Vikas Tandon is a first generation entrepreneur and runs one of India's leading web development and interactive marketing agencies, called Indigo Consulting. Prior to that, he was working as the head of Mudra Interactive. He also had a stint in the music industry working with Sony Music and Magnasound India. In an email interview with AlooTechie, Tandon shares the story of his entrepreneurial journey and his future plans for Indigo.

You started your career in the music production industry with Magnasound and later with Sony Music. What made you take the leap towards digital media?

Music is my first love and I joined the music business to pursue my passion. But if you are in sales and marketing, as I was, you might as well be in the soaps business. Besides, by then I was beginning to get hooked on to the internet and was particularly fascinated by all the possibilities it threw up for a music lover. So, when the opportunity with Mudra arose, I viewed it as an excellent chance to learn and get into an industry of the future.

Before launching Indigo Consulting, you were working with Mudra Interactive. How did this experience help you in launching Indigo?

Extremely helpful. I learnt about this business because of the opportunity at Mudra. Besides, since my role was to setup and head the division, it also gave me good exposure to all facets of running a business.

Indigo Consulting was launched in 2000, when internet as a marketing medium was not so popular in India. What was your idea behind launching an internet marketing agency in India?

Yes, in fact, it was the beginning of the bust, and many large web development companies which had really expanded their teams, were beginning to feel the heat. Many questioned my decision at the time, but I was completely convinced about one very obvious thing – there may be a churn in the business models, but the internet was not about to die. It would only grow, and as long as people used the internet, there would be a need for an agency like Indigo Consulting to help companies make the most of it to reach their audience. So, it may not be banner advertising, it could take some other form, and all we needed to do was ensure we were ahead of that curve.

What were the initial challenges you had to face while launching the company?

The biggest challenge for a startup is its vulnerability and high mortality risk. For first generation entrepreneurs overcoming that fear is important. The other big challenge was building a team – to attract and convince the best in the business to believe, and share, in your vision; and to create a culture of creativity, fun and professionalism. I consider myself quite lucky to have been able to navigate both challenges.

Tell us something about your clients in India. How many clients do you have in the country and from which verticals?

From the start, Indigo Consulting’s model has been relationship-based. We have believed in partnering with fewer clients across their digital marketing needs, rather than chasing multiple projects. It is a matter of great pride for us that our first client, HSBC, is still with us. At the same time, we have also been successful in scaling this model to now handle multiple such long-term relationships like HDFC Bank, Loop Mobile, Asian Paints and Rentfusion (US).

The BFSI (banking, financial services and insurance) sector has always been among the largest spenders on this medium, even through the downturn, so in the early part of our existence, through some pretty effective work, we managed to develop significant expertise and presence in this segment. However, over the last 2-3 years Indigo Consulting has gained a well-diversified portfolio covering Telecom, Consumer Goods, Travel, Media & Entertainment, and the Social sector.

What kind of services do you provide to your clients? Are you also into social media consulting?

Our services can be classified under five categories -- Think, Design, Build, Market and Measure. This covers understanding business objectives and creating a digital brand, marketing and technology strategies, to designing and building websites, micro-sites, SEO (search engine optimization), campaign creatives, email marketing, mobile applications, and social media marketing.

We have recently launched our User Experience Labs (UX Labs) which comprises a team of Usability and Research specialists. The UX Labs champions the cause of user-centred design and provides user research, expert reviews and usability testing services in the realm of web and mobile design. We are also in the process of launching a couple of other specialist divisions in emerging areas of digital media.

Which of your campaigns have been most noteworthy?

Over the last 10 years, there have been quite a few. Right from the demo we created to promote HSBC’s Internet Banking service launch in 2001, which got HSBC’s Regional team to sit-up and take note of our work and then engage us over many assignments, to work that we did for J&J’s Acuvue lenses to have customers sign-up for a free trial. The health quiz for Tata AIG Life Insurance was also quite successful. The i-blushed.com (http://www.indigo.co.in/showcase/i-blushed/) campaign for the launch of Pond’s White Beauty was really exciting. In recent times, Indigo Consulting has done some award winning work for Asian Paints Colour Next and Kolkata Knight Riders.

At the recently concluded W3 Awards 2009 your work for Kolkata Knight Riders’ website won a Gold award and Asian Paints ColourNext2009 and Chlorophyll won Silver awards. What were the ideas that were executed behind these campaigns?

Any work that Indigo Consulting does is guided by two most important principles -- results-orientation and user-centricity. Results orientation implies being very clear and focussed about the actions or results expected from the exercise. It means converting a brief like “we want a best-in-class website”, or “we want to do something in social media”, to measureable outcomes. And User-Centricity means keeping the user at the centre of the experience, rather than the creative or the technology.

So for KKR, it was NOT about the team, but the fans -- attracting and engaging with them in the unique KKR style that they had come to identify with. For Asian Paints ColourNext it was not just about presenting the latest colour palette, but about immersing them in the colour themes over longer sessions, and so on.

What according to you has been the biggest achievement of Indigo till now?

Our achievements can only be as big as the success of our clients. And I am glad to say there have been a few – for instance we have delivered work for HSBC and HDFC Bank that became the industry benchmark in banking websites and was appreciated internationally. Personally though, I have derived most satisfaction from earning and retaining the trust of our clients and employees over long periods of time. I think I speak for the team when I say that we also have a great balance of professionalism, learning and youthfulness in our culture.

The advertising and marketing industry in India is said to be hit badly by the economic downturn. How has the situation affected digital marketing space? Was Indigo also affected by the same?

I feel it’s still a bit early to judge the full impact of the downturn, but to our best knowledge, the impact has been more on discretionary spends like on media campaigns and advertising. The ‘necessary’ spends like website development and ongoing communication programmes have not been curtailed too much. Since more of Indigo Consulting’s work is in the latter space, the impact on volume has not been felt, though there has definitely been pressure on rates.

What is the revenue generated by Indigo Consulting in India as of now? How is the growth of revenue on QoQ (quarter-over-quarter) basis?

Indigo Consulting has been profitable, cash-flow positive and self-sufficient from day one. Besides doing great work, we have paid equal attention to ensure our financial stability and performance. Anything less would have been unfair to our employees and clients. Over the last 4-5 years we have consistently grown by at least 40 per cent year-over-year.

What are your operations in US and Canada? Who are your clients in these countries and from which verticals?

The operations in US and Canada are managed by a completely independent company and team. There is no financial involvement either way. We only have a co-branding and partner arrangement, whereby, should either of our clients require a local/offshore presence, we can provide that. Indigo Consulting India independently has significant clients outside India -- in Middle East, Europe (including UK), and North America.

What challenges did you encounter while operating overseas?

The key challenge has been what even large IT companies and advertising agencies have faced – to move up the value chain from being just a cheaper back-office option, to a credible partner in thought and strategy. Besides, of course, the demand on quality and timeliness are different.

What is your experience on the difference in execution of an online marketing campaign in India as compared to the western nations you operate in?

We have found two main differences. Our European and American clients are by and large better versed with digital media and are more willing to try out new innovations, whether in design and user experience, or in using emerging platforms and technologies. And secondly, they usually plan better and provide more time to create and execute a campaign. In India, we often find that even if the client or the agency has a great, unique idea, there just isn’t time to do justice to the execution. I would hazard a guess that time management may just be one of the reasons why India does not produce more world-beating digital media work.

There is a perception that Indian digital agencies lack creativity and thus people outsource website designs to foreign agencies. What’s your take on that?

I would completely disagree. There is world-class creative talent in India, and I would like to believe, in our own firm as well. In fact, we have many clients from outside India who have hired us as much for our creativity as for any other skill, be it HSBC or Abu Dhabi Commercial Bank. In some of our pitches we have successfully competed against agencies from UK. Our awards in international competitions, where the likes of Razorfish and Ogilvy (US) compete, are further testimony to that.

As mentioned earlier, planning and time management is sometimes poor in the case of digital media in India. Digital media is almost an afterthought, something that needs to follow the offline strategy (though, this is changing slowly). That perhaps does not give sufficient time in every case to conceptualise and execute world-class ideas.

How do you differentiate yourself from competition?

As an agency, Indigo Consulting lays a lot of emphasis on strategy and planning -- we are well grounded in business needs and ensure that our solutions are focussed on achieving those objectives. The Creative and Technical craft are a means to an end.

Further, we ensure that we have both, the creative and the technical capabilities to execute our ideas. We have sometimes heard of companies where the creative is strong but the technical and project capabilities are weak or vice versa. We have consciously built perhaps the strongest balance between creative and technology. And this is backed by process orientation that makes Indigo Consulting one of the most dependable and respected digital agencies.

Also, Indigo Consulting is probably the only digital agency in India to have a dedicated UX Research Lab which specialises in researching, designing and testing user experiences.

Can internet be regarded as a good place for brand building in India? How can we get offline brands to spend more on internet?

By now, it is common knowledge that media consumption has become increasingly fragmented, with different media being accessed by consumers at different times for different purposes. Therefore, any brand building activity has to adopt the multi-media strategy. But the trick is to recognise that the internet is not just for advertisement and sales, but can also be used for decision aiding and customer service.

In our opinion, one highly underutilised area of brand building on the net is customer service. We all know that a satisfied customer is the best advertisement for your brand, and yet we find most online activity centred on lead generation and selling, rather than customer service -- whether it is banks or cars or holidays. Webchutney’s Digital Media Outlook for 2009 reported that only 9 per cent of all online advertisers were using digital spends for ‘customer satisfaction or engagement’ as one of the objectives in their brand strategy. Ironically, the most vocal voice on the internet is that of a dissatisfied customer, so if we don’t address making customers happy, all our advertising is just riding a head-wind against the negative voice of the customer which the open platform of the internet enables.

How do you market your company in India as well as in other locations? Are there any expansion plans to venture into new markets?

So far, our work has been our best advertisement. A lot of the work we get from overseas is also thanks to the relationships we have enjoyed with people in the organisations we have done work for. We see tremendous opportunity in the Middle East despite the current challenges in Dubai, and already have some traction there in the Banking segment with National Bank of Oman, Adu Dhabi Commercial Bank and HSBC.

Are you looking to raise funds to fuel your growth plans?

We are definitely open to strategic partnerships that will help accelerate our growth, both geographically as well as operationally. That includes opportunities to acquire or incubate companies offering complementary services or that will help us otherwise expand our reach or capabilities. For this purpose, we have built and earmarked a small corpus of our own, but should there be an exciting opportunity that requires us to raise additional funds, we would be open to raising external funding.

We have seen that online agencies join hands with offline agencies to gain more business and provide integrated services to clients. Are you also considering implementing a similar strategy?

Insofar as joining hands with offline agencies allows us to work on a larger canvass and offer integrated marketing services, as well as expands our geographical reach, we are certainly open to partnerships that recognise the value and expertise that Indigo Consulting brings to the table, and enables us both to exploit the full potential of the digital medium.

How, according to you, can the overall spend on digital media be increased in India?

Honestly, I don’t think I have a very confident answer for that, but I think some of the hesitation stems from the “all or nothing” view of the internet -- either the digital media generates x amount of sales for me, or its useless. It is important to view the internet as part of a multi-channel strategy where things consumers experience on the internet has a definite impact on their offline decisions or behaviour. Of course, the reach of the medium also needs to increase either through broadband or through mobile data services or both.

Why do you think deep pocketed advertisers especially FMCGs have so far not embraced internet as a medium for advertising and brand building? As a digital agency, what are your company’s plans to attract such advertisers?

Perhaps, the problem is their deep pocket. FMCG (fast moving consumer goods) advertisers need reach, and if they can afford the medium that gives them reach, very little attention is left for a medium that gives greater engagement and measurability but not the reach. But as advertisers recognise that some of their consumers, who happen to be opinion leaders in many cases, are spending increasing amounts of time on digital media, they are realising the need for a multi-channel strategy.

To get FMCG companies to put their faith in the medium, we have to try and present digital as part of an integrated media campaign, which includes mobile.

You have seen the evolution of internet medium in India from 1998 very closely. What are your observations on the growth of internet in India and how to increase the number of internet users in the country?

Yes, the growth has probably not been as rapid as expected, but there is no doubt that it is a matter of when rather than if. The drivers for the internet, perhaps, have to be pricing and ease of use. An under Rs 10k computer that does not require specialised training to use would definitely put the growth on fast track. Language content to my mind is another important factor in the acceleration of the growth of the internet.

What is the potential of mobile internet in India as a marketing and advertising medium? What are Indigo’s plans in the mobile space?

Relevance is critical to effective advertising and marketing, and the potential for mobile internet is great, not only because it is interactive and available on demand, but can be made immensely relevant through location and user profile information. Mobile internet has the potential to take mass marketing customised to the unit of 1.

Indigo Consulting already has an active mobile internet practice having helped companies like Knight Riders and DSP Blackrock take the first steps by way of mobile websites. We have also recently launched our first iPhone application for the Knight Riders called KnightWatch on the iTunes App Store. We have also released a WhiteShow (white paper as a slideshow) on the potential of Mobile Internet.

What are your expectations from 2010? What major changes in the industry would you like to see this year?

I would like to see 3G launch asap (as soon as possible) with sensible pricing. That could well be the push we have been hoping for in increasing the reach of the internet in India. And, of course, I would like to see more industries and brands take the internet more seriously, giving it the necessary time and attention it deserves.

What would be your advice to a budding entrepreneur who is planning to launch an interactive agency in India?

Be prepared to settle for being second best!