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B2Bento.tv is back after a hiatus. Anol recently sat down with Vikas Gulati from Vserv.mobi and Sanchit Sanga from Mindshare to discuss key issues and challenges facing the marketeer of today. Given the experience and wealth of knowledge they had to share, we are presenting excerpts from their chat in three parts.
The discussion begins around whether and why or why not there is a shift in budgets from traditional (print, TV, outdoor) to digital forms of marketing, what roles agencies could play in shepherding the shift, and driving towards more data-driven marketing models.
(VG: Vikas Gulati, SS: Sanchit Sanga)
VG: Hi, I’m Vikas and I lead Vserv.mobi. It’s a mobile ad network focused on emerging markets. We’ve got our proprietary technology in the form of an ad wrapper platform and we essentially focus solely on emerging markets. If you look at the emerging markets structure right now most of the devices being used out here are feature-phone driven. While the world is going gaga over smart phones, feature phones have close to about 70% -80% penetration in most of these markets. We’ve got a product that cuts across platforms, whether its feature phones or smart phones. That’s what we do. We enable advertising across platforms.
SS: Hi, my name is Sanchit and I work for Mindshare which is a GroupM-WPP company. I run a division which focuses on digital performance so I straddle all forms of mobile, social, search and display to deliver solutions to Fortune 500 companies, which we work for. In essence my business is primarily driven by data. Data tracked through search, social and other forms of media and using data to make informed decisions for marketers.
B2Bento: Let’s start from that. We’ve just learnt that one of our clients has just shifted a big budget from print to digital. There was always a war between traditional media and digital, where previously in the early 2000’s digital was the afterthought but things are changing now. What kind of budget shifts have you seen in the last 2-3 years in terms of traditional to digital media?
SS: In terms of shifting of budgets it’s still not very significant. Digital in Singapore is way ahead of the region; it’s touching something like 10-15% of overall marketing spend, which is certainly not justified if you look at the time spent on digital platforms versus traditional platforms. It’s not commensurate. So there is a massive gap in which it should reach somewhere in the vicinity of 35-40% to make it credible and get the interest of marketeers in a serious manner. So there is a bit of inertia from the marketeers’ side as most people who you work with, who are brand custodians, are still living in the old world and it’s just because of the way they’ve been taught to use marketing. Unfortunately the education of new media hasn’t percolated across colleges and institutions. So all their knowledge is based on latent ways of teaching media and marketing . Unfortunately that’s a barrier and a challenge in itself which people like me and Vikas are trying to overcome. Probably that’s the reason why things haven’t moved at the pace it has in the US and UK, where the consumers are the same, but the marketing bottleneck is more here than in the West.
Inertia from marketeers and brand custodians, coupled with education in new media not percolating across colleges and institutions, are leading to bottlenecks in the shift to digital.
B2Bento: So Vikas, what do you think is the problem, the main reason for this? 10-15% is a shame isn’t it?
VG: No doubt about it. Having said that, I think fundamentally there is a shift that’s happened in the last few years. I think we’ve come a long way. I joined vserv about 5 months back but I’ve been in the online space for a long time now. I was running an online ad network before this too. From my experience back in 2006/2007, it was a really hard sell. If you look back then Internet penetration used to vary between 25-30%+ but consumers were going online in a very big way and there was hardly 1% spending that was going on. In the last 12-18 months the shift has been dramatic both from online and mobile standpoint. A whole lot of clients, categories and verticals are opening up. Earlier it used to be pragmatic, driven by technology companies. Today the techs are still there, obviously techs still invest a fairly large chunk, but you’ve got categories like retail, FMCG, etc. I managed Procter & Gamble for 4-5 years and there online used to be taboo. I can tell you that to get a brand manager to allocate 1%, to try a campaign worth $5000, you would need to make 50 presentations. I exaggerate of course but it was at least 20, and they’ll say good and let’s look at it and then we’ll get forwarded to the next year.
B2Bento: Coming from that point, what’s the agency’s role? You’ve mentioned the need for education, informing people. However in many ways the agencies themselves are holding back. The people involved haven’t changed. The same people are still there. Mindshare is doing something and I’ll come to database marketing but apart from that what is your viewpoint on agencies? What is their role now and what should it be?
SS: I agree with you. A big barrier coming into this space is the way agencies function. If you look at any of the large players in this segment they have not woken up to the reality of today specifically in the creative side, where they are still living in the “30-seconds” world and that has completely changed. Unless they work hand in hand with the media agencies, unfortunately, the ball will not move at the pace we expect it to. We at Mindshare and other agencies in the media space are making inroads in informing and educating our brands but it’s not significant enough to move that 10% to 40%. It’s an entire ecosystem which needs to wake up to the reality and it’s an ecosystem that includes the marketeer, the media agency and the creative agency. Unfortunately from our experience, even our cousins in WPP are not moving or educating themselves enough to the reality of today’s world. I would say it’s a barrier right now. Our internal barriers are more significant than the external barriers but we are trying to make a change. We are trying to work with them. We do a lot of workshops with our creative partners. We do a lot of workshops with our brands. We do a lot of internal workshops with our media planners on whats changed and how they need to adapt to this world.
VG: But agencies are supposed to be enablers and that’s what they’ve done to the rest. If you look at how TV and print advertising have grown, they have been enablers. I think they probably have to take that same space here (in digital) as well. Without that a marketer will never be able to get everything together on a single platform.
Agencies are supposed to be enablers
B2Bento: That’s true but at the same time if you look at it from the media planning point of view, in a place like Singapore, to be effective all you need is to have 3-4 cards in your rolodex and you’re done. Now things have suddenly gotten complex and it’s a lot to take in. We can’t blame our own brothers. It’s a big thing. But one thing I’m interested in is database marketing which Sanchit is in-charge of. We constantly are pushing this based on data. Another huge perennial problem with marketing is that its gut-based. The art of marketing is never the science of marketing. How do you educate someone and make them understand and accept that marketing is more than just about the gut feel?
SS: Right. So this is a topic which is of big interest to me so I’ll tell you about my experience. Every time I’ve spoken about bringing logic into the marketing mix usually you see a lot of people interested. Purely because that logic never existed in television and print. It was as you said it was gut feel, it was partnerships, it was relationships. It was their understanding of the consumer which was at times hypothetical. It was not true. Now what digital is suddenly doing is every consumer is expressing intent of some kind. Be it on search, social, be it the way they behave with their mobile — they are expressing intent with regards to a brand, with regards to a category, which is intelligence that never existed. So you can predict the behavior of consumers based on what they are saying, what they are looking for, what they are talking about, and how they are using specific media types to look for that information or absorb that information. They are leaving these data trickles behind. If you consolidate them well in a certain manner you have an understanding of the consumer which never existed. You can predict when a certain individual is planning to buy a certain product, you can predict how they are comparing the product, you can look at how they view the category. You are getting far more deeper insight into the consumer than ever with television and print, which was one way. Here digital is enabling data trickles to make sense out of the consumer and segments and how to market to them, what their needs are, and what their wants are. It’s a whole new world which is exciting the marketers in a big way.
If you consolidate the “data trickles” of intent, preference and media that consumers leave behind, you have an understanding of the consumer which never existed.
The trouble is the data is enormous. Every moment, every second you are getting trillion of bytes of data which are getting aggregated. How you manage that is a big complex set-up. Clearly there are tech companies foraying into this if you look at the way Adobe and Microsoft are functioning. They are planning to get into the data consolidation phase. We as agencies don’t have expertise in tech but we have understanding of the marketing ecosystem. We are trying to leverage and partner with certain people who are collecting that data in a sensible manner and help mine them to make marketing decisions. It’s a whole new world which is emerging where the boundaries between agencies and tech companies are going away, fading away completely. Let’s see how that pans out. The way it’s currently structured it looks like this is the new version of marketing where data will power creative, product development and marketing strategies. Having said that there is a massive role for creative. They say 90% of consumer decisions are magic and not logic, so only 10% of the decisions can be taken on logic, which is the data. So let’s not undermine the role of creative in the mix which is the 90%.
Look out for Part 2 next week! Chime in below with your comments.