Gone are the days when locally made ads turned you off the product it was supposed to be selling. With state-of-the-art technology and a new internationally-trained creative producers Nepali companies are beginning to produce some world-class tv commercials, radio jingles and ads in the print media.

The Rs 2 billion advertising industry is today catching up at least in quality with the boom in India. Advancements in printing technology, the spread of television and a vibrant FM radio network have helped the agency. Indirectly, the press freedom that gives media credibility is a factor in this growth Nepal's ad industry had the humblest of beginnings. J K Sthapit remembers that till as recently as 20 years ago, Gorkhapatra or a cinema hall were the only outlets. "Our job was to take the material from the advertiser to the press and see that the letters were laid out properly and without typos," he says. This weekend, Sthapit is being honoured with the Lifetime Achievement Award at this year's Critty Awards. Computers revolutionised Sthapit's Echo Advertising but it took the business community sometime to see the role of advertising.

"Back then, people did not believe in the concept of advertisement as an investment and many still see it as extra cost," says Bhaskar Rajkarnikar, president of the Advertising Agencies Association of Nepal (AAAN).

One of the agencies' main challenges remains Nepal's limited market, which in turn affects advertisers' budgets. "In India, it's normal to spend Rs 50-60 million for a commercial because the market is so large but here the market is simply not large enough," says Joydeb Chakraborty of JW Thomson, adding, "political turmoil and its impact on the economy doesn't help at all".

But in the last few years, Nepali agencies have managed to mature, shedding their traditional roles to take up the tasks of devising marketing strategies, building brands, planning campaigns and promoting events. With more creative youth choosing advertising careers, idea and concept-based ads are also emerging. The industry was growing a whopping 40 percent a year till four years ago, although growth has been negligible this year.

Ranjit Acharya of Prisma Advertising believes increased competition has forced quality improvements and young people with international exposure are also a driving force. "The youth has convinced advertisers that the customer is king and this has changed the industry from a push to a pull market," he says. The biggest irritant for most viewers on television is still to hear Indian actors on commercials with their voices dubbed with a stilted Hindi-accented Nepali. Luckily, this is happening less and less.

Young entrepreneurs who understand marketing have used advertising to introduce new sales. Footwear brand Fit Rite has gone from the brink of bankruptcy to one of the most successful in the industries largely due to the brand image created by an ad agency. Others have failed because they were 'out-advertised'. Mayalu Soap, which used to be a best-selling Nepali brand, is today almost invisible because Unilever's marketing strategy for Lux drove it off the market. "Advertising as an investment in brand-building is percolating into the industry," explains Thomson's Chakraborty.

However, agencies cite the example of Nepal Tourism Board using an Indian agency for its latest campaign to prove that Nepali companies still don't believe in Nepali professionals. "We understand better what we need to promote-a foreigner will never understand Nepal the way a Nepali will," one advertising executive told us. Perhaps it's time that the government, which spends Rs 270 million a year on advertising, every year gave a little thought to the phrase 'Made in Nepal' and led by example.

AAAN's 3rd Critty Awards on 2 April will feature the best creatives, production and technical input in Nepal's advertising industry.