“ 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.

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