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Measuring returns: Companies log on to performance marketing

24-May-2004
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Measuring returns: Companies log on to performance marketing

The concept of ‘performance marketing’ (PM) is gaining momentum in India. For, Indian companies are now implementing an effective process for measuring marketing ROI (Return On Investment). Gone are the days when detergent saleswomen were the ‘evangelists’ of PM—for they introduced a brand to the consumer, sold the product across the door and then got paid in return! But now the scene is quite different. Performance marketing is being positioned as the nirvana of marketing efforts since it is supposed to yield tangible results based on the investment expended. In essence, any kind of marketing whose effects are measurable, preferably in some quantitative way, can be seen as performance marketing.

Today, the Internet is considered the ideal medium for implementing an effective process for measuring marketing ROI, opine media analysts in Mumbai. In India, financial companies have taken up the Internet heavily to drive credit cards sales and home loans. Likewise, insurance companies and telecom majors are using the Net to measure the efficacy of their marketing plans.

Says Mumbai-based Internet analyst Probir Roy: “Today, new media vehicles like wireless and the Internet provide the ideal paradigm for this play to happen viz the generally precise and quantitative metrices used—i.t.o click-thrus, impressions, lead generation or buys effected on account of marketing campaigns.”

For instance, Cricinfo India has been able to use new media-live audio commentary to build paid-subscription and a successful online sub-brand ‘community’, according to Mr Roy. “That is how new media leverages and has a measurable ROI on its product development and marketing. Recent ‘Hutch java games’ (through above-the-line and wireless applications push) has led to clear translation into not only ‘awareness’ and overall ‘brand recall’ but also significantly new revenue streams for itself,” he adds.

On the traditional brick and mortar side, MasterCard India’s overall marketing-promotion campaign (above the line and below-the-line) led to triple digit growth in the number of transactions month on month in 2003. “Clearly, a good example of PM,” says Mr Roy.

In sync with the emerging marketing trend, brick and mortar company Bajaj Auto has opted for an experiential marketing technique to promote its brand Bajaj Caliber 125 and Wind 125. According to Bajaj Auto Ltd vice- president marketing RL Ravichandran, this mode of marketing helps in promoting the bottom line of the company, instantly.

On the emerging trends in PM, Contest2win CEO Alok Kejriwal says that the new ‘touch points’ that have emerged with consumers—namely Internet and mobile are allowing PM to be implemented like never before. “Today, while consumers are browsing Internet sites, their demographics are being mined constantly and they are being ‘proposed’ gentle offers by way of ad banners and pop-ups to suit their interest. The fact that Google’s income of approx $2 billion comes from ‘contextual’ marketing proves this point,” he adds.

“PM is no-nonsense marketing action. It is being used to discipline agencies/media buyers who were simply disconnected with the clients’ business and were pursuing creatives for awards and their resumes. PM is here to stay,” asserts Mr Kejriwal.

iContract (the one-to-one communication wing of Contract Advertising) head R Swamynathan says the effective mode of measuring ROI is no longer measured through ‘cost per click’. “The emerging trend to measure ROI is through cost per lead (CPL). Based on the marketing objective, benchmarks are set and then the marketing campaign is measured against these benchmarks,” he says.

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