Is pay-for-performance advertising really the silver bullet?

Is pay-for-performance advertising really the silver bullet?

Author | Anjali Soni | Friday, Feb 27,2009 7:48 AM

Is pay-for-performance advertising really the silver bullet?

Ad budget cuts, re-negotiated agreements, immense pressure to deliver have become part of the slowdown era economy. Countering such elementary tribulations during slowdown, Lintas Media Group and Pinstorm along with IAMAI hosted a closed-door roundtable on ‘Marketing through the Recession: Is Pay-for-Performance advertising the silver bullet?’ on February 25, 2009 in the Capital.

This open-format discussion was led by prominent speakers like Lynn de Souza, Chairperson, Lintas Media Group; Hitesh Oberoi, Director & COO, Info Edge (India) Ltd; Santosh Nair, Senior Vice President, NIIT Ltd; Parminder Singh, Business Head, Google India; and Vineet Taneja, Head - Marketing, Nokia. The discussion was moderated by Mahesh Murthy of Pinstorm.

A mood versus a reality situation

Speaking about the slowdown, Lynn de Souza commented, “We will be having GoaFest very soon, and I truly believe that the theme of this festival is concisely titled – ‘Don’t waste a good recession!’ There seems to be a mood versus a reality situation and we need to think about ways to combat, what we believe is recession rather than sitting back.”

She further stressed that it was not just the digital medium that one needed to look at seriously, but it more in the area of its performance. “You have to focus on what you are delivering, challenge your current concepts of performance and only then can we debate on improving performance measures,” de Souza pointed out.

More stress on online search

Google’s Parminder Singh observed, “Today, advertisers have started realising that the Internet is a multi-layered advertising and marketing medium, where one can experiment and mould the medium as one requires. Different companies are exploring the medium in different ways and the entire gamut of user experience, starting with lead generation, goes all the way to branding. This will continue in the future, though there is fear of meltdown because the fact remains that the Internet is used by most consumers to do significant research. Consumers are not buying less, but they are doing more research before buying and, therefore, there is usage of search engines like Google.”

Singh further said, “In the last month, we saw 9 million searches just related to mobile phones and 6.5 lakh searches for DVD players. As there is optimum utilisation of the medium, it proves advantageous to advertisers and marketers.”

Vineet Taneja of Nokia commented, “I think people search online, however, conversion to final purchase is offline. The theme that I am referring to is conversion at every stage of the market process. If we look at the first level of conversion, it is awareness to persuasion. At the second level, people go online, speak to their friends. In our category, people are experts, and word of mouth really counts, and this is the next stage of conversion.”

“We believe in exploiting our own medium and making sure our medium delivers those conversions,” he added.

Television and online mediums

NIIT’s Santosh Nair suggested that any campaign that worked in the moment and not in the future must use the information quickly and turn it around into results. “The shorter the gap between the advertisement, conversion and sales process, and faster the turnaround, the better it will be.”

Info Edge’s Hitesh Oberoi pointed out, “On one side where television advertising brings visibility and credibility, the online medium is good for lead generation, transaction and inquiry. Online is definitely not the best medium for building brands.”

“I strongly believe that the effects of television last longer than offline. Despite all marketing options available on the internet, it is still not very local. It is not possible to advertise online if you want to limit campaign to one city or state and, therefore, we advertise on television,” Oberoi said.

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