Sunday, August 9, 2009

“ I know which half of my adverting was wasted”

The Marketing Effectiveness conundrum

The need for accountability on the issue of effectiveness of marketing and communication has been discussed in many meetings many a time, but the progress has been tardy especially so in India. Now this is probably because we find it quite convenient to say that this is one of the imponderables and really nothing much can be done about this. The general alibi is that not even in the most advanced countries, with their rich databases and research spend are they able to get a handle on this.

How did this mind-set come about?

Lord Lever-Hume is reported to have famously said “I know half my advertising is wasted, but I do not know which half”. This was probably a fact of life 50 years ago and it struck an immediate chord with the marketing folk, and thereby gave us marketing folk a great way to get out of the uncomfortable questions on effectiveness and accountability. While the impact of advertising was lauded when it led to increased sales or people noticed the campaign, it was not to be quantitatively evaluated by the standard methods as the impact was many dimensional and over time. The advertising agencies supported this stand as research and data driven accountability is seen as making a creative profession accountable to bean-counters, who have no idea of the power of communication and hence this issue was best avoided by all concerned.

In India, the other alibi has been the availability of good data. Since the data is limited (and this is self fulfilling) or not good, it is better to go by the gut. Now, one point of view on marketing ideas is as good as the other – so which campaign runs depends on who gets to make the call. Hardly a recipe for producing consistently good stuff.

Now let us consider some changes that have come about largely in the last 10 – 15 years that has changed the scenario quite substantially across the world and in India

• Tremendous amount of data is captured at different points both within the company and by research and other agencies, making tracking of impact with all its complexity distinctly possible
• IT has revolutionized the amount of complexity that can be handled, for e.g., it is possible to distinguish the impact of one media (out of many used) on the sales impact through regression or other statistical methods. These technologies are constantly being improved.
• Many of the leading companies are working with the above two inputs and as expected beating those who are still living in the past. The leading practitioners of this new science not only know which half of the advertising budget is wasted, but they also know how to derive the maximum impact from all the other activities, pricing and promotions. They are able to achieve this by collecting and using the important data from the many sources available to them.

Are processes on marketing effectiveness very difficult and only for a few companies at the top?

Any new practice starts with a few companies and if successful, others have to adapt or be condemned to mediocrity. As marketing becomes the one last differentiator to succeed and with its importance growing over time, Indian companies will need to adapt themselves to a new discipline. The fruits are not “low hanging” but with a little effort and process, rapid strides can be made. This is all the more important for the Indian brands as MNC brands are already using technology, data, research and analytics to create an advantage for themselves.

What is it that is required to be done to progress on this issue?

• The top management including the heads of functions such as marketing, sales, IT and Finance will have to come together to create a strategy for this. The progress on marketing effectiveness will need to be tracked on a regular basis as cost or sales or any other key project is tracked.
• The strategy will need to define in what way predictive modeling and data can be used to improve the top line, bottom line or both
• Analytics ability will need to be created in the company to get on the virtuous cycle. Marketing effectiveness is not a one time activity and over time, a team that focuses on this will be the essential. The other teams will also need a change in orientation, as data driven decision making takes centre stage.
• Specific budgets need to be allocated. It is however not necessary to break the bank, as value sits not in the software being used, but in the process/knowledge that can be created internally or with a little help at the beginning.

Now for the good stuff. Indian companies can pole-vault most of the hurdles as they have some inherent advantages

• Indian companies are pretty IT savvy – we simply need to direct that ability better through a strategy.
• We do not have to re-invent the wheel – we can take just a few years to come up to the level of western companies ( who have taken over 30 years to reach there) and then take it from there.
• India is seeing a mushrooming of small analytic firms, all of whom presently service the western market. Their expertise can be sourced quite easily and cost effectively.
• The ROI on this is high given that much wastage can be avoided.

Wednesday, April 22, 2009

The drive through UP

We are adventurous folks - self and better half. We like nothing better than to jump into the car early morning and drive off through the country( I tried this in US as well without the wife, but that's another story) with the kids loaded in the car with a great deal of required and possibly required stuff. The kids have also grown used to them though my daughter throws up often( possibly at the idea of it all) and I think that they even miss the rides, once in a while. Once a decade ago - missing close by places to drive from Hyderabad - we set out for Goa and through back roads and non roads reached Goa in about 2 days - all this when the kids were 5 and 1 respectively. Now you get the idea when I say adventurous.

Anyway coming to our recent trip to the Delhi and driveable places. Borrowed my brother's car from Delhi and started with the morning sun - towards Corbett. The road was as described by tourist brochures as "dual carriageway" - except they forgot to mention that locals use it as two roads that happen to run parallel. Very good to keep awake at the wheel and also enjoy the eternal delight of Indian highways - you never know what is coming around the bend!! Imagine how much the developed country guys miss - the lack of pure excitement and adrenaline, for which them need to pay to drive on a race track!!

Actually this part of the trip ie to Corbett had pretty good roads ( for UP, that is) as we were to discuss in a few days. Now I noticed a curiuos phenomenon - every second car overtaking us was Brand New. I know this because the tape or lace( or gift wrapping)was still in place. As we noticed car after car with this tape in place - we started to wonder about the recession - could a reverse be happenning in UP and all the car companies were keeping this under wraps. As the day progressed - we saw some pretty beat up cars with the tape. Curious, I say.

Then we came across a car which clearly was on its last legs - still with shiny tape in place. Aha - It was clear than the people wanted to show that it was a new car. We even surmised that the service chaps probably included it as a free giveaway with the service. Maybe each service place had its own tape color and type - a sort of identity which says - I get my service at khokan & co!. Cool, uniquely UP!!

With the elections on and the caste equations top of mind and sociology churning at the back of the mind - I struck on the notion that the color of tape may indicate a particular caste. This we felt was a distinct possibility as it was impossible to fool anyone with some of the sorry cars with the tape, if they were trying to pass them off as new. Could Mayawati's gang have black tape as their gang color? Malayam's red?. I could imagine a non caste member putting in the wrong color and getting roundly thrashed for his efforts by irritated caste members. Much like some Patel blokes in Gujarat going around with mushtache and beating up any outsider having a similar facial hair. I wanted to interview a few car wallahs with tape but alas such activity would have been seen with a jaundiced eye by the family.

So the mystery remains and would like someone to throw some light on this. MN Srinivas - where are you?

Come back Blog!!

I am basically lazy - so two blogs separated by 2 years should not surprise anyone. Like all good writers I was waiting for some real inspiration to happen. Now for the update - it has been a roller coaster 2 years - spent mostly in setting up retail in the US, feeling good about it initially, then feeling horrified at the low retails and then trying to ride the storm with as much aplomb as one could muster. Can't complain - it has been an interesting time.

One of the upshots has been that I been moved from Asia Pacific to US and other new (for us) new markets - but it has been a neat trick - the rabbit dissappeared instead of appearing!!. Now I know what it feels to be on the bench - a great time for writing "creative" blogs.

I am also proud on timing the annual vacation perfectly - we went to North India and showed the kids - the unmissable tombs that abound there as well as Corbett and Bharatpur, it was a great way to use time at hand. The visit to the cities were also memorable as "on work' visits never really give one the time to actually experience them as a tourist would.

Pics on the trip and some gyan in the next blogs

Monday, August 20, 2007

Plane to Pakistan

The PIA flight that we took from Bombay to Karachi was the first taste of Pakistan and its duality. Pakistan is a place where the modern and the traditional operate individually and together at the same time. The flight started with a prayer to Allah and was followed with the articulate captain giving a lowdown on the flight in perfect brit accent. This is a recurring theme – there is a much clearer Pakistan A and a Pakistan B than in India and this is apparent and represented typically by an young westernized MBA (typically eating in McDonald’s) and the Lal Masjid students with their kurta shalwar and white skull caps or by a slick TV Anchor interviewing a Mullah each with a point of view that they cannot reconcile. The difference from India is that this conversation is excessively polite with language dripping with ‘Takaluf”. Incidentally PIA beats Air India hands down – I guess much like an India Pak hockey match.

Karachi is a cross between Bombay and Hyderabad. The people that one meets on the job are typically Mumbai – business and time focused. Given the traffic jams (a bigger nightmare than Bangalore), I guess they need to be really efficient with there working hours, so that they can fight their way back home. The traffic scene was especially pathetic because Karachi got exceptionally high amount of rain (it is located in a very dry part) and some of the poshest localities were under a few feet of water ( see pic) – we had a Toyota that doubled up pretty well as a motor boat. The people (esp. our partners) were exceptionally hospitable (this is the Hyderabadi part) and the dinner at a Barbeque place was quite amazing. We ordered lamb ribs among other things and huge portion arrived. We dug into it and within minutes it had disappeared. Simply the best barbeque dish I have ever had. By the way, we are required to report to a Police Station within 24 hours of arrival, but thanks to our influential partners, we escaped the trip. Not only did they register us they also got us permission to go to Lahore. In Lahore, we had to report within 24 hours on arrival, which we did. I would like to report here that the innards of a police station in both countries are exactly the same.

Lahore is a place worth visiting. The roads are excellent; the builings are a Victorian, Islamic mix and have real charm. The best part of the city is the way these buildings are maintained and lit up in the night. The lighting is subtle, with highlights that bring out the beauty of their architecture. The best photo from my collection is that of the Badshah Mosque at about 10 pm at night from a quaint eatery called Coco’s Café . The view was magnificent and the Mosque is impressive and very well maintained. This was constructed by (who else) Shah Jahan and about 60,000 people can pray at a time. The Café is bang in the middle of Heera Mandi, the red light district well known enough to partly define Lahore. While the food was good, especially the karela with the lamb, it did not quite approach the Karachi Barbeque. Coco’s Café hit the Time Magazine in 2006 as the most interesting restaurant in a red light district as it also doubles up as the studio of a Pakistani Hussain who specializes in painting the denizens of Heera Mandi. I bought a signed print as a keepsake and as encouragement to Hussain Mia.

On the business end of the trip, a few questions needed to be answered at a broader level. Is the consumer boom similar to India? How is the politics of extremism impacting the common middle class folk? How will the consumers react to a brand that is Indian and seen as such? What is the impact of marketing vehicles?

Pakistan has been growing in the 5-6% range for the last 3 to 4 years and it is showing in a retail boom and success of new concepts and international brands taking root. In all the modern parts of town – McDonalds, KFC and Pizza Hut are prominent, much more so than in India. Toyota and Honda are the best selling upper segment cars but the best selling car is a 800 cc Maruti like Suzuki (called Mehran there, I think) and this is as should be given the very India like growth in the middle classes (though much lower than in India as a proportion, I suspect.). The 2-wheeler population is also decently high with Honda at the upper end and many, many Chinese brands at the lower end. The consumer seems upbeat despite all the political uncertainties and it shows in crowded restaurants and market areas. The Malling has just started – with quite a few “tourists” in the 2 malls we visited in Karachi. The shops were empty but the escalators were well used. The youthful exuberance of Karachi is also obvious, and it was amply demonstrated as we landed in Pakistan on the 14th of August. There were crowds of motorcyclists zooming around with the flag painted on their faces and waving the green crescent. Read in the papers that in Karachi alone, 5 youth died in different motorcycles accidents attempting the “wheelie” and other tricks (and this is without any booze being available!). The edit in the newspaper blamed this on the very little diversion or time pass stuff being available to the youth. It did remind me of my youth in Hyderabad, which was quite similar. While the Indian youth seems to have countless number of things to do, Pakistani youth could still about 10 or 20 years behind. This is probably reflected in all aspects of the market, be it retail or advertising.

On the political part one does get the feeling that the two Pakistan’s are still at loggerheads and the Pakistan A has not won through and there is real danger of the mullahs getting increased control. Benazir’s statement that Pakistan can go the Iran way is not really an overstatement. The consumerisation is not going to ease matters and one hopes that real growth in the economy will create a middle class capable of binding the two ends. The media is less controlled than I expected and this is apparent with the newspapers like Dawn, who routinely dissect Musharraf and his doings. They also frankly look at Pakistan’s reality and perception that the country is a bit of a satellite state. It irks and one person also described themselves as still ‘slaves’. That comment is probably a bit over the top, but the fact that it rankles is apparent. In their perception of India – they see it as a giant, who is ahead right now with major industries and prestige, but in my perception do not suffer from a feeling of inferiority, they are just stating facts as they see it. They strike me as straight speaking lot – with a yen for good things in life. Guess it is the Punjabi influence that brings in this vim and vigor. The other striking thing that I noticed is the influence and accomplishments of the girls. Not only are they beating the boys in academics as they are in India but are dominating advertising and marketing roles in key companies and the boys are trying hard to catch up. And yes, the modern lot is into Levis and you can see some smoking in hotels and the like places. I have seen a lot more burquas in Hyderabad than I saw in Pakistan, probably because we did not tour the older parts of the cities

Now to the issue of Indian companies and brands getting in there as they were readying themselves a couple of years ago. How will they be received? Will there be resistance just because they come from India?

This question is a bit more difficult to address. The only major success of an Indian product is that of Bollywood and of soap channels like Star Plus. The films and the actors are amazingly popular – in a poll conducted Shah Rukh Khan was more popular in Pakistan than he was in India. The awareness of Indian products is also likely to be quite high – demonstrated by the hotel clerk who asked me if I was from the watch company. He knew who the brand ambassadors were etc. While these are extremely popular – they are also not officially recognized. Only one theatre was running a joint India Pak production and doing very well. With suitable products for Pakistan, high initial awareness and similar modes of doing business, Indian brands will probably do well as long as they project themselves not as Indian, but as global brands that happen to have originated in India. It is unlikely that the negative feeling will rub off on brands but in an extreme situations, there could be fallouts for the brands. On the other hand if trade does start off and the visa restrictions are eased – the extreme situation may never actually occur and it can be a truly win win situation. With that happy thought – let me signoff the Pakistani way – “ Allah Hafiz”

Thursday, July 26, 2007

Shaadi Barbaadi

The branding in the movie Metro was pretty good – ensuring almost all brand messages come through. To start with the boy ( ok ok, man) and girl talking about the number of options each have evaluated to date ( presumably thru It is 12 in her case and 28! in his. For the spouse starved boys and girls – the message is clear, internet’s the way out. The girl initially rejects the guy as she sees him as boorish – but later when he is about to get married to a girl chosen by his mother ( the "other route") – she comes back into the picture and wins over the traditional matchmaking system. The message, it is a lot more exciting way to find a mate. He is always propounding the values of an arranged marriage – something I guess is all about. I guess,in-film branding is really coming of age. I am sure the director or the screenplay guy has a connection with advertising.

The branding part apart, the movie is just not quite there. Too many stories all running concurrently, but nothing dramatic to say in each one. ‘Less is more’ message seems to have been missed by the filmmakers. The net result are shallow tales that don’t really convince and somehow ring false.

Monday, July 23, 2007

Kathmandu Post

This is the first of hopefully many postings. Always wanted to write my impressions - a combination of travelogue and the study of local consumers and consumption quirks. Never got the chance to actually write an article and try and get it published. Guess it was too much trouble - till blog spot came along. I guess I am late even in the blogging revolution but then I was never known for being an eager techno type...

My job allows me wide travel ( all of SAARC, SE Asia, US) and my trade has forced me to look at markets and customers from an insiders point of view. So hopefully these pieces will not be infernally boring, but we will only know as we go along. The best reason why this experiment has a chance is that long waits in airports are part of the territory and blogs from my point of view are a real "time pass palli batana".

Last week I was in Kathmandu for the first time - and having read a lot about the city from some mountaineering books, I was rather keen on seeing what the city is all about. The mystique of sherpas, gorkhas and of princes bent on patricide ( not to mention the other cides, alongside) did give the city a certain character. Generally, I was not disappointed - the people are generally very straightforward and friendly (Typical mountain folk), Kathmandu has some great places to eat and drink, and there are streets and streets of "tourist" shopping places selling all kinds of ethnic stuff including a well done shop selling only pretty wicked looking Khukris. I guess one can spend days wandering those streets buying Nepali Ganesha heads to Kamasutra Buddha( pretty remarkable invention of the Nepali mind).

On the natural beauty side - I was not able to view a single mountain for the good reason that Kathmandu is in a valley bereft of major mountains - and since it is the monsoons - even the effort of going to a viewing point would have been futile. Need to save something for other business visits, right?

Coming to my impressions on the customers - there are somethings common to all customers from Bangladesh to Birmingham - a yen for cellphones, a fascination for cars (esp SUV's), etc - but what stuck out in my mind was that the Nepalis were pretty well dressed and fashion conscious. Whether it is the impact of the foreign tourist of the adventurous variety, the market has a lot of boots, sunglasses, impressive looking compassed - and the locals seem to have taken to them as well. My overall impression is that while the off takes are nothing to write home about right now - the customers in this market will spend if they have the money. This is where the really good news comes in for Nepal. The single largest export is people and this has grown in its contribution. While it was the army earlier - now the Nepali is willing to work in many parts of the world and send the moolah home. The second positive thing is that the polity may settle down after the upheaval of the past few years, with the Maoists joining the mainstream. All this can mean that Nepal will scale new peaks in the years ahead.

Guess it is well worth investing a few days a year to push things along!