What does India's most powerful media independent have to offer on conditional access; on Sars; on the payouts being made to television producers; on IRS? How does this media powerhouse stay in touch with its customers?

All this and more WPP Marketing Communications CEO South Asia Andre Nair laid on the table in a no-holds-barred conversation with indiantelevision.com's Thomas Abraham, in this the conclusion of a two-part interview.

When we'd spoken last you'd mentioned oil prices internationally and the introduction of VAT domestically as being key issues that will affect this year's business? Well oil prices are down and VAT has been deferred so what is your reading now?
Regarding VAT, remember what I said the last time was - it is going to happen. The government themselves are saying that this is definitely going to happen. It is a more a question of how. The issue is how is it being explained to people, how is the mechanism going to work. There is still little clarity on that which is why you find interests fighting against VAT.

There are a lot or people out there, retailers in particular, who are genuinely clueless as to how they are going to introduce this and what it actually means. This is as much as I can say until there is further clarity.

While oil prices are down the bigger problem is SARS right now. Where are we on this businesswise?
We are back to where we were before the Iraq war. The war just raised a number of questions. We had a war that lasted 30 days and therefore the effects are short term.

As far as SARS is concerned, you look at the situation in Hong Kong and you have to ask yourself how did it hurt business in general? Yes, Hong Kong and Singapore have been badly affected.

Media meets and conferences have been cancelled. Tourism has been hit. Cathay Pacific has a load of 33 per cent after having been voted airline of the year last year. There has been a very severe effect on business as a result of SARS.

I however think that the media coverage was more virulent than the disease itself. Excessive hype has been created around a disease, which while having a high infection rate has a mortality rate as low as three to four per cent. The media just went berserk.

WHO has said that India is SARS free at least for the time being. In India media coverage did not go berserk the way it did elsewhere. This could be because it is not a priority as they have other more important issues to report about. Lets hope nothing drastic happens. We can spend much time contemplating the effect of widespread SARS infection in India but until, God forbid, that happens, such contemplation is useless.

Coming to Mindshare & Maximize themselves, when your scale of operations is so big, how do you stay in touch with the ground? Isn't this a perfect recipe for insensitivity to clients' unique needs? I refer here to smaller clients and not the Pepsi's and Hindustan Lever's.
We are a large organisation and for us the issue is not just staying in touch with our clients but actually servicing our customers to build healthy and enduring relationships. So I would interpret your question of how do I keep in touch with my clients as how do I build and maintain healthy client relationships. It is very important and is one of our strategic priorities for this year.

We do this in a number of ways
Firstly our structure consists of three operating companies. Each company has their own business plans, their own KPIs (key performance indicators). Therefore, since each company has its own distinct character we are not one large faceless organisation.

Secondly, it's a issue of changing mindsets. Client service has always been thought of as a department within an ad agency- the account service department. Client service is not a department. It is part of what we all do in a service industry - as important as the media specialist sector.

To help change that mindset, we have set up a series of training modules on client service.

Training has to come with accountability. So thirdly, our managers have it down in their personal KPIs about building & maintaining healthy client relationships. Their performance is ultimately judged according to the state of the client relationship.

Feedback on the agency's performance and thus the health of the client agency relationship is vital. So instituting appropriate mechanisms to gauge the character of the customer agency relationship is the next step. The customer's point of view on the nature and depth of that relationship is vital. He is the end recipient of that relationship - he has to derive benefit. Therefore the performance of the agency needs to be evaluated.

Some clients have their own format to measure an agency performance and some don't.

For the most part, when a business consolidates, even when a company consolidates, creativity is lost. In the US we've seen it with TV stations and radio stations. Specific to media planning and buying, it becomes all about processes rather than ideas. That extra something that is unique gets lost along the way. Your comment?
When you say that there is a loss of creativity when a business or company consolidates you are making a very flawed and sweeping statement. It is not universal to all consolidated companies and can be true of small companies. A small company with many customers may not have the resources or capacity to handle its clients' needs thus initiating an assembly line approach resulting in a loss of creativity.

The problem of loss of creativity or lack of attention or lack of customisation can exist whether a company is large or small. This is partially the reason, we have three operating companies. Each company is broken down into smaller operating units each having five offices and each office has its own set of clients. In fact, with Mindshare Mumbai, we have two SBU's.

Customisation, customer attention is not something we move off the rack. It is tailor made specifically for each customer and the brand.

Are customer handling mechanisms mainly done through software?
At the end of the day software can only help in certain areas. It can help make someone more efficient. It can help someone cope with administration or someone with numbers.

But you cannot build relationships using software. It is done between people either as individuals or groups. In the marketing communications business respect, ability to work with people is important. It is not just a question of the product.

This is something we are very conscious off which is why we put those feedback mechanisms in place. We cannot run away from the nature of client relationships whether it is excellent, good, average, bad and indifferent.

If it is good then the question is how can we take it to the excellent level. At the end of the day you can never take your customer for granted. That is really a danger. The second the customer feels he is being taken for granted you will know either by evaluation or if he walks out of the door and says "I do not want to work with you".

I would like to bring this discussion to conditional access and its implications. Some broadcasters have expressed fears that post-CAS Mindshare Fulcrum is going to push all advertising off pay channels principally onto DD and Sahara TV. Any comments?
We have never made such a statement nor are we contemplating any such thing. You know as much that is going on with CAS as we do. We are looking at it from the point of view of the implications to our clients' planning & buying and how we manage in a post-CAS era.

We are not making sweeping statements on a situation that is changing almost daily. CAS is a defining moment for the cable and television industry. The 14 July launch will happen.

Enough said as you will shortly get a comprehensive point of view from us.

Keeping to CAS, what is your reading of the scenario with respect to producers? Broadcasters have warned them that since the ad rates will go down they will not be able to continue paying them high fees. What is your reading of the situation?
For some time now the producers have been claiming they are hurting. The broadcasters do not pay them what they would like to be paid. The problem exists and I don't think that CAS is going to have a huge effect on the situation of producers. There is a worldwide rate for programming in different genres and some of the rates in India were well beyond that. I am not against someone making hay while the sun shines but let us get down to today's reality. I think that production houses are in general overpaid.

So are you saying that the cost of programming has actually come down?
Costs of production are certainly not spiralling. If anything, I would say over the last two, three years, they're a bit more organised in terms of how they manage costs and thus how much they charge. Everyone is learning to live with tighter budgets, more demanding channels, though there is lots of software to be produced. Big ones like Balaji operate almost an assembly line schedule and manage to produce a huge number of shows profitably.

And due to economies of scale, for a Balaji, say, costs are certainly not spiralling. This industry has grown to some 2,500 crores (Rs 25 billion). The need for television software is huge. And none of them should be complaining because if anything, they are being paid more through absolute volume rather than any one individual show.

For a channel like, let's say Star, who are demanding a hell of a lot more quality in terms of post-production, finish, etc, and they are willing to pay top dollar. People we've talked to like UTV or Neena Gupta are certainly not complaining. Or take the guys behind this new show Josh. They're being paid 15 lakhs (Rs 1.5 million) per episode, which is a lot of money. Here the channel is going and saying "look guys, if you can perform, we'll give you lots of money for production."