From the rear-view mirror & the windscreen
Guest Column: Alok Sinha, Chief Strategy Officer, Initiative India, pens down his perspective on the year gone by and the year ahead
The rear-view mirror
Big data takes shape.
The talk around big data has been around for a while. 2019 is the year when talk shifted to action in significant ways. Marketers have started using data a lot more to drive personalized offerings to customers. Its use is gaining significance in shaping campaigns, messaging and of course products and services.
The other big trend whose contours began to emerge in 2019 is "cord-cutters". This is new media jargon essentially includes consumers, who are disconnecting from traditional TV and migrating to the OTT platforms. While this number is small today, it is an important media consumption shift. The younger target audiences are more likely to skip traditional TV and head straight to content on digital platforms. As these younger consumers mature, over the next 5-7 years, their consumptions pattern will be significantly different and will merit a close watch.
The third trend is obvious. In a country like India, you can’t get away just with just Hindi and English and the power of regional media has unleashed. Whether it's print or online or digital platforms like shopping apps, regional content and regional play is becoming significant; and it is only going to get stronger as we get into 2020.
2019 is also the year when digital penetration took deeper roots in class 3 and 4 towns, and the pace of digital adoption has accelerated substantially, driven largely by affordable data plans and growth of affordable smartphones.
Omni-channel strategy which have been around as a concept for a while, also started to shed its theory tag and entered the realm of practice. This has been driven by the realization that despite predictions of its death, TV is here to stay and at the same time, with digital adoption taking deeper roots, everyone is scrambling to find ways to ensure that these two mediums start talking in-sync and not in silos. This is especially critical when it comes to brand communication designed to evoke a meaningful consumer response. If these two mediums continue to work in silos, the media ROI will drop significantly. Omni-channel, in 2019, much like data, has begun the transition from a concept to a necessity.
Crisis of credibility
Another key trend of 2019 has been driven by the climate of fake news. Consumers are actively seeking credible sources of information. They are actively questioning the credibility of influencers a lot more. They are becoming more dependent on a few influencers they trust as opposed to generic views.
Onwards to the future
Application of technologies like AI & AR/VR, which were subdued in use due to bandwidth and cost limitations, gained traction in 2019. With growing smartphones ownership and reducing data costs, these technologies will find greater application in marketing plans in 2020.
The shift we are seeing from a mono-channel to omni-channel brand communication ecosystems is throwing up its own set of challenges. A core challenge is how the same pool of money might be distributed across different media to evoke a stronger consumer response.
As data becomes more and more important, the challenge with assimilating, understanding, analyzing and actioning that data will be an ongoing challenge. Developing capabilities to slice, dice and action this data to gain a strategic advantage is an area which will merit investment.
The regionalization trend is going to force marketers to re-think how they approach the different socio-cultural regions in the country. In addition, the accelerated adoption of digital technologies and content will stimulate conversation on brands-as-content creators. In a landscape of content deluge, this will be a critical conversation if brands are to avoid getting lost in all the noise.
Recession & AdEx expectations
Despite the conversations around economic slowdown and job stress, the good news is, we can expect growth in 2020. In 2019, while the auto sector cut back significantly on spends, sectors like food, beverages and FMCG’s either maintained or grew their spends. The general elections helped to tide over the cutbacks in AdEx in 2019. Since the election stimulus will be absent in 2020, AdEx is expected to be challenged but not a lost cause. There are promising green shoots in stressed sectors like automobiles. The government focus and initiatives to revive both the demand and supply side of the economy augurs well for 2020.
Brands will have to navigate this macro-economic reality in 2020. The smartest thing to do is to learn from the last global recession (2007-08). A key learning derived from that experience is that brands which maintained their level of spending grew much faster once the turmoil was over. Brands which treated marketing as a pure expense and cut back on their marketing spends, took a longer time to regain their pre-recession market levels.
If we have to learn from that experience, then it would be the prudent thing to maintain spends. From a media spends perspective, marketers will need to think of ways to maximize media ROI rather than spread their investment too thin; whether through portfolio optimization or geography prioritization or in other ways. The important thing is not to become too myopic in this environment and begin to see marketing spends as an expense; Rather the situation demands the courage to see it as a future proofing investment.
WhatsApp, Instagram, LinkedIn, Twitter, Facebook & Youtube