VivaKi India announced the creation of a hub of specialist services units of Starcom MediaVest Group (SMG) and Solutions Digitas recently. VivaKi Specialist Services (VSS) will comprise Enhance (Experiential and Retail/Trade Marketing), Xpanse Asia (Rural Marketing) and Navia and Vector (out-of-home).

It has also been announced that SMG will focus on its core product (media planning) and look at scaling up the Digital, Content and Insights verticals. Sources inform that announcements are likely during the latter part of this week.

Closely involved with this integration and several other things happening at VivaKi is Srikant Sastri, Country Chair - India.

Marketing services are also important ‘door openers' for the suite of services Publicis Groupe entities SMG, ZenithOptimedia and Digitas have to offer, notes Sastri. Broadly, while 60 per cent of the work is for media clients of the group, the rest are opportunities. The group claims execution capabilities in marketing services across 200 cities and towns, and across 50 per cent of the districts in seven States in rural India.

While VSS was born to derive synergies and capitalise on growth opportunities outside the home agency, another shared capability that will be leveraged across the Publicis agencies is digital.

In conversation with BrandLine, Srikant Sastri takes us through plans for integrating capabilities at VivaKi, and the changing client mindset towards digital media. Excerpts:

What is the thinking behind this integration, and what will be the scale of it in digital?

We have a large pool of digital talent, of around 150 people. When a client eyes digital today, he wants a complete solution encompassing digital strategy, digital creative, technology, media, social media, and so on. We have talent across each of these requirements but they may be sitting in different places within VivaKi. We're trying to see how each of our brands can access and harness VivaKi's digital capabilities for its clients, rather than rely only on what it has within itself.

We're exploring how we can break down silos and get people to work across boundaries, so that there's just slightly more fluid movement of people across projects and across clients.

We're trying to do the same with our marketing services. We have probably what is the broadest range of marketing services in the country.

VivaKi Exchange was created to consolidate the buying volumes to build scale. That was the first leg. The second leg of VivaKi is to enhance skills. And that is happening now.

What is the biggest challenge for digital services today?

With clients yet to buy in and start spending, digital is a unique challenge today. You need top-quality talent to deliver the top-quality execution that clients are demanding, but the client may not have started spending significantly yet. So the agency has to commit resources upfront.

How have digital services grown at VivaKi India?

We have the domestic business and then there's a fairly rapidly growing offshore arm. Currently, the offshore team has about 55 to 60 people, doing work for Vivaki agencies in the US and a little bit of Europe. We see that number scaling up to about 150 by December 2011.

The domestic business is also in a very interesting phase. Everyone asks why the digital space is so small in India - at Rs 1,000 crore. It's been low because on the user side, we have a small base of Internet users in India. The mobile base may be large, but the mobile Internet user base is small.

Second, whatever there has been in the space has also not been monetised. There can be two ways of monetising it - advertising dollars or transaction dollars. A lot of it now is free content.

Now, the market is at a cusp, poised for transformation. The user base is going to grow dramatically, thanks to 3G, thanks to BWA, more smart phones.

Are clients opening up on digital spends?

Some technology companies - particularly in the B2B space - are willing to allocate 70 to 75 per cent of their budgets to digital.

Then you have players in automobiles and telcom who are allocating as much as 15 to 20 per cent of their budgets to digital.

FMCG companies, which were on the other side of the fence a year ago, are willing to set aside 5 per cent or 10 per cent of their budget to what they call experimentation with the new medium.

Clients are seeing the scaling up happening with the medium. There are other reasons. If you are an MNC, you do face a great deal of questions from overseas offices on what is being done in digital - because the same company would be doing a lot more on the Internet in some other markets.

It also has to do with the people who are marketing decision-makers. They were not people who grew up like today's B-school graduates. We didn't grow up with the Internet. But we're seeing our kids grow up differently, helping us understand that the consumer has changed.