A Rs 225 cr marketing budget is a good problem to have: Sandeep Aggarwal, Founder & CEO, Droom

A Rs 225 cr marketing budget is a good problem to have: Sandeep Aggarwal, Founder & CEO, Droom

Author | Venkata Susmita Biswas | Wednesday, Jul 05,2017 8:16 AM

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A Rs 225 cr marketing budget is a good problem to have: Sandeep Aggarwal, Founder & CEO, Droom

Automobile transactional marketplace Droom is eyeing Rs. 8,000 crore GMV (Gross Merchandise Volume) as it steps up its marketing game. The e-commerce startup has announced that it has set aside Rs 225 crore for marketing campaigns for the period of July 2017 to June 2018.

Spending upwards to Rs. 200 crore on advertising and marketing puts Droom in the league of companies like Nestle India, Vodafone Essar and TVS Motors. The second biggest advertiser in India, ecommerce portal Amazon, spent around Rs. 800-1,000 crore on advertising in 2016, according to the Pitch Madison Report 2017.

In the words of Sandeep Aggarwal, founder and CEO, Droom, the theme of the current campaign is: ‘Do not expect the seller to tell you things you want to know as a buyer, Droom will tell you.’

While the campaign kicks off with three TVCs, Aggarwal said that one month into the campaign, Droom will be rapping about purchasing pre-owned vehicles. The TVCs will be aired across the top 25 towns and cities in India. Of the TV channels, Droom has allocated 25-30 per cent budget for English channels alone.

Commenting on the colossal marketing budget of Rs 225 crore, Aggarwal said, “Although the absolute number is huge, honestly it is a good problem to have. Our marketing budget is a very small percentage of our projected growth revenue. When we spent Rs 100 crore on marketing last year, that was a big number. But in the meantime, our annualised GMV has also increased.”

Droom currently has an annualised GMV of Rs. 3,300 crore and Aggarwal expects it to touch Rs. 8,000 crore by June 2018. Aggarwal claimed that Droom has become the market leader in the space of online automobile transactional marketplace capturing 65% of the market share. “Our current campaign is aimed at retaining our number one spot,” he said.

Of the Rs. 225 crore, Droom has assigned Rs. 100 crore for TVCs alone. In comparison, Droom set aside only Rs. 25 crore for TV, outdoor, print, and radio advertising and other ATL activities in its last marketing exercise. But for big spenders like Amazon and MakeMyTrip, e-commerce platforms tend to have more conservative marketing budgets. This heavy spending on marketing, especially TV, is to build trust, said Aggarwal.

“Most of the users we are targeting are already online and we are reaching out to them through popular digital media channels. Automobiles are a big-ticket item and therefore there is a need to use mass media which commands higher trust than online media,” he said. He added that when consumers see an outdoor ad or a huge print ad, that’s when they identify a brand as an institution in the making.

He said that if his team comes across a big-ticket event with a high ROI and the necessary stars align, Droom will look at associations with events such as the IPL.

Droom’s first round of brand building exercise, launched in September 2016, was directed towards enhancing the sense of pride amongst Indian consumers with regard to purchasing a pre-owned vehicle. Droom took on an aggressive performance-linked marketing approach in 2016. This year the focus is on increasing the adoption of Droom’s ecosystem services.

“We have come a long way from there in terms of our size and the tools, technology and innovation that we have brought to the platform. This time, the emphasis is on our ecosystem’s services tools,” said Aggarwal. This year, Droom plans to introduce its Eco, OBV (Orange Book Value) and History tools that assist users in evaluating the condition, history, and cost of pre-owned vehicles.

The campaign has been conceptualised by Contract.

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