2015 – Exploring the iceberg


2015 – Exploring the iceberg

 

The past years 2013, 14 we touched the ice berg with higher digital spends, long format story based ads, adoption of online shopping and flourishing of e-commerce businesses and better and more impactful government advertising. In the coming years we shall explore the iceberg and comprehend its magnitude. The developments in 2014 will continue and better in 2015 and also the year should see (I hope) new trends responding to the changes happening around.

The adoption of internet and its influence in communication and advertising will continue with higher growth rates. A recent report by McKinsey & Company and Facebook said India would add close to 300 million internet users by 2018 to make up an online population of just under 500 million people. While this trend is acknowledged by the advertising industry, the adoption of this trend in the rural areas is still to be explored. Few pioneers like HUL with its Kan Khajura Tesan have taken steps in this direction; with more than 80 million internet users and increasing consumption of low cost, internet enabled smart phones in the rural markets I hope to see more work in this space. Internet and mobile multimedia is used more for entertainment in the rural areas unlike urban where the use is more for social purposes. This insight should lead marketers to create more entertaining content for the rural population in 2015. What happened on ground all these years should go online, catering to masses; things like music, performances, plays and movies are likely to go online and accessed through mobile phones.

The rural markets have been paid attention in some industries but there are certain trends that will influence consumption and communication in the rural space – like rural doesn’t always mean poor and bottom of pyramid, there is rural rich as well and they are consuming brands; with luxury car brands, branded consumer durables and electronics getting a fair share of their revenues from the rural space. Another very important trend is about the rural children with access to satellite communication and internet are growing up with similar aspirations like their urban counterparts. Hence we can’t discriminate between an urban and rural kids as they are viewing the world with same lens. Hence the psychographic targeting will become more important than geographic targeting. Going forward rural marketing will go through a sea change.

Another trend that took shape in 2014 is the spending on the digital mediums and this will continue unprecedented in 2015. According to the latest findings of the Digital Advertising in India Report by IAMAI and IMRB, the online advertising market in India is projected to reach Rs 3,575 crore by March 2015, a growth of 30 per cent over last year. Along with increasing spends what was seeing in the year gone by and also with their plans for coming years was the maturity of the clients w.r.t. digital adverting; they are taking bold decisions and are understanding the immense possibilities that comes with digital. Having CMTO i.e. Chief Marketing Technology Officer will become common in the coming years.

The next trend is a problem of sorts which will aggravate in the coming years, and what needs to be seen is how the industry deals with this. The trend is that many category of products are becoming commodities due to the presence of search and aggregating technologies; they loosing brand value and hence the ability to charge premium for branded products. Take for example the airlines industry where once the brand was the most important variable in the decision making criteria i.e. business travelers sweared by Jet Airways. Now due to the presence of google and other aggregators which throw the cheapest tickets for the searched routes, price has become the most important variable and the industry has gone into this vicious cycle of downward spiraling prices. This leads to a compromise in services, losses and hence today a profitable airline is an achievement. This is true for many industry like many financial services and also consumer durables where the customer may visit a retail outlet to get all the information related to a product but purchase online. The concept of branding that created emotional connect with its customers and there by commanding a premium is failing to do so in spite of increased investments.

With most activities in the purchase process happening online the scope for creating human connection is reducing and hence in the coming years brands will be redefined by the experiences they create online and offline. Marketers have forgotten this and are now having a very transactional relationship with their customers over the internet and emotional affinity is taking a back seat. I hope in the coming year some will wake up and act to break this spiral.

Some other trends that will take off from 2014 is rise of e-commerce and online shopping, the online shopping behavior that was seen during Diwali in 2014 will continue in 2015 and players should build their infrastructure accordingly. Making ads for government which was seen below dignity of any professional advertising agency has changed for good. With the new government’s progressive vision, today advertising agencies take pride in contributing to governments actions. Corporates, agencies and people all are participating in issues of national importance, this was seen in the Swachh Bharat campaign in 2014 and going forward more such campaign and better integration will be seen.

Being more selfless, fresh, more engaging and telling stories that connect with the people will be the mantra in 2015. We saw hints of this happening and some pioneering brands and agencies working in this direction; if this is the take-off, 2015 will see the real flight and that makes it an exciting place to be and to watch out for.

 

Note: Originally published in the Financial Express in early 2015

 

 

 

 

“Purposeful Inventions”


A purposeful invention will always find a place in people’s lives. History endorses this view; there are many great inventions like the Q-Drum, which never found a place not because the invention is not great but because it did not solve the complete problem of the people it intend to solve.

I believe there are three kinds of inventions: 1. Stems out of the inventors intuition, which will be awarded and hailed by the scientific community. 2. Stems out of a perceived need by the inventors, which may or may not find a place in people’s lives but will be appreciated nevertheless.  3. Stems out of deep understanding of a human need, this not only solves the problem it often changes peoples lives.

Forgetting inventions for a while lets look at some new brands and their appeal; lets travel back and look at Air Deccan, what went right? Why a self-proclaimed cheap airline succeeded when a cheap car like Nano failed? Why Go Air is considered an efficient airline not a cheap one? Why pundits are excited about Bajaj’s RE60? Why supersonic Concord failed?

All enterprises start with people and end with people, if you view complex business or marketing problems through human lens, you’ll see a more realistic, relatable human problems and to solve them you need to understand the basic human need not greed, for instance human greed says more people want to fly faster at higher price thus born Concord, whilst human need says more people want to fly for lesser cost thus born Airbus. Now it’s obvious, who was successful? Therefore the moral of this story is Airbus was a purposeful invention and Concord was an intuitive assumption of an inventor.

Lets take Captain Gopinath’s Air Deccan, which was positioned against train travel and spoke to aspiring middle-class millions to experience flying versus post takeover of Deccan by kingfisher to form Kingfisher Red spoke to regular flyers and offered a cheaper and restrictive service offering, which was rejected by the regular flyers as they did not want to feel as deprived passengers suffering from poverty and the attempt took the pride and prestige of flying away. Captain Gopi’s invention was purposeful as it made millions on train travelers realize the dream of flying. Taking a leaf out of this experiment Indigo did not use cheap flying instead spoke about efficiency and made people who secretly want a cheaper option argue for efficiency in service and on time arrivals. In fact on-time arrival is a fantastic rationale to shift from an expensive luxurious full service airlines especially in an era of austerity.

Now to my favorite Nano versus RE60. Tata’s took the engineering challenge of building a one hundred thousand rupee car and managed to deliver close to one hundred and twenty thousand rupee car. Fantastic Invention “The cheapest car in the world” Bravo. World applauded Auto shows went gaga. But the brand failed miserably, reason: no one ever asked the Indian consumer weather he wants to spend an hundred and twenty thousand hard earned rupees on a cheap car, which does not give him any status in the society? How could the brand find a place in peoples lives if it or its inventors does not understand people’s needs? People wanted a Santro, an Alto and an Indica with all the luxuries, however small they were. Indian middle class was seeking stature and pride of luxurious living, which both Maruti and Hyundai understood completely and Tata Motors with Indica to some extent.

The case of RE60 is completely different, Rajiv Bajaj is a very passionate and a smart inventor, who believes in engineering solving problems of people therefore a purposeful inventor, whose invention of DTSI technology solved an unique problem of Indian bikers who want maximum power with minimum fuel, he solved this issue with a simple invention of two spark plugs in the combustion chambers instead of conventional norm of one, which increased the combustion efficiency to give more mileage and power, people lapped-it-up and put Bajaj on a technological pedestal.

Coming to RE60. He took the challenge of solving mass transportation in urban and rural India, the current mode of transport of auto rickshaws is unsafe and relies on old technology all parties acknowledges that, be the RTO’s, Auto Rickshaw owners and the commuters, they all seek an up gradation of technology, Bajaj found a purpose. Single mindedly concentrated on Auto Rickshaws and its drivers and found a meaningful purpose in up grading the technology by adding another wheel to make a four wheeler and the life of the driver by giving him a car to drive and an extra capacity of seating and to the commuter a safer option of commuting. Thereby extending an undisputed offering to the administrators.  Bajaj kept the eye on their consumers and never let it weaver toward competing with Nano or pleasing Nissan.

Wonder why companies run by people fail to understand people.