Saturday, May 15, 2010
Gaming phenomenon in India started with the advent of the digital gaming age, when every kid on the block swore by Mario. With technology becoming more accessible, whether in the form of TV, personal computers or the ubiquitous mobile phone, gaming in India cannot be an urban phenomenon for long. The cover story delves deep into this fascinating world of digital gaming to find out ways to harness the hidden potential.
The animation and gaming report 2008-2009 by NASSCOM estimates the Indian gaming industry to reach 830 million by 2012 but its awareness in the common man is still questioned.
With increasing importance of India in the global economy and the promise of a young and vibrant population that is staring at the cusp of prosperity has made it impossible for the major players to ignore India. Companies like Microsoft and EA are planning to corner a big market share in the Indian pie. Microsoft recently tied up with Bollywood movie houses to show trailers of Hindi movies in its Xbox live. Sony and Microsoft also plan to drastically cut the prices of their gaming consoles to appeal to a price conscious Indian consumer.
All this is for a greater share of the pie in a market that is said to be growing at a CAGR of almost 30 percent. But the Indian market poses some peculiar challenges for the global majors. The primary challenge to traditional console based gaming could come from mobile games in India. India has one of the largest installed bases of mobiles in the world and Indians are increasingly taking to gaming on the mobile rather than the traditional console based gaming.
Though, the biggest spoiler to the plans of the global players seems to be the homegrown Indian companies. Indian companies have already evolved innovative models for attracting the Indian consumer. For e.g., Zapak follows a subscription based model that aims at generating revenues through a high user base with low revenues per user. Other companies are giving away the games for free and plan to make money from merchandise.
For quite some time now many Indian companies have been heavily involved in the development of major games. The low cost advantage that India presents has
resulted in the development of many major gaming properties being outsourced to India. Indian companies have played a major role in the development of games like Need for Speed and others.
While there is indeed the ability to develop great games, there is no track record to prove that the Indian companies have the capability to produce a major game. Indeed the few standalone Indian games that have been released have been heavily panned by critics for unimaginative game play and shoddy graphics. There is also an excessive reliance on clichéd scripts and rehashed stories.
What the Indian gaming industry needs is one major bonafide Indian game to become a major crossover hit. That might prove to be the tipping point for the nascent Indian gaming industry. Till then, the question of whether the Indian players can stand up to the might of the global giants remains open.
Console Wars: The Next Generation
The tech-world is known as an unforgiving place, but even by its ruthless standards the gaming console industry has a degree of cruelty that is perhaps unmatched in any industry. Consider this: all the major players of gaming consoles in the 70s and the 80s have practically disappeared from the industry. The list reads like a veritable roll call of the software industry: Atari, Mattel, Nokia, Philips, RCA and the list goes on. Two of the top three players in the industry today are names one would not have dreamt of associating with the gaming world. Nintendo, Sony and Microsoft rule the roost in the console world today and they do not look like giving up their positions any time soon. But the fight to reach the top is intense and the competition is tough so much so that these battles are being called the console wars in a parody of the famous cola wars that took up much of the marketing mind space in the 20th century.
The industry has tended to be dominated by a few leaders but the identity of these leaders has rapidly changed over the years. Nintendo once had a stranglehold over this market with an almost 90 percent share of the market in the early 90s but the arrival of players like Sony has rapidly eroded that share. Microsoft is the latest player on the global stage and has managed to capture a significant market share in a short span of time.
Focus by the big players has been typically on a low pricing strategy in the hope that the revenues would be generated from the royalties on games. This has been adopted with so much fervor that it has been estimated that Microsoft loses almost a hundred dollars on every Xbox that is sold in the market. The console makers have realized that having the largest number of installed machines is more useful for long term gains.
The console makers have always made their biggest profits from revenues generated from games rather than from the actual sales of the consoles themselves. The console industry is a market that is heavily dependent on the sales of hit games, games that are usually provided by third party players. For example the tremendous success of Sony’s Playstation2 is almost entirely attributed to the release of several critically acclaimed games that were based on the platform. This excessive dependence on a third party is a high amount of risk and the players in the industry have been trying to mitigate this risk by several means. Sony has exclusivity contracts with many software developers that give a sole right over the games developed by them. Microsoft is looking to expand into the games software market. Its acquisition of the Halo franchise has given its efforts a major boost in this area.
The gaming console makers however face serious threats from two non traditional sources of competition i.e. the burgeoning mobile gaming and social gaming sectors. These two have huge installed bases that would make them serious competitors to the console giants as standalone gaming consoles are replaced by more integrated devices par
ticularly ones with more mobility. The console industry is going to be an interesting watch over the next few years and it could be one hell of ride for the players.
PC Gaming: The Inside Story
Whenever someone talks about marketing and gaming we imagine PS3s, Xboxes, Wiis, Gameboys and a varied range of other consoles. The reasons are obvious – you can sell consoles, you can sell their accessories and you could sell their games. No one goes on to talk about PC Gaming, because no gaming company can make profit out of selling PCs. In order to figure out the potential of the PC gaming market, we start with the present gainers in the industry, sketch a profile of the average gamer to know how to market to them to make PC Gaming more profitable as an industry.
Who are currently making profits from PC gaming?
The logical answer to this would be the people developing the games. However, a large portion of their profit is eaten into by gamers who use pirated copies of the games. Games like the Gas Powered Games’ Demigod force you to play online, leaving very little scope for pirated copies to have an effect on their sales. Unfortunately games like these do not have any substantial fan base because whatever new technologies are used to ensure that piracy is kept in check, it’s just a matter of time until someone finds a way around it. The next logical answer would be PC/accessory manufacturers. This is largely correct. Most computers and laptops nowadays come in personal, professional and gaming models, each of them having superior configurations compared to the previous. “However, the graphics card is something whose applications lie majorly in high-speed on-the-edge gaming. Starting from display cards, to fully fledged graphics processor units, every gamer will agree that this is what eventually drives their entire gaming experience. Hence, graphic card manufacturers are the ones that depend most on games. No wonder one can find companies like Nvidia and ATI sponsoring gaming events.
Next on the list come the cyber cafés and gaming parlors. They provide the convenience of playing on LAN and a high speed internet connection to play games online. Also, they avoid the hassles of setting up of games over LAN.
So what is the average gamer like?
According to Deepak Yadav, a software professional and an avid gamer, he spends 6-10 hours weekly on PC games. Akshit Kona, another software professional-gamer spends somewhere between 12-16 hours on PC Games. Around 90% of the games are pirated, the rest are purchased. They visit the Zapak gaming parlor every third week. Deepak changes his headphones, keyboard and mouse every 3 years. About the types of games they play, they both prefer FPS and real-time strategy (RTS) games over massively multiplayer online role playing games (MMORPG). To them, MMORPG games are a severe waste of time and effort, without any real ‘action’. These sentiments are reflected by most gamers. Their favorites include Age Of Empires-II (AOE-II, RTS), Warcraft III: The Frozen Throne (W3: TFT, RTS), Defense of the Ancients (DotA, RPG+RTS), Heroes of Newert (HoNE, RPG+RTS) which is a mod on W3: TFT, FIFA 2008 (Sports) and Counter Strike (FPS).
Analysis of the choice of games reveals that they prefer games which are free or have a worldwide support (and acceptance) of pirated versions of the same. The typical game can last between two minutes to one hour, much less than what your typical MMORPG World of Warcraft (WoW) lasts.
With time and cost being separated out as the two main factors, it is obvious to see why games like Demigod do not succeed. Demigod provides hardly any innovation over games like DotA, yet they charge a lot and make game play a hassle by forcing players to register online.
The average consumer of PC Games needs to have a supply of money and time, but they only spend on games to the extent that they feel that they’re getting back more than what they’re investing in terms of enjoyment and time well spent.
Who have the potential to make profits from PC gaming?
Companies could possibly look at in-game branding. But the thought of renaming Guinsoo’s Scythe of Vyse to KFC’s Chicken Converter is something that will scratch the blackboard of every gamer’s heart. However, less conspicuous in-game branding could be possible for role playing games (RPG) and first-person shooters (FPS).
Malls/Supermarkets could open gaming parlors. These would attract a totally different market segment to the malls and there could be a lot of retailing for the gamers. Retailing and merchandising can be undertaken on a large scale in metro cities. T shirts, coffee cups etc. with logos, slogans and quotes for the gamers have a huge potential. An avid generally plays online the whole night and therefore need their regular dose of caffeine!
More global competitions could be held. Whether a team is n00b (newbie) or 1337(elite), the exposure of playing with such teams should be a good learning experience. Gaming is an urban activity, and gaining more exposure would only be beneficial for the fledgling sport.
All of these factors look good on paper, but there is something without which gaming will not survive. Acceptance. Parents look at gaming as an unhealthy habit, a dangerous distraction. Even the government doesn’t promote gaming. The only team playing DotA to represent India in the WCG (World Cyber Games) is Team eRRoR. A relevant piece of information: The national sport of Singapore is ‘cyber-gaming’.
Urban India would drive the growth in PC gaming for India. The right strategy would involve increasing the awareness and acceptance among the target group and their peers also first. The gamers’ need to express his imagination can very well be captured through retail and merchandise; an almost untapped market in India. It is high time that the industry wakes up to the psyche of the Indian gamer.
The Rise and Rise of Social Gaming
A games developer called Zynga engages in a direct confrontation with the Goliath social network Facebook over revenue sharing, and wins. It’s no longer the proverbial David; it beats several big players when it comes to numbers: it has over 230 million monthly active users, research analysts say it would be worth $5bn if it were publicly traded. From revenue estimates, they expect the group to hit $1bn in revenues by 2012. No wonder, from Apple to ESPN, everyone seems to be eager to jump onto the social gaming bandwagon.
But the industry is highly risk-prone: it has a dominant player (Facebook & its ally Zynga) which takes in more than 2/3 rd of the market, recoveries are not through the user in one-time, heavy subscription fees; it is an industry for only the patient players. Then there is the threat of established game developers consolidating through acquisitions, for e.g., EA acquiring Playfish.
The challenges lie beyond too: innovation in the games is a must, as is the speed and cost of development. This is where India with its vast pool of programming talent and reputation as the One-stop destination for game development can score high. The reputed firms dabbling in game development for the big names should not miss this bus.
But none of this bothers the social gamers; they play Farmville and Bejeweled even after filling up innumerable surveys to play yet another round and often spending hard cash too. This game has only just begun.
Gaming in the Indian Mainstream Media
The common man’s exposure to gaming came when the very first mobile phone games were introduced. Although Snake cannot be compared to Counterstrike, it did start the gaming revolution. Dedicated gaming phones were not far away and soon there were hundreds of games available for them.
There have always been tech magazines running reviews on gaming consoles and new games, but with the advent of the 24-hr news channel, these reviews became much more accessible to the layman. Also came along channels catering to niche audiences like UTV Bindass which promoted gaming in a much favorable light.
The next big appearances for gaming were the advertisements on TV. The badly-panned commercial for Micromax Gamolution phones used cinestar Akshay Kumar to create a brand connect. Earlier, he had promoted Xbox 360 with cricketer Yuvraj Singh.
But the most recent and talked about gaming ads have been the ones for Godrej GoJiyo, which is a virtual world modeled on the immensely successful Second Life. It asked viewers to log on to the portal and make their avatars; possibly a new way of engagement being tried by Godrej.
What remains to be seen is whether gaming in India gains acceptance as a mainstream form of entertainment or remains a tool to engage the niche audiences alone.
An Interview with G. Ramprasad, CEO, Tata TELESERVICES LTD.
Markathon: Share with us some unforgettable moments in your corporate journey right from being a Branch Sales Manager at HUL to now being the CEO of Tata Teleservices Limited.
G. Ramprasad: One of the most unforgettable moments was – receiving a call from my ex boss from HUL, a full one year after I’d left the company. He thanked me for the system and process improvement initiatives I’d started off, which resulted in that region achieving superlative performance! This vindicated my strong belief that a manager’s worth is truly known when he/she is not on the scene, but the legacy is paying rich dividends for the business.
In Parryware, where I joined in 1999 as Head of Marketing, a key product, Cascade Range of sanitaryware, was declining. It was a significant contributor to the profitability of the business and newer, cheaper competitors were making a lot of headway. There was a lot of clamour in the system to “cut costs” and thereby reduce price. However, Cascade was then relaunched with better features. The better features meant HIGHER costs and the price was also taken up accordingly. Backed by a strong communication support, the relaunch was a resounding success and Cascade was once again put on the growth path. So, the principle of “investing” back in a product and improving the customer benefits (also called “features”) and charging a higher price for this, is a stronger and more sustainable platform than just taking the easier route of chopping costs and dropping price.
Yet another unforgettable moment has been the recent Tata Teleservices resurgence. In Tamilnadu, Tata Indicom has had a sea change on the customer services front. From an operator which was considered a laggard, it has bounced back over the past one year or so to attain a leading position. Even though the market position is still below potential, the change on the customer service front signals a clear shift in trajectory. Here, the principle has been – when all else seems lost, latch on to the straw of customer service, which can turn into a lifeline and, in due course, a bridge to success. This is especially applicable in a “services” business.
Markathon: Telecom sector is presently “the” sector to be present in and there are numerous players entering the fray. Is there a demand for so many players? Or is it just a temporary bubble?
G. Ramprasad: The telecom business still has a lot of juice! India is still one of the relatively lower penetrated markets at about 50 %, even though it’s got the second largest number of wireless connections in the world with over 600 million subscribers (and growing by about 15+ million per month!). Further, broadband is still only 8.75 million and that’s a huge area waiting to explode. Already India is very big on mobile internet traffic, next only to the US. These figures indicate the potential that’s still waiting to be tapped and also the way the future of this business will move. From a preponderantly voice dominated revenue, there will be a shift towards data and value added services. This has its own momentum and will drive the business in a different way. Government departments have started a lot of e-governance initiatives, which will entail the use of internet in a much bigger way and this will be a focus for telecom companies.
Markathon: Tata Indicom has highlighted the advantage of voice clarity in its ads stressing upon of the “Advanced Digital Network”. You have also tried to connect to people through “Suno Dil ki Awaaz” campaign. How did you wish to position Tata Indicom in this hyper competitive market and how successful have these campaigns been in doing so?
G. Ramprasad: In the current scenario where most telecom networks are badly congested, Tata Indicom’s excellent network is a strong advantage. Over the past five quarters, Tata has been rated the “least congested network” by the Telecom Regulatory Authority of India (TRAI) through independent surveys. Going forward, Tata Indicom will be the brand for the Prepaid Mobile Services, Tata Photon for the Data services and Tata Walky for the fixed wireless category. This will enable the business to address different segments of customers and different market opportunities through clearly positioned brands.
Markathon: To what extent do you see value added services as a significant factor in consumer’s decisions of selecting a mobile service operator today?
G. Ramprasad: Without doubt, Value Added Services are critical in a consumer’s decision to select a mobile service operator. The proliferation of “smartphones” is testimony to this. The rapidly falling costs of mobile handsets and the simultaneous increase in the handset features will aid this process. Technologies are also evolving rapidly. Social networking is catching on very fast and this is an important driver of mobile usage. Mobile is now used for banking transactions, information exchange, and even entertainment (mobile television is a popular service from Tata Photon). Customers are willing to pay for all this as it’s literally helping them live life by pressing buttons! From a financial angle, better VAS penetration can make the difference between profit and loss in a hyper-competitive market
Markathon: Tata Photon data cards have also been a success story for you. What is your assessment of the potential of wireless data cards market in India?
G. Ramprasad: Tata Photon + has been a huge success and coupled with the boom in the sale of laptops, more and more people are opting for mobile internet connectivity. CDMA technology lends itself to superior data access and this makes Tata Photon + a preferred choice for those looking for mobile internet access. Broadband internet access has been limited by the viability and feasibility of laying wires. Hence wireless technologies will certainly play a key role in India for the burgeoning requirement of internet access.
Markathon: You have recently joined hands with Olive, Blackberry and Samsung for promoting Tata Photon. What has been the thought process behind them and what future growth strategies are in the pipeline?
G. Ramprasad: As mentioned in the earlier point on Value Added Services, it’s imperative for a mobile operator to offer differentiated service of value to the customer. Olive Netbooks have Tata Photon+ integrated, offering High Speed Internet Access (HSIA). Select models of Samsung (Corby) have Tata Photon TV – a high end value added service. Blackberry, of course, is a must for the corporate executive. These are all intended to drive the data usage, which will be the key factor for revenue growth. Alliances with device manufacturers (smartphones, netbooks etc.) will be a key element of the strategy.
Markathon: With so much of money being pumped in by multiple telecom operators for buying the spectrum for 3G services, what are your projections about the return on this huge investment in the long run in such a competitive sector?
G. Ramprasad: While it’s too early to comment on this, companies in India will certainly bear in mind the experience of earlier 3G auctions in the US and Europe, when companies overbid in the auctions and couldn’t keep their commitments or went under due to the burden.
Markathon: In your corporate life, you have been the driver of a business resurrection, expansions, formalising systems etc. How crucial do you think your MBA education was in performing such tasks? Do you think there is anything that a present day MBA graduate lacks?
G. Ramprasad: The MBA education arms you with a good perspective of business and a variety of tools and techniques. This has certainly helped me in my career. Of course, learning is a never ending process and I continue to try and keep myself updated on the current
developments in thinking on management.
With regard to what should be the focus for today’s MBA graduate, the GEE would be a lot more important than ever before. GEE is – Governance, Emotional Quotient, and Entrepreneurship.
These are not “subjects” in an MBA program, but are critical for today’s business leader. Whether as a manager in an organization or an entrepreneur with an own business, these factors are critical. It’s not that an MBA “lacks” the GEE, but needs to be very conscious of these aspects and develop knowledge, skills and competencies for a high level of GEE.
A brief elaboration of each of the elements of GEE:
Governance: with the recent turmoil in the financial markets which have hemorrhaged the economies of entire nations, the need for high order of integrity and probity is of paramount importance. Abiding by governance requirements in both letter and spirit is therefore critical for business leaders. Apart from legal compliance, a high level of moral and ethical behaviour and approach is a pre requisite for a top order business leader.
Emotional Quotient: In these tumultuous times, with tempers and emotions running high, the ability of a business leader to maintain equanimity and poise is essential.
Entrepreneurship: A business leader in a large corporation is also required to be entrepreneurial in order to grasp and leverage emerging opportunities, as also face up to challenging situations – much like an owner-run business.
Jigar Parmar & Pranav Goel | IIM B
Well, they are “Brand Ambassadors” who have become synonymous with the product/brand they promote. In today’s world, the company invests heavily on a Brand Ambassador as it can really put them ahead of their competitors. Ambassadors are powerful means to attract the consumers.
Study shows that Hyundai car sales zoomed once Shahrukh Kahn endorsed it. The brand endorsement business is worth about Rs 1,000 crores, including star appearances and events according to Manish Porwal, CEO of celebrity management company, Percept Talent Management.
So, Who is a Brand Ambassador?
According to Wikipedia, A brand ambassador is a well-connected person or a celebrity or a character that is used to promote and advertise a product or service.
Brand Ambassador is more than just a tool for advertisement. They portray the image of a brand. We can broadly classify various brand ambassadors into four types:
- Characters (Zoozoo, Fido Dido) Characters are created on paper by artists who don’t have any connection with the brand/product. They are just images which according to them will catch the imagination of the public. Characters are perhaps the best among all when it comes to imprinting themselves on consumer’s mind. Humorous, catchy characters help a brand to attract the consumers. Few of the examples are Fido Dido (Lehar 7’up), ZooZoo (Vodafone), and Utterly Butterly girl (Amul). These characters have become so famous that they themselves are brand in their own right.
- Celebrity (Shahrukh Khan, SaniaMirza, MSD) Perhaps this category is the most well-known among all. People look up to celebrities for almost everything. What they are wearing, eating, which phone they use etc. So, if a product is promoted by a celebrity then people would be attracted to buy that product to imitate their favourite celebrity. They feel that they are doing some exclusive thing which only celebrity can do. SRK promotes Nokia and all his fans think that Nokia is the coolest mobile available. They relate themselves to SRK and feel proud of it. This category of brand ambassadors are probably the costliest of all, since endorsement fees of a celebrity is very high. In fact, almost 50% of advertising budget may be used to have the celebrity endorsing one brand. (Reportedly, Amitabh Bachchan charges around 10-12 crore for Emami!!).
- Employees themselves (Ajay Bhatt –Intel Fame, Kaka/C Ronaldo when they are promoting Real Madrid) A brand is built with its effectiveness and its meeting the expectations of the consumer. Employee as a part of the development of product has an inherent clarity of what a brand is all about and what it promises to deliver. He/she has the insights about the product which cannot be reproduced with other promotional techniques of using celebrity, characters etc. Also, it shows the sense of efforts put in by the creator for a particular product which consumer wants to trust. Using employees for brand development allows companies to minimise their promotional costs. It promotes the sense of trust and belongingness in the employees towards the company. All in all, it impacts positively both to the external and internal environment of an organization. Take an example of the Intel advertisement, in which co-inventor of USB, Ajay Bhatt is used as a brand ambassador with the tagline “Our rock stars aren’t like yours”. This depicts the culture of innovation in the organization and how it is valued there. It impacts the viewer with the sense of pride, thriving for the constant improvement in technology and wants to be part of it. But it largely depends on the product segment and the customer base the company is targeting. In the above example, the target is the technology conscious consumers market where this strategy is useful.
- Consumers. (Yes, you as a consumer can be the face of the product. Harpic, Ariel uses their customers for promotion)It is rightly said that “consumer is the king of competitive market”, a consumer can make or break a product. It is necessary that he/she is satisfied with the product. The message of the use of a particular product is required to be expresses to her, consumers as brand ambassadors is one of them.This kind shows the consumer using the product in the promotion itself. It reflects the customer satisfaction at the initial stage inducing the target audience to purchase it.Consider an example of Harpic toilet cleaner, in which consumers are shown using it and satisfied with the results of the product. It depicts the sense of reality in the minds of persons viewing the advertisement. They tend to believe what is shown in it and correlate it with their day to day life.
Let’s see what market study has to say about effectiveness and impact of above categories of brand ambassadors.
As apparent from above results of a survey, characters are in vogue when it comes to choosing brand ambassadors. Character can be a cartoon character that gives your company, product, service or brand unique, memorable qualities that resonate in the market place.
When all is said and done, purchasing is still an emotional decision making process, and if you can nudge someone in your direction with an advertising icon that evokes a quality that endears you to prospective customers, then you have a huge advantage.
Characters are best at this. They can easily capture a place in people’s minds due to their intrinsic characteristics. ZooZoo has funny facial expression along with its looks. Fido Dido was famous for his weird look. People were charmed by the Utterly Butterly girl. Characters can become bigger ambassador then celebrities.
Like it or hate it, Zoozoo itself has become a phenomenon. The number of Facebook fans of Zoozoo have swelled to 3,14,611 (as on August 14, 2009) far surpassing the number of fans for cricketing and Bollywood icons like Sachin Tendulkar and Amitabh Bachchan, legendary superheroes like Superman and even comic characters like Asterix.
Now, one has to be careful in their assessment of character. What was the objective behind these character brand ambassador. Utterly girl boosted the sale of Amul product immensely which was the objective behind creating the character.
Yes, data shows that Zoozoos were not able to create the kind of sales figures which analysts were hoping for. But Zoozoos were never meant for increasing sales. Vodafone wanted a new identity post Hutch acquisition. They wanted to come over a “pug” which people associated with only Hutch. So, objective was to create a buzz/awareness about Vodafone. And did Zoozoo succeed?? The answer is resounding yes. People call it a Vodafone Zoozoos. IPL 2 was memorable and Zoozoo played a part in it and Vodafone got a required coverage. Yes, there is a separate theory that brand requires an ambassador during its nascent stage only and once brand becomes popular and recognizable, they require less of endorsement. To some extent this is true for fairly recognizable brand as they already have a place in public psyche.
But in today’s ever changing market scenario, no brand/product can afford to remain stagnant and the business launches new products and new brands daily. Even if they don’t launch a new product, they would like to revamp their existing product mix.
And in such cases, brand ambassador plays a crucial role in creating a market space for new product and making existing consumers aware of a revamp. E.g. Titan roped in Aamir Khan to launch a campaign called “A watch for every occasion”. Though Titan is a very well-known brand, they wanted their customer to know about new range of watches and Aamir Khan played a crucial role in it.
With all the discussion about the types of brand ambassador there comes its relevance with the type of product. The way of promotion and criteria for selection of brand ambassador type depends heavily on the product segment. The ultimate aim is to transfer the “basic message” of the product to the user.
How well this message is conveyed to the consumer depends on the selection of the type of branding and the decision based on the preferences of producer as well as
Rohit Arora, TAPMI
Internet has emerged as a prominent tool for marketing against the conventional offline methods in last few years. There is no doubt on the fact that online marketing has been accepted widely as one of the most promising tools for marketing since then. Still, in spite of its wide reach and low cost it has been somehow restricted to online companies only. A majority of offline businesses have not really accepted the fast growing digital world to promote their products and offline methods are still the first choice there.
A survey report by Livemint.com(2009) shows that the advertisement expenditure on internet is very low in comparison to the offline media expenditures like T.V. and print advertisements. And among the leading supporters of online marketing channels, IT sector spends the highest amount on online advertisements. FMCG sector, consumer durables and consumer utilities sector which account for around 70% of the total ad expense account for a share of mere 30% in online ad expenditures.
A survey of 2300 internet users conducted by iProspect with JupitorResearch in 2007 showed that 67% of online search users are driven to perform searches as a result of exposure to some offline channel and 39% of them bought the product they were seeking. The same study also found that 68% of people use a part or the full name of the company/product or the service in the search engines to find the desired result. The results show that most of the offline materials don't really help the customers to find the company's Web site. People who already search online and take the pain of looking for the product using a search engine without guidance can be easily targeted by the companies by providing clear, explicit directions.
Integrating the efforts
As of now, attempts by any traditional brick and mortar company to advertise their online proposition have been mostly limited to incidental advertising where the website URL is added as a footnote with no attempt to drive a web response. Same stands true for the purely web based companies who clearly neglect the potential of offline marketing. Apart from a few exceptions like Shaadi.com, monster.com etc. most of the online companies forgo the opportunity to avail the effective offline channels.
Offline media for marketing like T.V., radio and print media are still the most effective channels to grab customer mindshare, albeit much costlier than online media. But if the cost involved can be justified by the increase in number of online traffic and increased awareness among the customers then why restrict the marketing efforts to online media only?
At the same time, the amount of information that can be provided by a website regarding the product can never be communicated by a 20 second commercial or a print advertisement. Most of the internet users were prompted to use search engines for product or company information by the lack of same in offline advertisements.
Internet based promotions make an impact on both customer and business-to-business marketing. Today’s marketers must use an optimal mix of integrated online and offline promotional techniques.
Quaero & ESPN’s approach combines both the online and offline sources, to develop the most holistic view of the customer possible. It integrates offline data from ESPN The Magazine, ESPN Shop, Rewards Card, and demographics, with all online sources such as pages and video viewed, activity level, ads viewed and clicked, geography, domain, operating system language, etc.
The integrated database provides ESPN a complete view of customer activities and behavior. The data and all the resulting analytics are then used to enhance customer interactions.
A very successful initiative to integrate online efforts with brick and mortar business was the ‘Gang of Girls’ initiative by Sunsilk in year 2006. By March 2007, the number of registered members in the website had crossed the half million mark, with almost 30,000 gangs. According to HLL, the initiative had resulted in both increase in sales and market share.
Similarly, a retail shop can encourage its customers to visit its website where they can discuss the value offerings with other consumers, provide feedback, rate the products, join various communities, communicate their expectations, play games and can be informed about the latest additions in the shop.
The main focus of the website here is not to make the sale but to drive the same customers towards the physical location of the shop. It will not only help in retaining the current customers but will also help in making new customers online, through socialization and word of mouth publicity.
Most of those companies which have tried to integrate their online and offline marketing efforts have not been cautious enough while implementing it. Their advertisements either failed to direct the viewer towards the correct URL or were wasted because of lack of useful data on the website.
While companies use internet as a medium to increase awareness about their products and building brand image, engaging the customers in different activities have not been among the prime agendas of their online marketing activities.
Few of the other common mistakes which companies need to avoid while integrating their marketing efforts are:
· URL published with advertisement not properly highlighted
· Discontented consumers owing to poorly designed website loaded with irrelevant information. Using URL just to count the number of visitors in order to find out the effectiveness of the advertisements.
Mistakes like improper information on the website can make a large impact in integrated marketing because the advertisements direct the users to a world where every bit of information is just a single click away. Absence of a customer-oriented website may push the customer towards alternatives making it important to plan properly before integrating the two biggest channels of marketing.
Famous American writer Jared Sandburg wrote, “One of the Internet's strengths is its ability to help consumers find the right needle in a digital haystack of data.” It’s just a matter of time when the industry will realize the need to guide consumers towards the search of that needle. Marketers of future will need to look for innovative pathways to reach their customers and integration will definitely be one of them.