I just want to prove that Contract was not a fluke.

Subhash Ghoshal's protégé; a creative person's worst critic and closest ally; the philosopher in the adman's garb… Ram Sehgal means many things to many people in the ad industry. However, he is best known for making a powerhouse out of HTA's second agency, Contract Advertising, by going against the very grain of HTA culture. Which is why his decision to quit Contract came as a surprise to many. And even more eyebrows were raised when Sehgal subsequently joined the 'not-so-hot' Everest Integrated Communications as its managing director in August 2000. In an exclusive interview with N. Shatrujeet of agencyfaqs!, Sehgal tells how and why Contract happened. And how and why Everest and Digen Verma are 'happening' in Indian advertising.

Edited Excerpts

The story behind Digen is that following the pitch for Frooti in November last year - which we won - we saw an inherent problem with Frooti. When Frooti was first launched, there was a glamour attached to tetrapacking. It was seen as trendy, so the brand became quite popular. Soon thereafter, the cola wave happened, which changed the whole ballgame. The colas spent huge amounts of money and attracted all age groups of consumers. The result that while the kids who drank Frooti grew up, Frooti did not. And Frooti lost its connect with the teens, who were now attracted to colas.

We realized that we did not have the resources to match the colas. The colas were using celebrities, who were very expensive. However, our research in colleges showed that, no matter which year students are in, there's always one 'model student' that everyone talks about. Like, for instance, 'Hey, have you heard of this guy five years ago… woh bada dada tha.' He is five years senior to you, and he's no longer in college, yet, everyone keeps talking about him. Every college has a legend students hold in awe and try to emulate. He is a celebrity in his own right.

We said, why not create our own celebrity - one whom teenagers can be friendly with, try to emulate et cetera. That's the idea behind Digen Verma. And the idea just caught on. For example, over 150 radio anchors were called by different people and asked to play songs for Digen Verma. And it wasn't just consumers. Six portals approached us to run promotions on Digen Verma. We got people talking about Digen. We got a lot of publicity from very unexpected sources. I'd say we got 60 per cent of publicity for free. It shows that the idea was working.

Yes, we certainly anticipated a certain degree of disappointment. And therefore, the next phase of the campaign, which will soon unfold. It will take care of the disappointment. We have everything planned for the next 18 months. We knew there would be some disappointment, as we had done pretests. And we know what to do to counter it. Soon, the campaign will become larger-than-life… it will stand for certain causes. I am sure that in recent times, this is one of the biggest branding exercises seen in this country.

The reason why I moved out of Contract was that I had completed my tenure there, and I felt that somebody else needed to take on my job. After all, I had been there for 16 years. I think that I had achieved whatever I had set out to achieve for Contract, and I felt that I should move out. And had decided quite some time ago that when I turned 60, I'd quit.

Actually, at that point, I didn't intend to work at all. Advertising was the last thing on my mind. I am in the process of writing a book, which has been picked by HarperCollins. It's titled Small World, and explores cross-cultural influences and the universality of man. Anyway, my intention was to move to Pondicherry and write this book there. But when Martin (Sir Martin Sorrel) heard that I had retired, he called me to London and told me that he has just bought this company, Y&R. He told me that he'd like to have me on the Board of Rediffusion as well as Everest, and drive the company in India. And when I came back here after a holiday, I discovered that Martin had already spoken to Arun (Nanda), and I had been appointed.

I chose to sit and work out of Everest because I realized that this agency needed more of my inputs, although I work for the Group. Here, I am actually driving the business, recruiting people et cetera.

I am working on that too.

The simple reason why Subhash Ghoshal created Contract was to handle conflicting accounts. However, what I did was to learn from the past experiences of other second agencies. Mudra, O&M… almost every big agency had floated a second agency. Even HTA had Contract Advertising & Promotions. What I did was analyze what the reasons for the failure of all these second agencies were.

I then created a blueprint of how Contract should be. And I told the Board of Directors to either approve my plan, or leave me out of this project. In fact, I was still running HTA, Delhi, when I presented the blueprint. I made it very clear that I needed four week to start the job. I told them the dos and don'ts. And interestingly, that document of mine became the norm at JWT for assessing all their second agencies.

What I said in my blueprint was that, no matter what, Contract was to get complete independence from HTA. HTA should not know what we are doing, and we are not interested in knowing what HTA was doing. There were certain mandates that I had set - things like we will not pinch HTA's business and people and it will not pinch ours. But in the marketplace, HTA cannot stop me from competing in a pitch. And if I'm pitching for a business that is in conflict with one of HTA's existing businesses, it cannot tell me that its client is unhappy - that is HTA's problem. I was clear that I did not want any interlink between the two agencies. So I did my own media, my own finance… I was adamant that HTA would not interfere in any way. The principle was complete independence.

I think the reason was very simple - these second agencies had chief executives who had been seconded from their primary agencies. I admit I too had come from HTA, but what I am saying is that, somehow, these agency heads were almost always on the defensive. Take Lintas… Karishma was not a well-known agency, so these guys used to carry a Lintas card and say 'I'm actually a Lintas employee'. The day I joined Contract, I destroyed all my HTA cards and used only Contract cards. I figured that if I don't have pride in Contract, how am I to expect any from my team. The person who heads a company must have a sense of belonging to the organization. It's a psychological thing.

Secondly, there was a lot of interference from the mother agency, and the two agencies treated themselves as extensions of one another. For instance, often the mother agency used to pitch for businesses that the second agency had no hopes of winning by itself. One of the don'ts I mentioned in my blueprint was that I do not want one phone call from HTA saying so-and-so client is available. I don't want references. Because, the moment you refer a client who comes to you - and whom you cannot handle - to me, he'd think you are sending him to a second-class agency. That's not the way clients like doing business. They want to go by choice. So we didn't want recommendations.

Yet another problem was that there was no chance for any pride being built within these second agencies. Because the second agencies were all the time depending on Big Brother coming and helping them, young talent was never being attracted. The reason why we did things quite differently from what HTA did was because if we did the same things, we'd be another HTA. And who wants another HTA?

What I did was that I mapped all the agencies that were around at that time… strong on strategy, weak on creative and vice versa. What I found was there were only two types of agencies - the creative ones and the planning-driven ones. And there was a huge gap in the middle, a clear position available for an agency that balanced creative and strategy. So I focused on creating a huge strategic department, while simultaneously getting the best creative minds into Contract. I was certain that I did not want to have a creative boutique. There were two or three people who had come on board and wanted Contract to be a creative boutique. I told them they were free to leave because that was not my vision for the agency. I wanted to fill that big gap.

Another thing was creating a sense of pride within the agency. So we started direct marketing, got lots of new businesses, did sparkling work… The idea was to create a family that everyone would be proud to belong to. My simple mission statement was that Contract should be the most admired agency in India. Not big, not No. 1, not revenue-driven, but the most admired.

Strangely, at the time I moved from HTA to Contract, people said the same thing - because, at that time, Contract was dying. My learning, since my Contract days, has been that if you can inspire people, you can change things overnight. Of course everyone said Everest is dead. My challenge is to disprove that.

One year. But I think it is already beginning to happen very rapidly. For example, I've recruited 30-40 very talented people. This year, we'll grow by about 40 per cent, doing about Rs 120 crore. Then we've become leaner in the sense there has been some pruning. The creative product has improved vastly. You've seen what we did with Frooti. And over the coming weeks, there's more that will be visible.

The change that has happened can be assessed by the fact that when I came here, I felt a strong sense of helplessness. My first objective was to transform that helplessness into hope. Which I think I have managed. People are more energetic, they are working late, more business is coming in and our existing clients are spending more. In the first quarter, we made as much profit as we made for the whole year two years ago.

My next objective is converting hope into pride. And that's happening too. I am flooded with applications from creatives and account managers. I have had three film producers in this room asking for an arrangement whereby they will do all our films. So, I think even the pride has crept in. And that is the principle I am trying to establish. You have to inspire people and show that you have faith in them. Milind Dhaimade, the man who made Digen, has been with Everest for eight years. And the day I joined, I was told that he has submitted his resignation. When I spoke to him, he said he was tired. Now it's two-and-a-half months since Digen happened. Milind is happy, I think.

I just want to prove that Contract was not a fluke.

The focus of today's environment, as against the prevailing environment in the 1980s, has changed. At that time, there was still some room for uncreative agencies. Today, there is none. Which is why you see all the effort even HTA is making at creativity. Today, the environment has unbundled itself completely. Media is going to MindShare, so nobody is looking at you as a specialist for media. Events have gone to event management companies, direct marketing to DM specialists. And the biggest competition to strategic planners is the McKinseys of this world. So what is left? The core thing that McKinsey and Andersen cannot give is ideas. At that time it was a luxury when a client said, 'Kuch creative karo.' Today, it is essential for survival.

Today clients demand big ideas. Advertising is basically going back to its roots - ideas. And the focus for Everest is big ideas that surprise the consumer.