of its existing and future clients.

“If the approach works well, we can easily look at 200 people in the near future. This team will be doing just tech and the business vertical will cater to the global market and not just India,” said Bhasin.

With the digital, social and mobile space significantly influencing the customer's buying decision, corporates today are seeking more meaningful – and innovative – engagement on these platforms.

Ad agencies are therefore required to offer a better combination of creative minds and effective technology to deliver the client's message.

“One can conceive and create a great idea, but delivering it will be impossible if you don’t have an equally great tech team,” said Bhasin.
 

But it's not a one-way street.

Cognizant, for example, has a vertical called Cognizant Interactive, which, the advertising fraternity believes, is very close to what they do for meeting the client's digitial/ mobile advertising and communications needs. The vertical has three key practices – Web Solutions, eLearning, and User Documentation.

“We have over 2,000 professionals with skills in web and creative design, content, and front-end development. The designers play an important role in understanding the customers’ brands, and extending their brand values onto the digital channels and experience,” said Sairaj Vaithilingam, assistant vice-president, Cognizant Interactive.

Clearly, the digital space is not just about putting a banner advertisement on a website anymore. Engaging the consumer, developing applications for smart phones have become an integral part of the process. The game could change further as the cost of devices like the iPad and tablets comes down further.

“People earlier did not think that a large set of consumers will transition from desktops to mobile devices and advertisements were never made keeping mobile devices in mind. This is certainly a huge problem for marketers and brand managers. Advertising agencies will thus have to stay ahead of the curve. Their job is never done, as, by the time they've finished, it's already become obsolete,” Bhasin signed off.