He seems to be an ardent admirer of "glasnost" and "perestroika"! Nothing demonstrates this better than the fact that his office cabin doesn't have any walls or even a door! Leo Burnett India chairman and chief executive Arvind Sharma is at perfect harmony with himself and his highly motivated team at the sprawling new Leo Burnett office in central Mumbai.

The office has the look of a seamless multiplex with ample spaces and a typical "attitude"! The only thing that remains constant is the presence of apples (part of Leo Burnett folklore) in the reception and just about any other place.

Armed with a management degree from IIM Ahmedabad, Sharma spent his first couple of years in marketing at Voltas. He joined advertising in 1979 at Clarion McCann and later on moved to Chaitra in 1983 as an account director. In 2002, Sharma was elevated as the chairman and CE and given additional responsibilities of looking after Burnett's interests in the neighbouring countries. He also had a role to play in the creation of the agency's second network in India in association with Dentsu - Orchard Advertising and the agency's media arm Starcom.

Under Sharma's leadership, the agency transformed itself rapidly and crossed the Rs 35 billion turnover mark. Sharma has a passion for innovative planning techniques that help unearth powerful consumer insights for creation of superior advertising. Sharma's paper on innovative techniques for unearthing consumer insights received an award from the Market Research Society of India. Leo Burnett India is one of the most awarded agencies in the country. It is one amongst a select few from India to have won a Lion at the prestigious Cannes festival.

Sharma has served on the executive committees of Advertising Club of Bombay, National Readership Survey Council, Advertising Agencies Association of India and Media Research Users Council. Sharma's other interests include travelling and reading. He spends his rare free weekends at his farm at Alibagh with his wife Poppy - a writer - and children Ishita, 19 and son Akshay, 18.

In a tête-à-tête with indiantelevision.com's Ashwin Kotian, Sharma spoke about his take on the advertising scene for the year 2002-03.

How was the year 2002-03 for the advertising industry in general?
In many ways, the year 2002-03 had a hangover of the year 2001 or rather late 2000-01 which cast its own shadow on the advertising world. The 9/11 incident and the dotcom bust continue to have an impact on sentiments. Actually, poor sentiments are responsible for the pessimism.

In India, uncertain monsoons last year also had an impact on the general slowdown. Some of the stock market scams and other scandals took their toll. However, post the dotcom boom, there was a perceptible change in society in terms of an increased accent on technology and information. The change has been reflected in Indian advertising too.

Several Indian ad agencies started functioning in the same way as their counterparts in the developed nations did. Systems and processes have undergone a sea of change and are in sync with the global norms. Even the creative output is getting better; and more result-oriented!

Also, Indian ad agency "stars" were placed in key markets abroad. In fact, talented people from Leo Burnett India are playing key roles in developed markets in the Leo Burnett network right from Chicago to Singapore.

How did Leo Burnett fare in 2002-03?
Leo Burnett India reinforced its position as one of the top 10 agencies in India and operates through 300 advertising professionals in three strong offices across the country - Mumbai, Delhi and Bangalore.

Though facetious as it may seem, our mission in India is to be the most sought after agency in the minds of Indian advertisers, advertising talent and fraternity, by delivering brand miracles consistently. We feel passionately about it and believe this is possible with an endless stream of ideas rooted in an uncanny human understanding.

In the last few years we added global accounts such as Coca-Cola, Fiat, Heinz, Kellogg, Pillsbury, Hallmark and Toyota and prestigious local accounts such as Bajaj Auto, Dabur, Godrej. Leo Burnett India's creative product has received global acclaim across all the major international advertising award festivals. Leo Burnett is one of two agencies to have a Cannes lion.

Leo Burnett India has acquired a reputation for turning around brands - Bajaj motorcycles, Thums Up, Coca-Cola being some of the best known examples. In 2002-03, we reaped the benefits of clients gain conversions which happened in the later part of 2001.

In fact, Leo Burnett grew by 10 per cent despite difficult conditions due to new business acquisition as well as the increased spends by some of our larger clients. We added clients such as South African Breweries, Kelloggs and did some pathbreaking work for the new models of Fiat India.

Our subsidiary Orchard gained considerably due to new Toyota model launches (Qualis and Corolla). We did some exceptionally brilliant work for Thums Up which had an incredible year - the first after 1996. The ORG MARG figures for December 2002 showed that the brand had climbed back to its numero uno position. Through our international affiliations, we managed to get a part of Philips and Whisper.

What is philosophy that helps Leo Burnett grow from strength to strength ?
There are some mantras which we constantly follow:

Focus: Our entire turnover comes from having a select number of clients. Having a limited number of clients allows the senior management to pay full and proper attention to all clients. This also allows us to unleash the power of the agency - provide inputs on all brands that we handle.

Precision consumer mapping: In the last eight years, Indian society has seen more changes than what it saw in several centuries before it. Attitudes, beliefs and norms have been changing not by the year but by the day. Rising competition in the market and increasing business risk makes it imperative to understand the consumer's mindset accurately.

The brand-planning department at Leo Burnett India uses proprietary research techniques such as IDOL (Involuntary Disclosure of Life Concept), Illusory, Hot Buttons, Blurbs, MBTI, Identitikit, Values Analysis and others to come up with potent consumer insights.

The ideas culture: Leo Burnett India has perfected psychometric testing to recruit / select exceptionally ideas-fluent people. We are also perhaps the only agency that trains its people formally in ideas management.

360-degree solutions: A firm believer in integrated marketing, we believe that mass media advertising alone in this era of media proliferation can't unleash the total potential of the brand. Hence, we provide a total gamut of services to our clients through own investments, JVs and alliances.

Ground activation and consumer / trade relationship management - Leo Activation (a division); Brand planning and advertising - Leo Burnett; Media relationship management - Sampark (an alliance); Media planning and buying - Starcom India (one of the top media planning & buying houses in the country, fully owned by our parent group Publicis Groupe); Solutions for the entertainment industry in India - Leo Entertainment (a division).

In fact, Leo Entertainment is the only outfit of this nature that provides professional communications and brand building services to the vast entertainment industry of India.

Our unique understanding of customers and the processes we follow have helped to build many brands in India. Some good examples would be Ariel, Thums Up, Kawasaki Bajaj Caliber, Complan, Pillsbury, Hitachi air conditioners, Fiat Palio and more.

Have client-agency relationships changed in 2002-03?
Last year was a year of "caution" as far as clients were concerned. In the early part of 2000-01, the regulatory body SEBI (Securities and Exchange Board of India) introduced and insisted on quarterly disclosures. This put additional pressure on the clients - especially the publicly listed companies. This also led to a greater emphasis on accountability - in fact a new dimension was added to the accountability factor in client-agency relationships.

There was greater emphasis on short term gains and goals. In fact, the clients actually questioned the efficacy of those agencies which couldn't even deliver these short-term goals. The positive element was that clients had no qualms about roping in ad agencies as their partners. Agencies accepted the challenge to deliver results and live upto client expectations.

Also, every agency realized the importance of shorter time frames and deadlines. This changed the entire orientation of the way in which ad agencies functioned. There was a constant effort continued drive to seek efficiencies in every arena - be it media or creative or servicing.

Some clients also switched exclusively to media specialist agencies. Clients were not willing to sit back and take anything that the agencies threw at them. There was an ardent desire to cut costs and obtain value for every advertising buck.

Clients were searching for customized solutions which broke through the clutter. Several of them realized the need for offbeat strategies based on sound reasoning and backed by research insights. Those who placed bets on their own beliefs, capabilities and acted with conviction were the ones who saw growth. One of our clients Fiat India saw some impressive growth in the sales of its latest offering Palio primarily due to the use of multiple media platforms in its media mix. Bajaj Auto used it marketing muscle and launched a slew of products - the low priced BOXER and the Eliminator and Pulsar in the premium range.

What were the optional revenue streams available for agencies in lieu of the pressure on the traditional commission-based system?
In recent years, clients have been questioning everything including the 15 per cent agency commission. Earlier, the sacrosanct 15 per cent commission was something which was always taken for granted by most agencies. In the last year, clients took up this matter, discussed it and put it under further scrutiny.

Each client had its own way of evaluation based on their beliefs and views. Clients had different methods to evaluate the contribution made by agencies; they also evaluated the kind of support which they sought from their agency; the profile of the agency personnel they wanted to work with so on and so forth.

Actually, media reports err when they say that clients have been cutting agency compensations. In fact, clients are merely seeking clarifications on the accountability factor and demanding better value for money. Some of them have no qualms about using media specialist agencies and taking care of their own creatives.

Agencies have to react in order to grow in these difficult circumstances. Personally, I feel that agencies converted the adversity into opportunity. Some new revenue streams were added by all agencies as seen in some of the new divisions which sprouted. However, these moves have reaped dividends as clients have accepted that these new divisions bring value.

Which sectors which grew in the last year?
In the year 2003-03, growth in certain sectors happened primarily due to the aggressive postures and initiatives adopted by individual players. There were some sectors which saw tremendous growth - for instance the telecom and the financial sector.

In the financial sector there was a lot of action in terms of the new private sector insurance entrants; the new instruments; budgetary benefits for certain debt funds and mutual funds; derivatives trading.

There is a buzz around healthcare but I feel that the changes aren't as dramatic as what is being touted around. The entry of large MNCs in the healthcare segment hasn't taken off and the existing giants didn't increase their ad spends. Of course, the current budget (2003-04) has taken cognizance of the potential of the healthcare and pharma sector - but personally I feel that the gains won't get capitalized even in 2003. Having said that, I would still admit that there is considerable potential for growth and a tremendous opportunity to improve healthcare infrastructure and facilities in the country. The ad agencies will play an important role.

FMCGs still dominate the proceedings in a big way. However, the market for the FMCG players was tough and only those who dared to try different things emerged victorious.

There was selective growth in consumer durables - in fact the air conditioner, AC, market grew dramatically. In the case of TV sets, the demand was lacklustre.

Has the share of below the line activities increased?
Our divisions Leo Activation and Leo Entertainment performed really well. In fact, the share of below-the-line activities increased as compared to 2001-02 when it was all about discounts and freebies. However, clients realized that these umpteen freebies didn't help grow the brand equity nor did they hike up the brand volumes.

The short term focus which I mentioned earlier also increased the focus on below-the-line-activities. More importantly, there was a general buzz and excitement around the promotions. Also, ad agencies and clients jointly formulated and came up with some great ideas such as acquiring media properties in lieu of long-term gains. Eventually, the share of below-the-line activities will increase in the years to come.

What does the future have in store?
The 2003-04 budget has set the right tone and pace for growth. It has paved the way for creating opportunities. The fundamentals are positive but the clouds of war might affect the sentiments. Oil price rises will definitely not help. The Indian markets are linked to a certain degree to the global markets. Everything depends on the monsoons and good monsoons will spur consumer demand.

Clients and agencies need to think differently and think smarter. Client budgets will be impacted due to the three per cent increase in service tax. When the going gets tough, the tough get going! I would imagine that those clients who have the conviction to do things/think differently and back their ad agencies will usher in growth.

What are the personal challenges that you would look forward to?
I am passionate about creativity and look forward to creating pathbreaking work on different brands. Over the last six seven years, there has been a strong improvement in the creative output. The creative elements have also incorporated the client's perspectives - short term results, sales-driven focus so on and so forth.

The challenge is to sustain the trend and lend greater force to accelerate the process. Clients have also realized the value and importance of good creative work which can break through the clutter.

Also read
The biggest agencies don't necessarily produce the best ideas - an interview with Leo Burnett subsidiary Starcom's MD (West and South) Ravi Kiran