- Mobile broadband: With close to INR 70,000 crore having been paid by the Telecom companies to the government for the 3G licenses, we should see a surge in number of users connecting to the internet through their mobile phone which will be aided by the fact that almost all modern mobile handsets have the capability to access the internet.
- Continued interest in Social Media: The stats released by Comscore for July 2010 revealed that more than 33 million Internet users in India visited social networking sites, representing 84 percent of the total Internet audience. This was a growth of 43% over a 12 month period whilst the Total audience grew only by 13%. I feel that Social media will have continued interest.
- Decline in standalone email & instant messaging usage: I envisage the email & instant messaging applications of the social media platforms undergoing a huge improvement and matching the features & functionalities of the stand alone services. As users get more hooked onto the Social media platforms like Facebok & Orkut, the users will start using the instant messaging & email services built into these platforms to interact with others more and this will gradually reduce & replace the usage of standalone email & instant messaging services
- Surge in eCommerce: Barring Travel, that too Air & Railway tickets, India has not witnessed significant numbers in other ecommerce verticals. I foresee non travel ecommerce taking off in a big way over next 3 years spurred by verticals like Deal-a-day, Books, Gifting, Luxury retail etc.
- Explosion of Digital advertising spends in India: Digital advertising in India to constitute at least 7% (up from under 3% as of now) of total ad spends over next 3 years. The growth will also get spurred by mobile advertising & DTH advertising. There will be continued dominance of performance metrics based pricing.
- Demand for relevant Audiences: There will a demand from advertisers for delivery of audiences vis-à-vis delivery of traffic. There will be emergence of more options for targeting users on behavior, demographic & contextual relevancy including location based advertising.
- Rich media consumption: With higher speed of internet access, users will start consuming more rich media content.
- Mobile internet: Users will access internet through various devices (ala iPads etc.) and not only through smartphones or desktops/laptops. With this there will also be an explosion in usage of mobile applications.
- Mobile payments & mCommerce: Mobile payments & mCommerce should take off over next 3 years in a major way.
- Innovations & Entrepreneurship: We should see a Silicon Valley kind of environment in India over next 3 years with lot of entrepreneurial ideas & innovations happening.
Monday, August 30, 2010
2011-2013: Top 10 Digital media trends & bets
I strongly believe that finally internet in India is on the threshold of inflection. In this scenario what will be the big trends & bets over next 3 years? List of my Top 10 is given below. I encourage readers to add theirs...
Monday, April 19, 2010
Social Networking in India
For the launch of their first store in the up market Select Citywalk mall in Delhi, Haagen Dazs chose the words – ‘Entry restricted to holders of international passports only’. The intent of the company as clarified by them was to ‘get a taste of abroad right here in India’. However, their choice of words was easily misinterpreted as if they did not want to allow Indians in their store! Someone took a photograph of the signage and e-mailed it to a Times of India blogger, who put it on his blog within a couple of hours with the headline saying ‘Sorry, Indians not allowed’. The blog where this was carried has 804 hate comments till now and 2 hate groups on Facebook were spawned having close to 400 members. Thanks to the power of social media the hate Haagen Dazs campaign spread like wildfire not only in India but across the globe, inciting a hail of protests that left the company red-faced and ultimately they were forced to backtrack and issue an apology.
Emergence of Internet has changed the way media is created and consumed. Traditionally media was created by media companies who created the content and were the content owners. The content owners use to ‘broadcast’ this media to the consumers of such content. With internet this equation has undergone a fundamental change, now anyone can create content and share it with others using platforms like Blogging, Social Networks, YouTube etc. There is a term that describes this phenomenon- USG or User Generated Content!
In today’s era the consumers of media themselves have become media creators and the best part is that once such content is created it is getting distributed on the internet through any of the previously mentioned platforms and other users/ consumers engage with this content by commenting, Re-Tweeting etc. The communication on the internet between content and consumers is becoming a 2-way dialogue instead of the earlier 1-way broadcast.
Gaining popularity of social networking has brought in another dimension to this rapidly changing landscape. People are getting more connected & communicative with their networks. Technology allows them to voice their opinions at literally the speed of thought. It is imperative for brands to very carefully manage their ‘image; in this new digital space. Online reputation management becomes an integral part of a well planned Social Media Marketing exercise. The recent fiasco of Haagen Dazs launch in Delhi is a prime example of how fast negative publicity can travel in this new wired world.
This entire fast changing multi dimensional communication system is broadly referred to as SOCIAL MEDIA. It opens new areas and throws new challenges in front of the advertisers; they can either leverage this or get left behind. Conventional wisdom of marketing dictates that a brand should be present where the users are. Hence we see advertisers evaluating media options by the cost per user or cost per eyeball reached and most media is priced on this basis and you have metrics like Viewership (Television Rating Points - TRPs), Readership (IRS- Indian Readership Survey/NRS – National Readership Survey) etc. to measure these.
If we were to use the conventional logic and evaluate how many of the 50 Million Internet users in India who are visiting various online social networking sites, following interesting facts emerge as per Alexa & Vizisense:
In addition to the above, take a look at the ranking in terms of users of UGC sites:
What the above simply means is that 7 out of top 20 sites Indian internet users are visiting are in the arena of social media. 4 out of top 20 most visited sites in India are social networking sites. I would estimate that more than 70% people who are online are engaging with social media on some or the other platform (site).
One can argue that these are quantitative numbers, what about quality? Advertisers look for certain demographics whilst targeting their communication messages. Hence it is important to also see what kind of people are a part of this social media fraternity. Let us look at the demographics of users of Facebook (source: Vizisense). Almost 50% of Facebook users have income over 2 lacs / annum and more than half of the users are above 24 years of age. 63% users are graduates & above.
Audience demographics of LinkedIn.com - a business networking website is even better. Close to 60% users have an annual income of more than 2 lacs and close to 80% users are graduates and above.
To find more about the usage of Social networking sites, I conducted a survey and the following were key findings:
1. Reasons for usage of internet
2. Amongst the social networking sites, Facebook emerged as the most popular website with almost 91% users visiting it, followed by Orkut at 61%, LinkedIn at 34% and Twitter at 23%.
3. 35% of the users contacted are students and almost 60% of the users earn more than Rs. 10,000 per month. 22% users claimed to earn more than Rs. 50,000 per month.
4. Usage hours:
I would go a step ahead and say that after bollywood and cricket, the only other thing than has the potential of truly binding Indians is social networking!
The important question that would emerge for any advertiser is ‘How do I ‘Participate’ in social media? The tricky part is that rules for engaging with customers on social media platforms are very different. Hence the advertising formats that the advertisers are used to are not really applicable in this new world
There are two ways of being present / to participate in social media. Brands can pay and buy ‘space’ on social media websites. Such buys can be targeted on demographics and keywords. But the second way is more exciting where advertisers can actually leverage the social media to get consumers to endorse the brands to their friends and networks. Such endorsement is far more powerful that a regular advertisement because here rather than the brand saying something about themselves to me, a friend who is in my network is saying nice things about the brand and exhorting me to check it out. I will tend to believe such endorsement more than a brand advertisement. Such endorsement is also referred to as ‘in-stream’ participation/ advertising. For being ‘in-stream’, advertisers have to speak the language of the users, they have to be in constant dialogue with them, and they have to give reasons for the consumers to endorse them instead of tom-tomming about themselves. The advertisers also need to learn how to leverage ‘virality’ the medium allows for spreading their image and proposition
Participation options on various Social media sites:
1. Facebook:
2. LinkedIn
4. YouTube: It is also a Google company. Advertising possible through Google Content Network on a CPC/CPM basis. We have also seen companies uploading their TVCs etc on YouTube to gain from the wide distribution and reach that YouTube platform offers.
5. Blogger.com: Though this is a Google company as well, it is difficult to get inventories to advertise on individual blogs as these are owned by various bloggers and they have exclusive rights to the inventory of their own blogs. Can reach them through ad networks including Google content network. Any company can create their own blog on one of the blogging platforms like blogger.com. Care should be taken that a blog is not a replica of a company website; It should revolve around interesting content. For example a Fashion Designer’s / brand’s blog could talk about design trends globally and in India!
6. Twitter:
To launch & run a social media campaign for a brand, it requires skills that span strategic & creative thinking, technology, content creation and content aggregation capabilities. The main problem is that the amalgamation of all these skills is neither available with the advertiser nor with their conventional agency! There are some specialized social media marketing companies that are getting formed in India but they leave a lot to be desired. This could be one of the chief reasons why social media marketing has not taken off in India in a big way till now.
I would like to suggest a 7 point recipe for a successful social media campaign:
I did a comparison of Indian Fashion Brands and International Fashion Brands' presence on Social media. Out of the 27 Indian & international fashion and sports brand studied, what was extremely surprising that only 11 had presence on Facebook. What really impressed was that the (international) presence of international brands was truly fantastic with some brands having even more than 2 million fans! The ones that deserve a special mention are – Levis, Reebok women, Adidas & Puma. Indian brands should take a leaf from the way these brands have represented themselves on Facebook. However, at the same time most of these brands haven’t taken care to have local/ India specific presence. I feel that international brands must have robust local presence to leverage the power of social media in specific countries.
It is very surprising that even though the emergence of social media in India has been happening over the past 2-3 years and has now reached a significant proportion, advertisers still consider it more of an upcoming phenomenon. They should wake up and realize the potential this platform provides for engaging users, something that no other media vehicle can give to an advertiser.
__________________________________________________________________________
First published in Images Business of Fashion December’09 issue
Emergence of Internet has changed the way media is created and consumed. Traditionally media was created by media companies who created the content and were the content owners. The content owners use to ‘broadcast’ this media to the consumers of such content. With internet this equation has undergone a fundamental change, now anyone can create content and share it with others using platforms like Blogging, Social Networks, YouTube etc. There is a term that describes this phenomenon- USG or User Generated Content!
In today’s era the consumers of media themselves have become media creators and the best part is that once such content is created it is getting distributed on the internet through any of the previously mentioned platforms and other users/ consumers engage with this content by commenting, Re-Tweeting etc. The communication on the internet between content and consumers is becoming a 2-way dialogue instead of the earlier 1-way broadcast.
Gaining popularity of social networking has brought in another dimension to this rapidly changing landscape. People are getting more connected & communicative with their networks. Technology allows them to voice their opinions at literally the speed of thought. It is imperative for brands to very carefully manage their ‘image; in this new digital space. Online reputation management becomes an integral part of a well planned Social Media Marketing exercise. The recent fiasco of Haagen Dazs launch in Delhi is a prime example of how fast negative publicity can travel in this new wired world.
This entire fast changing multi dimensional communication system is broadly referred to as SOCIAL MEDIA. It opens new areas and throws new challenges in front of the advertisers; they can either leverage this or get left behind. Conventional wisdom of marketing dictates that a brand should be present where the users are. Hence we see advertisers evaluating media options by the cost per user or cost per eyeball reached and most media is priced on this basis and you have metrics like Viewership (Television Rating Points - TRPs), Readership (IRS- Indian Readership Survey/NRS – National Readership Survey) etc. to measure these.
If we were to use the conventional logic and evaluate how many of the 50 Million Internet users in India who are visiting various online social networking sites, following interesting facts emerge as per Alexa & Vizisense:
- Orkut & Facebook : 4th & 5th most visited sites. Facebook claims to have 5.7 Million users in India.
- Twitter: 12th most visited site
- Linkedin: 14th rank
In addition to the above, take a look at the ranking in terms of users of UGC sites:
- Blogger.com – 6th visited site
- You Tube: - 7th
- Wordpress: 15th
What the above simply means is that 7 out of top 20 sites Indian internet users are visiting are in the arena of social media. 4 out of top 20 most visited sites in India are social networking sites. I would estimate that more than 70% people who are online are engaging with social media on some or the other platform (site).
One can argue that these are quantitative numbers, what about quality? Advertisers look for certain demographics whilst targeting their communication messages. Hence it is important to also see what kind of people are a part of this social media fraternity. Let us look at the demographics of users of Facebook (source: Vizisense). Almost 50% of Facebook users have income over 2 lacs / annum and more than half of the users are above 24 years of age. 63% users are graduates & above.
Audience demographics of LinkedIn.com - a business networking website is even better. Close to 60% users have an annual income of more than 2 lacs and close to 80% users are graduates and above.
To find more about the usage of Social networking sites, I conducted a survey and the following were key findings:
1. Reasons for usage of internet
- Top usage of internet was for communication (email / chat). Almost 96% users use internet for communication purposes.
- Almost 85% users stated that they visit social networking sites. This emerged as the second largest reason for using the internet.
- This was followed by consumption of news at 61%.
2. Amongst the social networking sites, Facebook emerged as the most popular website with almost 91% users visiting it, followed by Orkut at 61%, LinkedIn at 34% and Twitter at 23%.
3. 35% of the users contacted are students and almost 60% of the users earn more than Rs. 10,000 per month. 22% users claimed to earn more than Rs. 50,000 per month.
4. Usage hours:
- Another significant finding from our survey was that 80% users consume Internet for more than 2 hours / day, while only 33% users watched TV for more than 2 hours/day, and none of the users read newspaper for more than 2 hours/day.
- Almost 75% newspaper readers read it for less than 1 hour/day. 36% viewers watch TV for less than 2 hour/day. While amongst the Internet users, the percentage of users spending less than 1 hour/day on Internet was only 4%.
- The fact that gets clearly established is that the internet users consume Internet far more than any other media! Advertisers need to really note this point. Since to find these users on any media other than internet will become more and more difficult as they increase their internet consumption and reduce consumption of other media. in the western countries already the advertisers are finding it hard to target the under 29 users outside Internet and I feel it is only a matter of time when this will also happen in India.
I would go a step ahead and say that after bollywood and cricket, the only other thing than has the potential of truly binding Indians is social networking!
The important question that would emerge for any advertiser is ‘How do I ‘Participate’ in social media? The tricky part is that rules for engaging with customers on social media platforms are very different. Hence the advertising formats that the advertisers are used to are not really applicable in this new world
There are two ways of being present / to participate in social media. Brands can pay and buy ‘space’ on social media websites. Such buys can be targeted on demographics and keywords. But the second way is more exciting where advertisers can actually leverage the social media to get consumers to endorse the brands to their friends and networks. Such endorsement is far more powerful that a regular advertisement because here rather than the brand saying something about themselves to me, a friend who is in my network is saying nice things about the brand and exhorting me to check it out. I will tend to believe such endorsement more than a brand advertisement. Such endorsement is also referred to as ‘in-stream’ participation/ advertising. For being ‘in-stream’, advertisers have to speak the language of the users, they have to be in constant dialogue with them, and they have to give reasons for the consumers to endorse them instead of tom-tomming about themselves. The advertisers also need to learn how to leverage ‘virality’ the medium allows for spreading their image and proposition
Participation options on various Social media sites:
1. Facebook:
- Self-served advertising model on selected inventories. Advertisers can buy some inventories on a Cost-per-Click (CPC) or Cost-per-Mille/ Thousand impressions (CPM) basis. Payment can be made through credit card.
- Facebook also has a tie-up with Google wherein advertising is possible through the Google Content Network on a CPC/CPM basis.
- Presence through brand page/ fan page. Facebook has an option for brands to create their fan/ brand page. This allows users to become fans of the brand and they can then engage with the brand in various manners. Any ‘post’ made by the advertiser/ brand on this page will go directly into the account of the fans. Using the Fan page application advertisers can send regular updates, promotional messages etc to the fans / followers very easily. It is not difficult for a brand to create a brand/fan page, but what is challenging is to give users compelling reasons to become fans and then also to keep remained engaged with the brand over a period of time. This requires great level of strategic planning & execution. Users can remain engaged over a period of time only due to either compelling content being disseminated by the brand or through contests or through gratification (deals & discounts). For a participation strategy brands must pre plan a complete calendar of user engagement hooks and then embark on the implementation.
- Can create discussion groups and invite engagement / participation from users. No media cost implication
2. LinkedIn
- Has a tie-up with Google. We can use Google Content network for text advertisements on LinkedIn on a CPC/CPM basis.
- LinkedIn also has a self-served advertising model on selected inventories. Advertisers can buy some inventories on a CPC basis. Payment through credit card.
- In India LinkedIn have appointed www.NetworkPlay.in as sole concessionaires for representing their inventory where advertisers can buy this inventory on a CPM basis.
- Create company page
- Create discussion groups.
4. YouTube: It is also a Google company. Advertising possible through Google Content Network on a CPC/CPM basis. We have also seen companies uploading their TVCs etc on YouTube to gain from the wide distribution and reach that YouTube platform offers.
5. Blogger.com: Though this is a Google company as well, it is difficult to get inventories to advertise on individual blogs as these are owned by various bloggers and they have exclusive rights to the inventory of their own blogs. Can reach them through ad networks including Google content network. Any company can create their own blog on one of the blogging platforms like blogger.com. Care should be taken that a blog is not a replica of a company website; It should revolve around interesting content. For example a Fashion Designer’s / brand’s blog could talk about design trends globally and in India!
6. Twitter:
- Offers inventories through two models where the advertiser pays the Twitter users to
- Sport the ad on their personal profiles for a pre-decided period of time, so it can be viewed by their “followers” –Twitad. (Payment is for the number of users that agree to publish the ad on their profile/account pages.)
- Publish “ad tweets” through their personal profiles – Twivert. (CPC inventory in terms of ad tweets created by the advertiser & sent out by twitter users. An advertiser pays only when the ad tweet is clicked on.)
- Allows users to create a company profile which can then be used for promotions in the form of personal tweets.
To launch & run a social media campaign for a brand, it requires skills that span strategic & creative thinking, technology, content creation and content aggregation capabilities. The main problem is that the amalgamation of all these skills is neither available with the advertiser nor with their conventional agency! There are some specialized social media marketing companies that are getting formed in India but they leave a lot to be desired. This could be one of the chief reasons why social media marketing has not taken off in India in a big way till now.
I would like to suggest a 7 point recipe for a successful social media campaign:
- It has to be owned by the marketing team of the advertiser as a must do project. (IT or PR department can have a peripheral role at best)
- A project manager from the marketing team has to be identified for this task.
- Advertiser should hire a specialized social media marketing agency. They will bring perspective on technology & user engagement.
- The specialized agency should be made to work closely with the advertiser’s creative agency. They will bring brand understanding to the table.
- Advertiser should insist on a proper content team to be deployed by the specialized agency.
- Detailed activity plans & budgetary provisions should be made for content, contests & gratification of users.
- Advertiser should not be averse to spending media monies to get users to sign up as fans, i.e. advertiser should plan to allocate media monies for promoting their social network destination.
I did a comparison of Indian Fashion Brands and International Fashion Brands' presence on Social media. Out of the 27 Indian & international fashion and sports brand studied, what was extremely surprising that only 11 had presence on Facebook. What really impressed was that the (international) presence of international brands was truly fantastic with some brands having even more than 2 million fans! The ones that deserve a special mention are – Levis, Reebok women, Adidas & Puma. Indian brands should take a leaf from the way these brands have represented themselves on Facebook. However, at the same time most of these brands haven’t taken care to have local/ India specific presence. I feel that international brands must have robust local presence to leverage the power of social media in specific countries.
It is very surprising that even though the emergence of social media in India has been happening over the past 2-3 years and has now reached a significant proportion, advertisers still consider it more of an upcoming phenomenon. They should wake up and realize the potential this platform provides for engaging users, something that no other media vehicle can give to an advertiser.
__________________________________________________________________________
First published in Images Business of Fashion December’09 issue
Wednesday, February 10, 2010
India digital advertising 2009 - Not all was doom & gloom
In times of crisis and recession, it is only obvious that advertisers will want to make every penny spent on advertisement count. Internet lends itself very well here. It is the only medium that on one hand can deliver against ROI objectives of the advertisers, since the medium is truly capable of specific measurement in terms of ‘cost of acquiring a customer’ or ‘cost of generating a transaction’. Advertisers can use internet as a direct response medium, a medium where they can actually specify their objectives in terms of cost per acquired customer. On the other hand being an interactive medium Internet can provide a really immersive brand engagement with the user.
However, it is a pity that advertisers in India have still not exploited the true potential of Internet. Digital media in India has not got its due despite being present for over a decade in India. There has been no growth in terms of advertising spends per user during the decade. The following table & chart highlight this fact:
Source: Zenith Optimedia & Internet World Stats
The above charts clearly show that in 2009 the ad spend per user in India have remained almost the same at an abysmal $ 1.3 up from $ 1.2 in 2000, though during this period the number of internet users have gone up 14 times. There is a lot of catching up that Indian digital media has to do with other parts of the world.
Not everything in 2009 was doom and gloom as far as Digital advertising is concerned. Categories that continued using internet were Travel, Finance and Online classified businesses. Categories that significantly increased the share of digital in their overall mix were Automobiles & Consumer Electronics. Emerging categories include Education & Real Estate. We would like to see FMCG & Retail advertise more on the internet.
A significant trend that really scaled up in India was Social Media. Following interesting facts emerge as per Alexa & Vizisense:
Orkut & Facebook : 4th & 5th most visited sites. Facebook claims to have 5.7 Million users in India.
Twitter: 12th most visited site
Linkedin: 14th rank
In addition to the above, take a look at the ranking in terms of users of User Generated Content sites:
Blogger.com – 6th visited site
You Tube: - 7th
Wordpress: 15th
What the above simply means is that 7 out of top 20 sites Indian internet users are visiting are in the arena of social media. 4 out of top 20 most visited sites in India are social networking sites. I would estimate that more than 70% people who are online are engaging with social media on some or the other platform (site).
One can argue that these are quantitative numbers, what about quality? Advertisers look for certain demographics whilst targeting their communication messages. Hence it is important to also see what kind of people are a part of this social media fraternity. Let us look at the demographics of users of Facebook (source: Vizisense). Almost 50% of Facebook users have income over 2 lacs / annum and more than half of the users are above 24 years of age. 63% users are graduates & above.
Audience demographics of LinkedIn.com - a business networking website is even better. Close to 60% users have an annual income of more than 2 lacs and close to 80% users are graduates and above.
This reinforces the point that not only there is a substantial number of users visiting various social media sites but they are also relatively well educated and well to do – exactly the kind of Audience that most of the brands & marketers will want to address. I would go a step ahead and say that after bollywood and cricket, the only other thing than has the potential of truly binding Indians is social networking!
Advertisers need to understand that it is also only a matter of time that the younger generation who is growing with internet will be difficult to find anywhere but on the web, as these people are shunning consumption of the traditional / offline media and are spending disproportionate time on the Internet. This phenomenon can already be witnessed across the world.
I believe that at 50 million users Internet is no longer a niche medium and the advertisers need to start allocating proportionate monies to internet in their overall marketing plans rather than allocating some small percentages.
--------------------------------------------------------
The above article published in exchange4media.com
However, it is a pity that advertisers in India have still not exploited the true potential of Internet. Digital media in India has not got its due despite being present for over a decade in India. There has been no growth in terms of advertising spends per user during the decade. The following table & chart highlight this fact:
Source: Zenith Optimedia & Internet World Stats
The above charts clearly show that in 2009 the ad spend per user in India have remained almost the same at an abysmal $ 1.3 up from $ 1.2 in 2000, though during this period the number of internet users have gone up 14 times. There is a lot of catching up that Indian digital media has to do with other parts of the world.
Not everything in 2009 was doom and gloom as far as Digital advertising is concerned. Categories that continued using internet were Travel, Finance and Online classified businesses. Categories that significantly increased the share of digital in their overall mix were Automobiles & Consumer Electronics. Emerging categories include Education & Real Estate. We would like to see FMCG & Retail advertise more on the internet.
A significant trend that really scaled up in India was Social Media. Following interesting facts emerge as per Alexa & Vizisense:
Orkut & Facebook : 4th & 5th most visited sites. Facebook claims to have 5.7 Million users in India.
Twitter: 12th most visited site
Linkedin: 14th rank
In addition to the above, take a look at the ranking in terms of users of User Generated Content sites:
Blogger.com – 6th visited site
You Tube: - 7th
Wordpress: 15th
What the above simply means is that 7 out of top 20 sites Indian internet users are visiting are in the arena of social media. 4 out of top 20 most visited sites in India are social networking sites. I would estimate that more than 70% people who are online are engaging with social media on some or the other platform (site).
One can argue that these are quantitative numbers, what about quality? Advertisers look for certain demographics whilst targeting their communication messages. Hence it is important to also see what kind of people are a part of this social media fraternity. Let us look at the demographics of users of Facebook (source: Vizisense). Almost 50% of Facebook users have income over 2 lacs / annum and more than half of the users are above 24 years of age. 63% users are graduates & above.
Audience demographics of LinkedIn.com - a business networking website is even better. Close to 60% users have an annual income of more than 2 lacs and close to 80% users are graduates and above.
This reinforces the point that not only there is a substantial number of users visiting various social media sites but they are also relatively well educated and well to do – exactly the kind of Audience that most of the brands & marketers will want to address. I would go a step ahead and say that after bollywood and cricket, the only other thing than has the potential of truly binding Indians is social networking!
Advertisers need to understand that it is also only a matter of time that the younger generation who is growing with internet will be difficult to find anywhere but on the web, as these people are shunning consumption of the traditional / offline media and are spending disproportionate time on the Internet. This phenomenon can already be witnessed across the world.
I believe that at 50 million users Internet is no longer a niche medium and the advertisers need to start allocating proportionate monies to internet in their overall marketing plans rather than allocating some small percentages.
--------------------------------------------------------
The above article published in exchange4media.com
Friday, February 05, 2010
Retailers in India – www Challenged
As an internet & online marketing professional I often come across many retailers and when I ask them why they don’t have a cohesive strategy for e commerce some of their usual refrains are:
I do agree that not many people are buying these brands online and I have tried to map out the reasons for this and what do the retailers need to do to overcome these. I strongly believe that none of the above refrains used by Brands should be real deterrents for setting up their online stores.
Internet in India is small - Various estimates in India peg Internet users between 35 million to 80 million users with 6.8 Million Broadband connections.
India is ranked 4th largest country in terms of Internet users by www.InternetWorldStats.com *
• Source: http://www.internetworldstats.com/top20.htm
Taking median of various estimates even at 45 Million users, we are way ahead of all European countries in terms of number of Internet Users. Another interesting comparison is with total
English print media readership in India is 50 million, Internet doesn’t seem small? Why should we then insist that Internet is small? It may be small in terms of revenues as of today, however by no means is it small in terms of reach or eyeballs.
What is also encouraging is that Internet connectivity is growing. We have an estimated 7 million Broadband users with an annual growth rate in excess of 60%. Some states are seeing Internet penetration at close to 10% levels! Also, with the advent of technologies like WiMax and Mobile Broadband we are all set to be poised to take a leap and eliminate all such connectivity issues in times to come.
Indians are averse to transacting online – As per industry estimates out of almost 1 million tickets sold by Indian Railways, 1 in 3 tickets are sold online by IRCTC. This translates into close to 300,000 tickets being sold online every day.
Also consider this, Almost 100,000 people fly every day in India on domestic air travel. It is estimated that almost 35% of these people book their tickets on various online travel portals. Another 20-25% book on the Airlines Websites directly through Internet. Hence almost 60,000 people are flying every day using tickets bought through the Internet!
The above would clearly indicate that if there is a compelling proposition (Convenience in case of Indian Railways & price comparison & transparency in case of Airlines) people will buy online. However, when it comes to non-travel online retailing, the numbers look woefully small. A research report by IMRB-IAMAI indicates that non travel online retailing was estimated to be only 850 crores in 2006-07. In 2009 it would have reached around 1200 crores.
Before we get into analyzing why Indians are not buying online, let us look at how consumer ecommerce is behaving in a developed market like USA. Forrester Research in its five-year e-commerce forecast for USA has reported that Online sales amounted to a whopping US$ 156 Billion in 2009 and it contributed to estimated 6 % of total retail sales in 2009. They further expect online sales to contribute to almost 8% by 2013.
The top ecommerce product categories in USA* are:
From the above we can see that the top offline retailers like Wal-Mart & Target have a very significant traffic on their websites and are the 22nd & 26th most visited website in USA. Contrast this with the traffic rank as per www.Alexa.com of the big Indian retailers like:
Big Bazaar is at the top with an abysmal ranking of 836 this means that no Indian Retail brand is within first 800 most visited websites in India. We also need to see what are people really buying? Some of the products/ categories bought that are online are:
*Source: http://www.census.gov/econ/estats/2007/2007tables.html
Indians are not buying brands online. The big question then is what is holding people back from doing this? The IAMAI-IMRB research report has tried to answer this by citing time saving, convenience, variety & comparison possibility & discounts as reasons why people buy online. The same report lists Suspect product quality, Credit card security, lack of touch & feel, fixed price format & waiting for delivery as the chief reasons why Shoppers are shying away from buying online
However, I personally do not agree that people are not buying due to Product Quality, or not being able to negotiate or issues with security of credit cards. In terms of the reasons why ecommerce has not taken off in India I feel that following are the main reasons why ecommerce has not really taken off in India:
1. Cultural / Habitual – Indians look at shopping as an entertainment activity/ an evening out with family, when they go out to the Mall/ Market and shop, dine & enjoy. Ecommerce robs this completely! I am not sure that anyone can really address this issue! What the Brands need to realize is that how can they make themselves attractive online so that despite the Indian habits, people still get tempted to buy online.
2. Leading Brands not present online or present in a very non friendly manner:
We did a study of 14 Indian brands across genres to see their Internet & ecommerce presence. The results can be seen in the following chart:
Notes:
• Website URL- If not present on first page of Google search using different Brand terms, taken as website not available
• To determine if Brand is available on some other shopping portal, used google search with queries Buy + and listed just top 1-2
stores if brand available on some other shopping portal.
• Not considered listings in Auction Sites like Ebay or comparison sites like Naaptol.com, TolMol.com
A broad Analysis of the 14 Brands studied above show that more than half of the brands do not even have their own ecommerce enabled website! The ones that have ecommerce capabilities, only one brand gives some discounts on their website while almost all of them sell at MRP and they none of them have any offline-online integration. It is interesting to note that 6 out of 8 Brands that do not have their own ecommerce enabled site sell their products on some other shopping portal.
3. No offline / online integration
If one studies Wal-Mart’s bricks 'n clicks integration strategy i.e. tying its Web site into its real world stores, some very interesting things emerge, for example, few things that a customer can do are:
• Choose replacement tires at Walmart.com and have them installed at a local Wal-Mart.
• The site's pharmacy section lets you place an order to be picked up locally; you can also view your prescription history online and set up e-mail reminders for refills.
• Walmart.com’s vision center offers a similar service for contact lenses.
• You can drop off photos to be developed at Wal-Mart and see the finished prints at Walmart.com, where you can e-mail them to friends or make them into gift cards.
• If you buy an item at Walmart.com, you can return it at a local Wal-Mart.
• If there's an item your local Wal-Mart is out of, it's likely that the site has it. Walmart.com stocks 500,000 books and 80,000 CDs, not to mention replacement lawn mower blades, hot tubs, women's shoes, and Harry Potter Lego sets. Though the site doesn't release inventory figures, it's probable that it has the largest inventory of any retailer, online or off.
None of the 50% Indian Brands studied that have an ecommerce presence have done any offline-online integration. It almost seems that the online & offline stores operate in different silos. There is a huge need for integrating online & offline offerings by Brands. For instance why can’t a shopper just create her shopping list online and take delivery offline from her nearest Food Bazaar outlet and eliminate massive queues at checkout counters? Or why cannot these items be home delivered once a shopper puts them in her shopping cart online?
4. No real incentive to buy online – There aren’t any significant discounts.
Only 1 out of 8 brands I.e. FutureBazaar had some web only SKUs or discounts across products. None of the other 7 ecommerce enabled brands studies have web only offers or deep discounts. It almost seems that the Brands are really not interested in offering anything extra to people for coming online & shopping. Brands need to understand and make extra efforts into wooing users to buy online. Merely putting their catalogue online even with ecommerce capability doesn’t help the cause.
Channel Conflict: I recently came across a very large White Goods brand that has priced their products higher than the offline prices available in the market, as they said that they do not want to upset their retailers! Why on earth anyone would want to buy from them online in such a case? Online consumers are looking for DEALS DEALS & MORE DEALS. There are some easy ways of sidestepping the issue of channel conflict in case a Brand is offering lower price on their online store. Brand can create a product range that is Web Exclusive or push end of life products that can be deep discounted. Why can’t a Shoppers Stop continue its end of Season Sale 7 days more than at the offline stores, or better even begin it online 3 days prior to starting them offline?
Gen Next & online buying
The younger generation in India is growing with the presence of Internet all around them in homes as well as schools. With online connectivity increasing, more and more people will be spending increasing amounts of time online, consuming different kinds of media & engaging with online media in different manners. We have already seen Social networking impacting the lives of all of us already.
Studies indicate that even though users in India may not be buying online right now, but they are surely increasingly using Internet for their pre-buying research. This is becoming more evident in high involvement categories like Automobiles, Real Estate etc.
Also, with the urban families becoming more nuclear where all members are working, there is a huge paucity of time for people to go out for research before shopping. Hence it is apparent that it is only a matter of time that more and more shoppers will turn to research & then buying online. The question is Will the brands be available when they are ready to buy online?
Evangelizing V/s ROI
Most trends indicate that it is only a matter of time when the users will start shifting some percentage of their spending online and that online shopping can only increase from here. Why is it that the Retailers and brands are still not investing in having their ecommerce stores & presence?
One of the chief reasons can be their own myopic view. I have often hear retailers say that since online retail doesn’t give them sales in the short run, why should they invest in setting up & running an ecommerce portal ?
To some extent they are not unjustified in saying this. We also need to understand that organized retiling is a relatively new phenomenon in India and yet there is a huge opportunity and gap in terms of sheer physical presence of Brands in various geographies / catchment areas of their potential clients. Hence it is understandable that bulk of energies of the retailers will go in addressing this immediate opportunity at hand.
However, the Brands need to understand that the consumer’s habits can change much faster that what we sometimes expect and that it is only imperative that they are present where the consumers want to look for them and in the manner in which the consumers want to engage with them. In my mind there cannot be any debate on the importance for Brands to be available online.
What does it take to get online
The first step towards this is having your website ready with ecommerce & payment gateway integration. The Website should be ready with SKUs / catalogues integrated for ecommerce. Care should be taken for the following:
I am sure, if Brands & retailers make a sustained strategy to harness the power of ecommerce it can become a significant channel for sales & Brand engagement for them with their customers. This of course needs a long term vision & commitment.
__________________________________________________________________________
First published in Images Business of Fashion November ’09 issue
- Internet in India is small
- Indians do not like to shop online
- Channel conflict – This issue is generally raised by the Electronics/ Consumer Durable Brands that have very well established Dealer networks. They think that if they give lower prices online then they will have channel conflicts with their offline retailers which give almost 100% volumes and since internet doesn’t give them any sales, why on earth should they risk all for nothing?
- ROI- Why should I invest in setting up e commerce portal when it will not give me any sales?
I do agree that not many people are buying these brands online and I have tried to map out the reasons for this and what do the retailers need to do to overcome these. I strongly believe that none of the above refrains used by Brands should be real deterrents for setting up their online stores.
Internet in India is small - Various estimates in India peg Internet users between 35 million to 80 million users with 6.8 Million Broadband connections.
India is ranked 4th largest country in terms of Internet users by www.InternetWorldStats.com *
• Source: http://www.internetworldstats.com/top20.htm
Taking median of various estimates even at 45 Million users, we are way ahead of all European countries in terms of number of Internet Users. Another interesting comparison is with total
English print media readership in India is 50 million, Internet doesn’t seem small? Why should we then insist that Internet is small? It may be small in terms of revenues as of today, however by no means is it small in terms of reach or eyeballs.
What is also encouraging is that Internet connectivity is growing. We have an estimated 7 million Broadband users with an annual growth rate in excess of 60%. Some states are seeing Internet penetration at close to 10% levels! Also, with the advent of technologies like WiMax and Mobile Broadband we are all set to be poised to take a leap and eliminate all such connectivity issues in times to come.
Indians are averse to transacting online – As per industry estimates out of almost 1 million tickets sold by Indian Railways, 1 in 3 tickets are sold online by IRCTC. This translates into close to 300,000 tickets being sold online every day.
Also consider this, Almost 100,000 people fly every day in India on domestic air travel. It is estimated that almost 35% of these people book their tickets on various online travel portals. Another 20-25% book on the Airlines Websites directly through Internet. Hence almost 60,000 people are flying every day using tickets bought through the Internet!
The above would clearly indicate that if there is a compelling proposition (Convenience in case of Indian Railways & price comparison & transparency in case of Airlines) people will buy online. However, when it comes to non-travel online retailing, the numbers look woefully small. A research report by IMRB-IAMAI indicates that non travel online retailing was estimated to be only 850 crores in 2006-07. In 2009 it would have reached around 1200 crores.
Before we get into analyzing why Indians are not buying online, let us look at how consumer ecommerce is behaving in a developed market like USA. Forrester Research in its five-year e-commerce forecast for USA has reported that Online sales amounted to a whopping US$ 156 Billion in 2009 and it contributed to estimated 6 % of total retail sales in 2009. They further expect online sales to contribute to almost 8% by 2013.
The top ecommerce product categories in USA* are:
- Clothing & clothing accessories
- Drugs, Health & Beauty Aids
- Computer Hardware
- Books & magazines
- Electronic Appliances
- Furniture & home furnishings
- Toys & Hobbies. Etc
- eBay: 7th
- Amazon: 9th
- Wal-Mart: 22nd
- Target: 26th
From the above we can see that the top offline retailers like Wal-Mart & Target have a very significant traffic on their websites and are the 22nd & 26th most visited website in USA. Contrast this with the traffic rank as per www.Alexa.com of the big Indian retailers like:
- BigBazaar (www.FutureBazaar.com) : India rank 836
- ShoppersStop (www.Shopperstop.com) : India Rank: 1,847
Big Bazaar is at the top with an abysmal ranking of 836 this means that no Indian Retail brand is within first 800 most visited websites in India. We also need to see what are people really buying? Some of the products/ categories bought that are online are:
- Books
- Flowers
- Cheap / low priced electronic gadget
*Source: http://www.census.gov/econ/estats/2007/2007tables.html
Indians are not buying brands online. The big question then is what is holding people back from doing this? The IAMAI-IMRB research report has tried to answer this by citing time saving, convenience, variety & comparison possibility & discounts as reasons why people buy online. The same report lists Suspect product quality, Credit card security, lack of touch & feel, fixed price format & waiting for delivery as the chief reasons why Shoppers are shying away from buying online
However, I personally do not agree that people are not buying due to Product Quality, or not being able to negotiate or issues with security of credit cards. In terms of the reasons why ecommerce has not taken off in India I feel that following are the main reasons why ecommerce has not really taken off in India:
1. Cultural / Habitual – Indians look at shopping as an entertainment activity/ an evening out with family, when they go out to the Mall/ Market and shop, dine & enjoy. Ecommerce robs this completely! I am not sure that anyone can really address this issue! What the Brands need to realize is that how can they make themselves attractive online so that despite the Indian habits, people still get tempted to buy online.
2. Leading Brands not present online or present in a very non friendly manner:
We did a study of 14 Indian brands across genres to see their Internet & ecommerce presence. The results can be seen in the following chart:
Notes:
• Website URL- If not present on first page of Google search using different Brand terms, taken as website not available
• To determine if Brand is available on some other shopping portal, used google search with queries Buy +
• Not considered listings in Auction Sites like Ebay or comparison sites like Naaptol.com, TolMol.com
A broad Analysis of the 14 Brands studied above show that more than half of the brands do not even have their own ecommerce enabled website! The ones that have ecommerce capabilities, only one brand gives some discounts on their website while almost all of them sell at MRP and they none of them have any offline-online integration. It is interesting to note that 6 out of 8 Brands that do not have their own ecommerce enabled site sell their products on some other shopping portal.
If one studies Wal-Mart’s bricks 'n clicks integration strategy i.e. tying its Web site into its real world stores, some very interesting things emerge, for example, few things that a customer can do are:
• Choose replacement tires at Walmart.com and have them installed at a local Wal-Mart.
• The site's pharmacy section lets you place an order to be picked up locally; you can also view your prescription history online and set up e-mail reminders for refills.
• Walmart.com’s vision center offers a similar service for contact lenses.
• You can drop off photos to be developed at Wal-Mart and see the finished prints at Walmart.com, where you can e-mail them to friends or make them into gift cards.
• If you buy an item at Walmart.com, you can return it at a local Wal-Mart.
• If there's an item your local Wal-Mart is out of, it's likely that the site has it. Walmart.com stocks 500,000 books and 80,000 CDs, not to mention replacement lawn mower blades, hot tubs, women's shoes, and Harry Potter Lego sets. Though the site doesn't release inventory figures, it's probable that it has the largest inventory of any retailer, online or off.
4. No real incentive to buy online – There aren’t any significant discounts.
Only 1 out of 8 brands I.e. FutureBazaar had some web only SKUs or discounts across products. None of the other 7 ecommerce enabled brands studies have web only offers or deep discounts. It almost seems that the Brands are really not interested in offering anything extra to people for coming online & shopping. Brands need to understand and make extra efforts into wooing users to buy online. Merely putting their catalogue online even with ecommerce capability doesn’t help the cause.
Channel Conflict: I recently came across a very large White Goods brand that has priced their products higher than the offline prices available in the market, as they said that they do not want to upset their retailers! Why on earth anyone would want to buy from them online in such a case? Online consumers are looking for DEALS DEALS & MORE DEALS. There are some easy ways of sidestepping the issue of channel conflict in case a Brand is offering lower price on their online store. Brand can create a product range that is Web Exclusive or push end of life products that can be deep discounted. Why can’t a Shoppers Stop continue its end of Season Sale 7 days more than at the offline stores, or better even begin it online 3 days prior to starting them offline?
Gen Next & online buying
The younger generation in India is growing with the presence of Internet all around them in homes as well as schools. With online connectivity increasing, more and more people will be spending increasing amounts of time online, consuming different kinds of media & engaging with online media in different manners. We have already seen Social networking impacting the lives of all of us already.
Studies indicate that even though users in India may not be buying online right now, but they are surely increasingly using Internet for their pre-buying research. This is becoming more evident in high involvement categories like Automobiles, Real Estate etc.
Also, with the urban families becoming more nuclear where all members are working, there is a huge paucity of time for people to go out for research before shopping. Hence it is apparent that it is only a matter of time that more and more shoppers will turn to research & then buying online. The question is Will the brands be available when they are ready to buy online?
Evangelizing V/s ROI
Most trends indicate that it is only a matter of time when the users will start shifting some percentage of their spending online and that online shopping can only increase from here. Why is it that the Retailers and brands are still not investing in having their ecommerce stores & presence?
One of the chief reasons can be their own myopic view. I have often hear retailers say that since online retail doesn’t give them sales in the short run, why should they invest in setting up & running an ecommerce portal ?
To some extent they are not unjustified in saying this. We also need to understand that organized retiling is a relatively new phenomenon in India and yet there is a huge opportunity and gap in terms of sheer physical presence of Brands in various geographies / catchment areas of their potential clients. Hence it is understandable that bulk of energies of the retailers will go in addressing this immediate opportunity at hand.
However, the Brands need to understand that the consumer’s habits can change much faster that what we sometimes expect and that it is only imperative that they are present where the consumers want to look for them and in the manner in which the consumers want to engage with them. In my mind there cannot be any debate on the importance for Brands to be available online.
What does it take to get online
The first step towards this is having your website ready with ecommerce & payment gateway integration. The Website should be ready with SKUs / catalogues integrated for ecommerce. Care should be taken for the following:
Use technology that is robust and can handle volumes once business starts scaling up. Use of Open source based OScommerce(www.oscommerce.com) , xcart (www.x-cart.com) , zencart (www.zen-cart.com) , etc or commercial technologies like Octashop (www.octashop.com) , Martjack (www.martjack.com) are recommended Technology should allow quick addition & modification of SKUs using good Content Management System. One can use Open Source CMS like Joomla (www.joomla.org) Drupal (www.drupal.org) , typo3(www.typo3.com) , or commercial custom build solution offered by many technology companies like Mind tree, ANMsoft etc. Quick creation of Catalogues for offers & promotions. Provide world class User Interface (UI) & navigation. Some of the companies who can help in creating state of art UI design are HFI, Wirefoot etc. Website should be designed with Search Engines friendliness in mind. Payment gateway with multiple payment options like Credit cards, debit cards, cash on delivery. Most commonly used gateway are cc avenue, DirecPay, EBS (axis bank), ICICI Payment Gateway, HDFC Credit Card Gateway, also some mobile payment gateway are atom, Mcheck etc. Defining standard work & process flows for handling & fulfilling online orders. Tying up with Logistics partners like Aramex, First Flight, Elbee etc. I would recommend offering options like Cash on Delivery to customers as well. Defining pricing & promotion policies with adequate incentives for shoppers to buy online Laying our proper offline & online integration Ensuring proper customer support using call centres. Also ensuring having SOPs with all escalations laid out for handling customer queries & issues in a very prompt manner. Driving customers online –Brands can drive customers online through a variety of activities. I am listing a few of them:
- Design a calendar of ongoing web only promotions
- Communicate these promptly to their own user databases & through online marketing.
- Can use different channels of online marketing like - Search, Affiliate, Display advertising
- Look at a life time value of a potential customer. Drive users to register on their website for
receiving information and updates about various offers & promotions
- For higher value products & higher involvement products actively collect intent / leads from
potential consumers and use tele-marketing or offline channel to close the sales.
- Run innovating customer reach programmes online like Click to call.
- Integrate Mobile with web.
__________________________________________________________________________
First published in Images Business of Fashion November ’09 issue
Saturday, January 16, 2010
Using Internet for Brand Engagement & Activation
FMCG Marketers in Indian have generally used Internet like traditional media doing high impact and high visibility advertising akin to television advertising with almost negligible measurability or accountability.
With the onset of Global slowdown there is an increased accountability on brand advertising spends. Brands now are actively looking for more cost efficient ways of fulfilling their marketing objectives. This is where Internet can be used as it is the only medium that is completely measurable right from time of a user seeing an advertisement online to evincing of interest by clicking on it, to measuring of action post the click of the user. This throws open opportunities for advertisers that can go beyond using Internet just as a conventional media into the realm of what is called as “performance advertising”.
The basic currency for buying media on the Internet is CPM (Cost per Thousand ad impressions served). Since internet is completely trackable, there are other interesting payment models available on some inventories that charge on CPC (Cost per click done by a user on the ad) and even CPA (Cost per Action). Action is defined as what the Advertiser wants user to do post clicking on their advertisement, it could be a Registration, Sale, Enquiry/ Lead, Intent for information etc.
A question that is discussed frequently is “under what circumstances would FMCG advertisers need to go for performance based advertising metrics”? The answer lies in the distinct qualities of Internet as a medium. Internet can be actually used & measured for different points in the consumer’s path to purchase / consideration.
Of particular interest to FMCG Advertisers will be the fact that out of the various media options available nothing comes close to Internet when a marketer wants to engage with consumers. This is possible due to the Interactive properties of Internet Medium. Internet can also be used very effectively for Brand Activation campaigns. Further what is most interesting is that Brand Engagement / Activation can be done at very attractive costs and is totally measurable, thereby an Advertiser can actually measure Brand Engagement done in terms of “Cost per User engaged” or “Cost per user Activated”. On the internet, the advertiser can buy online inventory with a defined cost per brand engagement / activation clearly laid down.
Brand Engagement can be done in different ways. Depending on the Advertiser’s communication objectives - It could be creating an application / puzzle / game for a user online where the user can engage with this application / puzzle/ game and in the process soak herself into the core of the Brand communication. A few examples of Brand Engagement & Activation done by Indian FMCG advertisers are given below:
Lipton – Stay Sharp
Concept: Lipton wanted to communicate that the leaves picked for Lipton Yellow Label Tea are a natural source of Theanine, which along with the other goodness of tea can help drinkers relax and be alert throughout the day. For this they an online application where users were encouraged to solve various jigsaw puzzles online with an on ground event that culminated to solving world’s largest Jigsaw Puzzle.
URL: http://www.stay-sharp.in/staysharp/liptonLogin.aspx
Outcome: Lipton’s website states that close to 175,000 users engaged with their brand online by participating and solving various puzzles.
Quaker Oats
Concept: To position Quaker Oats as a healthy cereal, launched a web based initiative called Good Morning Heart.com, the users are encouraged to register on the website and take a test online that shows health of the user’s heart and also gave tips on maintaining a healthy heart.
URL: http://www.goodmorningheart.com
Outcome: The Quaker websites states that more than 120,000 tests have been taken in the past 2 months.
Olay
Concept: Olay wanted to do sampling of Olay Total effects. For this they used Internet marketing very effectively by getting users to come and register on their website to receive their free sample. These requests were followed by a confirmation call and the samples were then couriered to the users.
URL: http://www.olaysampling.com/lms0509/Olay07Oct2009/landingpage.asp#
Peers
Concept: Peers launched an Internet initiative around their Brand proposition of ‘Masoom Pears’. The users (mothers) were encouraged to sign up on their website and upload their Masoom moment, a picture with their child on the website. The reward for doing this was that a selected mother-child pair will be featured in their print advertisement.
URL: www.MasoomPears.com
In the above examples, the most interesting part was that bulk of online media buys were done by the Advertisers on a CPA (Cost per Action) basis. In case of Lipton this meant buying online media on a cost per Puzzle play and in case of Olay on a Cost per registration for request of free sample. Such media buys eliminate any risk for the Advertisers of not meeting their marketing objectives vis-à-vis the budgets laid down.
However till now only a handful of Indian FMCG advertisers have made use of the power of Internet & Online Marketing for achieving Brand Engagement & Activations. There is a tremendous opportunity that still lies unexploited.
________________________
Note: The above artricle written by me was first published in 4Ps Business & Marketing magazine, issue 22 dated 4th-17th Dec, 2009)
With the onset of Global slowdown there is an increased accountability on brand advertising spends. Brands now are actively looking for more cost efficient ways of fulfilling their marketing objectives. This is where Internet can be used as it is the only medium that is completely measurable right from time of a user seeing an advertisement online to evincing of interest by clicking on it, to measuring of action post the click of the user. This throws open opportunities for advertisers that can go beyond using Internet just as a conventional media into the realm of what is called as “performance advertising”.
The basic currency for buying media on the Internet is CPM (Cost per Thousand ad impressions served). Since internet is completely trackable, there are other interesting payment models available on some inventories that charge on CPC (Cost per click done by a user on the ad) and even CPA (Cost per Action). Action is defined as what the Advertiser wants user to do post clicking on their advertisement, it could be a Registration, Sale, Enquiry/ Lead, Intent for information etc.
A question that is discussed frequently is “under what circumstances would FMCG advertisers need to go for performance based advertising metrics”? The answer lies in the distinct qualities of Internet as a medium. Internet can be actually used & measured for different points in the consumer’s path to purchase / consideration.
Of particular interest to FMCG Advertisers will be the fact that out of the various media options available nothing comes close to Internet when a marketer wants to engage with consumers. This is possible due to the Interactive properties of Internet Medium. Internet can also be used very effectively for Brand Activation campaigns. Further what is most interesting is that Brand Engagement / Activation can be done at very attractive costs and is totally measurable, thereby an Advertiser can actually measure Brand Engagement done in terms of “Cost per User engaged” or “Cost per user Activated”. On the internet, the advertiser can buy online inventory with a defined cost per brand engagement / activation clearly laid down.
Brand Engagement can be done in different ways. Depending on the Advertiser’s communication objectives - It could be creating an application / puzzle / game for a user online where the user can engage with this application / puzzle/ game and in the process soak herself into the core of the Brand communication. A few examples of Brand Engagement & Activation done by Indian FMCG advertisers are given below:
Lipton – Stay Sharp
Concept: Lipton wanted to communicate that the leaves picked for Lipton Yellow Label Tea are a natural source of Theanine, which along with the other goodness of tea can help drinkers relax and be alert throughout the day. For this they an online application where users were encouraged to solve various jigsaw puzzles online with an on ground event that culminated to solving world’s largest Jigsaw Puzzle.
URL: http://www.stay-sharp.in/staysharp/liptonLogin.aspx
Outcome: Lipton’s website states that close to 175,000 users engaged with their brand online by participating and solving various puzzles.
Quaker Oats
Concept: To position Quaker Oats as a healthy cereal, launched a web based initiative called Good Morning Heart.com, the users are encouraged to register on the website and take a test online that shows health of the user’s heart and also gave tips on maintaining a healthy heart.
URL: http://www.goodmorningheart.com
Outcome: The Quaker websites states that more than 120,000 tests have been taken in the past 2 months.
Olay
Concept: Olay wanted to do sampling of Olay Total effects. For this they used Internet marketing very effectively by getting users to come and register on their website to receive their free sample. These requests were followed by a confirmation call and the samples were then couriered to the users.
URL: http://www.olaysampling.com/lms0509/Olay07Oct2009/landingpage.asp#
Peers
Concept: Peers launched an Internet initiative around their Brand proposition of ‘Masoom Pears’. The users (mothers) were encouraged to sign up on their website and upload their Masoom moment, a picture with their child on the website. The reward for doing this was that a selected mother-child pair will be featured in their print advertisement.
URL: www.MasoomPears.com
In the above examples, the most interesting part was that bulk of online media buys were done by the Advertisers on a CPA (Cost per Action) basis. In case of Lipton this meant buying online media on a cost per Puzzle play and in case of Olay on a Cost per registration for request of free sample. Such media buys eliminate any risk for the Advertisers of not meeting their marketing objectives vis-à-vis the budgets laid down.
However till now only a handful of Indian FMCG advertisers have made use of the power of Internet & Online Marketing for achieving Brand Engagement & Activations. There is a tremendous opportunity that still lies unexploited.
________________________
Note: The above artricle written by me was first published in 4Ps Business & Marketing magazine, issue 22 dated 4th-17th Dec, 2009)
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