The buzz is that marketers will divert a large part of their budget to digital. Campaign India investigates...
While the advertising and marketing industry has gradually started feeling the brunt of the economic downturn, there is one industry which is quite upbeat about its future: digital. The general opinion is that the marketers will soon rework their marketing budgets and a better percentage will be allocated to digital.
“One of our larger clients told us that they were shutting down all their television advertising, cancelling all their print advertising, and could we increase the digital performance spends? This was a travel client, hit by not just the state of the market but also the cost of aviation fuel and the drop in spending power by many travellers,” reveals Mahesh Murthy, founder, Pinstorm.
Murthy predicts that digital will grow in a year by more than 50% - “a year when other budgets will actually shrink”.
Preeti Desai, vice president, marketing and strategic alliances, rediff.com echoes the same sentiments as “the Internet has been accessible from SEC A, B, C, D from Tier 2 and Tier 3 towns and cities for some time now and this has helped us reach the critical mass of the English speaking audience.”
The digital agencies are surely feeling positive, but do the marketers see digital becoming so important a medium in the near future?
Says Sonalee Panda, head of products and marketing, ING Vysya Bank, “The allocation to digital marketing could probably go up because digital is there at the right time and the right place. Also, there is lesser wastage in digital. But am I going to drastically increase my digital budget by 100% or something? No. The reach that you get is limited and most of our products are mass brands.”
Harit Nagpal, director-marketing and new business, Vodafone questions the entire presumption that traditional media will be trimmed. “Those who have been using traditional media will continue to do so even more because now it will help them boost revenue,” he says. Thus, according to him, there will not be a drop in traditional media by the clients who use it to increase their toplines.
However, most people see a bright future for digital with or without the economic downturn. Says Jasmin Sohrabji, managing director, OMD, “An economic downturn notwithstanding, a medium’s potential to draw interest and ad revenues is determined by its performance against a target consumer. I believe the time for digital is here to stay, despite market and environment concerns. Having said that, the medium for some is still in experimentation/adhoc mode, and those budgets may get reviewed more strongly as and when overall advertising spends get reviewed.”
Nagpal feels the same way. He says, “Digital media was always on the rise and will continue to be on the rise. It has got nothing to do with the short or long term recession.”
Jasmin Sohrabji, managing director, OMD
The time for digital is here to stay, despite market and environment concerns. However, the medium for some is still in experimentation/adhoc mode. When we review our media spends, we do not retain/drop mediums on basis of their convention or emerging status. We re-look our objectives and review what touch-points best fit the revisited needs. Mediums that have a clear and demonstrable ROI will find their place in the plan to be more secure in downturns. Digital will get its due budget, but the implementation and execution of this budget will come under the scanner…standard assets and formats will find little place in the plan.
Mahesh Murthy, founder, Pinstorm
In these times when we hear that traditional ad budgets are down by 35% for the second half of the year, it’s not a time to gloat. But, in an odd and ironic circumstance, we’ve never been busier. Marketers in core sectors like financial services, consumer electronics, travel and education have realised that the Internet is a smarter way to reach audience than other media – because few people buy anything here without going online. Research shows that the target group of young, urban affluent spenders spend their maximum time online and on mobile. And agencies like ours offer a virtually foolproof business model to invest monies behind pay-for-performance.
Harit Nagpal, director-marketing and new business, Vodafone
Digital media was always on the rise and will continue to be on the rise. It has got nothing to do with the short or long term recession.
I don’t think there will be trimming of traditional media because of the downturn. Those who have been using traditional media will continue to do so even more because it will help them boost revenue. So, I don’t see any drop in traditional advertising for clients who are doing it to increase turnovers. Digital forms such a small portion of the ad spends that even it grows by 100% or 200%, it is still going to be a very small proportion of the spend. It is going to grow only on its own merit and not on the total budgets being shrunk or increased.
Preeti Desai, VP-marketing and strategic alliances, rediff.com India
The answer is an emphatic yes with a difference in perspectives and acceptance levels. Consumers of various mediums use those mediums from “need and ease of access” perspective. The Internet has been accessible from SEC A, B, C, D from Tier 2 and 3 cities for some time now. More advertisers should recognize the reach and frequency of digital. Marketers who have engaged with audiences online have seen the results and have upped their budgets. Also, the advertisers are vary in accepting factors like social communities which deliver consumer insight and turn consumers into evangelists and brand loyalists.
Sonalee Panda, head of products and marketing, ING Vysya Bank
As a trend, allocation to digital marketing could probably go up because digital is there at the right time and the right place.
But am I going to drastically increase it by 100% or something? No. The reach that you get is limited and most of our products are mass brands. Digital can be used for something like ING’s Formula One savings account which is targeted at 25-28 male in metros who are F1 fans. For that I might only use digital and not mass media. But for my Orange account which provides customers easy access to their money, I would look at mass media.