“Indian marketers are looking west when they should in fact be looking east. What fascinates me is that India has the biggest pool of technologically advanced talent and yet there is a lack of innovation when it comes to home grown Indian solutions and products that are dominating on a global scale.
The talent is there. The market is rising quickly in many areas, but we don’t see an Alibaba equivalent out of India,” says Dr Michael Karg, CEO International, Razorfish on India’s need to stop emulating the west. Dr. Karg also talks about the end of the interruption based model in advertising. Excerpts from an interview:
You strongly believe the interruption based model of advertising` is going to die, what is the model you recommend?
If you think about TV advertising, radio, outdoor, newspaper, print, you’re trying to do something and someone or something interrupts you via advertising.
At the other end is the model based on service and utilities which is a very different approach to advertising in which the goal as a brand or agency is to help consumers overcome all the friction points on the journey and do whatever it takes to deliver valuable services and solutions.
I always say that fundamentally, the value of social media is misunderstood by most marketers because to really understand it, we need to go back to basic human behaviour. If you look across every single market, the most important influencing and purchasing decisions are based on friends and family. Mass media and advertising over the time period of the past 80 years is a distortion of how people have been trading for thousands of years.
Before people could read or write; before there was mass media, it was all purely based on word of mouth recommendations. Now what social media is doing is allowing you to get a scale of what friends are recommending for you to buy.
That is what is misunderstood by social media agencies and most of the platforms... Facebook still doesn’t get it either. It is not about interrupting new experiences when you’re on a social network, it’s about utilities and services which friends and people in the same social community recommend.
How does India need to upscale its digital model?
The Indian market is very interesting, but it is lagging behind other markets. I’m convinced that the most advanced market from the services and utilities sector is China. I think the Euro market is also more advanced in how brands engage the market.
What I have noticed about the India market is that historically it has always looked to the West and US to develop similar services. It is missing a big trick by not developing its own Indian way of engaging the consumer. It is very different from China for example, where the platforms are completely unique from those of the western world and are tailor made to the needs of the local consumers.
Indian marketers are looking west when they should in fact be looking east. What fascinates me is that India has the biggest pool of technologically advanced talent and yet there is a lack of innovation when it comes to home grown Indian solutions and products that are dominating on a global scale.
The talent is there. The market is rising quickly in many areas, but we don’t see an Alibaba equivalent out of India.
E-commerce players have been increasing their advertising spends significantly in India, specifically in the last two years, do you think they are here to stay for the long haul?
I think studying the advertising bottom lines is the wrong way to look at things. The numbers we should be looking at are those of investment that companies are willing to make on infrastructure.
We need to look at investments that are going into technology infrastructure that is happening in India. Those are the interesting numbers to keep an eye on and will predict mid to long term changes.
Marketing expenses and operational expenses are not the only numbers to be looking at when it comes to understanding the success of the digital sector.
You’ve had experience working with the Indian market. Has confidence increased in regards to working with the digital medium in the country?
The nature of conversations of clients has really changed. I think clients are getting more inspired looking at digital. In the beginning, it was ‘let’s do a bit of social media’, ’let’s do a bit of digital advertising’ and ‘let’s do what we are doing on other media, but in digital’. I think the conversation has progressed from that to ‘how can we get into e-commerce’, ‘how do we get into mobile -- not from a mobile marketing perspective but from the mobile utilities and services perspective’.
Another interesting question being asked is ‘how do we use social media listening to respond appropriately’.
India is still big on storytelling in advertising, even while digital is making a strong presence. How can marketers make the best of both?
A good story is always needed and goes back to the basics of human behaviour. Today, with technology, a good story can be better targeted. One can segment stories towards the right device and to the right customer.
Technology helps marketers decide the right time for people to consume the information. One can change a story to suit the device, from mobile to TV. The context is as important as the story.
There seems to be a gap when it comes to the understanding of technology and digital ideation between clients and agencies in India. How can this be addressed?
Lack of digital talent and lack of understanding of how to incorporate digital is not a problem only with India -- it’s a global problem. Big marketers, spend millions of USD on traditional marketing. Today they know they have to change to digital but most often they don’t know how much and at what pace to make the change. Internally, the structure of the organisational setup is not designed to optimise success in digital because while a chief marketing officer and a chief technology officer rely on each other, they might have different agendas based on their understanding of digital. Razorfish is trying to keep things active in our global setup by sending some our best talent to train our people at other Razorfish offices. We also encourage participating in industry events to increase awareness.
Today companies are opting for organizational consultancy. They come to us with questions like:
How does digital impact the way we go to market and do business? How does digital change our value impact? How do I change my organizational set up to work within digital?
We have seen big companies putting digital ventures on hold to answer these questions.