Invest more in digital or lose a thousand billion in opportunity costs: Vikram Sakhuja

Invest more in digital or lose a thousand billion in opportunity costs: Vikram Sakhuja

Author | Abhinn Shreshtha | Wednesday, Oct 01,2014 8:15 AM

Invest more in digital or lose a thousand billion in opportunity costs: Vikram Sakhuja

"We have been talking digital for a long time but clearly we have not done enough," said Vikram Sakhuja, Global CEO of Maxus. Sakhuja was speaking at the exchange4media conclave held at the Trident, Mumbai on September 30, 2014. He was part of a panel discussion titled ‘Only Digital Matter Or It Doesn't’, which also included Karthi Marshan, Head (Marketing) of Kotak Mahindra Group, Sagnik Ghosh, VP & Head (Marketing) at Axis Bank and was moderated by Noor Fatima Warsia, Group Editor (APAC) of Digital Market Asia.

Sakhuja further opined Indian companies would lose nearly Rs 50,000 to 1,00,000 crore in topline sales over the next few years in terms of opportunity cost by continuing their current attitude towards digital marketing. He asked the assembled audience comprising of marketers and agencies to question why certain sectors were spending less on digital advertising and whether, as a country, we should be happy with just 8 per cent of our total ad ex going towards digital advertising.

"Everyone is talking about digital but in silos, but the consumer does not live in a silo. We are in a situation where we are just dipping our toes," he said. "The world is not linear but increasingly interconnected." He advised marketers to change their KPIs to be more relevant with, and understand, the visibility of the brand in the digital medium, whether technology was being leveraged to upsell and how effectively is digital being used to map each stage of the customer journey.

Giving his thoughts on one of the most pertinent issues right now—whether TV and digital advertising can co-exist, Sakhuja said it is not an either/or situation. "We should be looking at registrations and sign-ups. Use CRM data but move beyond just thinking about everything as just advertising," he said. He gave the example of a recent campaign by Chipotle, "The Scarecrow", as an example of how brands could use the digital and social medium to create campaigns that were not the standard, run-of-the-mill advertisements.

But where Sakhuja asked marketers to be more receptive in terms of spending towards digital marketing, the other panel members felt that constant changes and new terminologies and opinions were just making the whole ecosystem even more confused. Perhaps echoing the thoughts of other marketers, Marshan opined, "When 60-65 per cent ads done by e-commerce players are on TV then why are we questioned?" His point was that perhaps the constant talks of spending more on digital were not really taking into account whether it made business sense. "At the end of the day, the only thing we are asked is how much business did we get," he further added.

Sakhuja countered this by reiterating that both offline and online can co-exist. "It is a case of incremental reach. I am not saying that move from 8 per cent (ad spend on digital) to 100 per cent but move from 8 per cent to 25-30 per cent," he said.

But Ghosh was of the opinion that a marketer could not deliver on the KPIs since digital agencies are not coming out with ideas that advertisers can use. Marshan agreed with this and pointed out another issue, mainly the constant changes in metrics and best practices. "The KPI goalpost keeps moving. We were earlier taught by you guys (agencies) about GRP; it then moved to Likes and Engagements and you are now talking about co-creating digital experiences. We keep getting pushed from one thing to the other," he said.

Sakhuja replied it was also a question of which metric the marketer thought was most relevant. "What do you want? This is my question to marketers," he said.

A reason for this disconnect between expectations and delivery, opined the panelists could be the lack of talent among digital agencies. For example, Ghosh said, "There is a huge gap in the talent requirement and an imbalance in the whole structure. There is high attrition in digital agencies. The talent is not sticking around even at your end. You have to understand the problem."

Coming back to the point of non-digital companies moving to the space, Ghosh also opined that it is easier for the companies that are already in the online space. "For a Flipkart, it is easier to set up their systems, since they have been in the space for years. We don't come from that background. For all we know, our data might be corrupted and we might not be able to use it as effectively," he suggested.

It was interesting to see a panel discussion with an agency and two marketers since it highlighted the number of areas where both agency and advertiser still need to improve on their relationship. Though most in the audience and across the business fraternity have no doubt on the importance of the digital medium, Sakhuja's point about rethinking the approach and being braver in terms of investments are food for thought for many. At the same time, the other panel members also made valid points about the talent crunch and the constantly changing terminologies. A closer working relation between the two might perhaps help answer most of these questions.

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