Editor’s Note: At LI we are inviting digital marketing experts of the country to share their opinion on how the market has evolved and the different facets that have attracted or distracted them in 2015. In the first of this series, Amaresh Godbole, DigitasLBi‘s Managing Director for India shares an exclusive guest post.
India INC backs its words with bucks
Digital has been a buzzword in India for a long time now, but barring early adopters, it was insofar limited to lip service. 2015 is the year that will be remembered as the coming of age party for digital in India, with many large MNC and Indian companies committing both money and attention to it.
Digital engagements for major brands in 2015 saw active participation from CMO’s and even CEO’s in many cases. Another indicator of the seriousness with which digital is being viewed, is the move of some traditional marketing and advertising luminaries to digital roles, as well as the elevation of digital marketing leadership into CMO and CXO roles at both client companies and agencies.
The catalyst for this was the exponential increase in penetration (350 Million users online before the end of 2015, as per Assocham) and rapid smartphone adoption thanks to low cost entry devices, fuelled by 3G data. In certain categories such as auto, over 40% of purchase decisions were influenced by online research and content, making digital an imperative.
Others such as FMCG, which are primarily driven by awareness, discovered the mass reach of Facebook with over 100 Million users on a single channel coupled with ultimate hypertargeting capabilities, and the incremental reach proposition of Youtube. This also made online video a formidable proposition, and eagerly adopted, since it was a format marketers have been comfortable with over the years. The popularity of TVF’s ‘Pitchers’ and Hotstar becoming the fastest app to reach 10 Mn users were testaments to the demand for online video content consumption.
Media projections pegged digital at third, behind TV and print in terms of share of marketing spends, with the highest growth rate. This was proved as digital marketing companies saw double digit and even triple digit growth, in a year when many traditional agencies struggled with single digit topline growth. Even more interestingly, digital marketing also commands technology budgets, traditionally controlled by CIO’s and spent with IT companies.
Policymakers gave a further boost to the sector via the Digital India initiative which gained steam in 2015. Keeping the controversy about net neutrality and monopoly considerations aside, Facebook’s Free Basics drive, Google’s upcoming Indian leg of Project Loon and others are aimed at driving penetration down the pyramid.
2015 is also the year when India got its first glimpse of 4G, the ‘Airtel girl’ caught the fancy of the nation, and ‘instant/speed’ memes surrounding her entered popular lexicon with the gusto of Rajnikanth humour. Samsung and others started heavily advertising 4G ready phones, getting the nation prepped for a new year of 4G connectivity.
Digital transformation emerges as an imperative for businesses to future proof themselves
In 2015, India Inc felt the impact of digital disruption of businesses. The funded muscle of ecommerce combined with mobile and hyper local services have given rise to the one touch economy. They are breaking down traditional business models, by challenging modern trade formats and organising traditionally unorganised sectors such as grocery, food delivery, transport etc. This has necessitated many old players to undertake a digital transformation agenda across their business processes.
They are turning to companies at the cusp of marketing and technology to help them transform, thus creating a playing field which includes IT majors, traditional consultancies, and large network agencies. Different solutions suit clients based on category, company culture and vision, with no one player having cracked it all.
Realising the imperative of playing here, agency networks bought out most of the remaining large independent digital agencies in 2015. Only a handful now remain, besides some new shops which have cropped up, many of whom focus on SME transformation.
The changing shape of digital marketing
As a part of this transformation agenda, digital marketing is now required to reimagine the entire customer experience by leveraging the power of SMACI – Social, Mobile, Analytics, Cloud and Internet of things, and deliver omni-channel, hypertargeted and personalised solutions. This requires a width of skills and a culture which allows blending of these skills to work seamlessly together.
While digital marketing companies are working on a combination of building the right skills in house, and contracting others, there has been an emergence of several specialists and micro agencies. Tech shops which specialise in IoT solutions, or out of the box AR/VR solutions are common, but often work as vendors to larger outfits.
The content marketing movement which has been ignited by always on social content, has led to the rise of several independent content shops, including the likes of agile production houses and stand-up comedians. In a trend that should worry agencies, many such as Vir Das and AIB have gone on to create their own agency brands, with a publicly stated intention of cutting out agencies.
Whether this is a feasible long term model remains to be seen, as clients are also showing signs of fatigue managing multiple partners, while trying to ensure all them are aligned to a single idea and brand identity.
As a result, 2015 also saw the growing popularity of the connections planning model, wherein a lead agency drives the agenda with support agencies/specialists working with them to ensure unified storytelling as well as specialist skills.
The other big shift in 2015 was the move from conventional channel and platform buys, to programmatic audience buying. In the west, this model is also starting to be used for TV buys – DigitasLBi North America bought Oscar advertising programmatically in several markets. Programmatic is expected to improve efficiencies as well as provide the base for cross media attribution modelling, the Holy Grail the industry is desperately seeking.
As data driven marketing becomes the norm, Data Science is fast emerging as one of the most valuable and sought after skill sets. It includes paid+owned+earned media analytics, creation of unified frameworks and statistical analysis capabilities.
A result of all these changes is the growing need for technology platforms which can deliver across the SMACI spectrum and integrate with programmatic and real time buying platforms. Adobe, Oracle, Microsoft etc. are all in the race, often collaborating with agencies to get them to CMO’s. Most of these solutions are still prohibitively expensive for standalone Indian P&L’s, but many MNC’s have rolled out the Indian versions of globally licensed platforms.
The Ad blocker debate has raged on for months. However as adoption grows, the industry will need to assess the real threat posed by this service.
Work needs to harness the potential of the digital medium. For instance, several online videos this year, while beautifully crafted, were simply longer TVC’s, rather than a means to lead the audience into deeper engagement with the brand.
Several policy decisions are deemed to be anti-consumer, and the industry needs to play an active role in lobbying with the government, being the closest to the end consumer.
The road ahead
2016 promises to be the next step in the digital maturity curve, with 4G, SMACI, Programmatic buying, Data driven omni-channel marketing growing beyond infancy, new apps and platforms like Instagram, Snapchat etc. gaining critical mass and the continued investment in the startup universe, combining to drive digital innovation.
Going by the emerging trends in evolved markets, the line between CMO and CIO budgets is blurring, and digital marketing companies need to ensure they are in a position to service both.
One of the biggest barriers to sustainable growth is a talent crunch, with clients and digital marketing service providers, all vying for the same talent pool. The industry would be well served to work with educational institutes and invest in relevant talent creation programs to ensure a sustainable quality talent pool is in place for years to come.
And, if you, as a reader, are contemplating digital marketing as a career, this is the time to jump in, you can be assured of being serenaded by the best.