‘Post COVID, 100% of marketers will want to invest in digital strategy'
In this edition of 'Beating All Odds', Hareesh Tibrewala and Sanjay Mehta, Joint CEOs - Mirum India, speaks to exchange4media Editor Naziya Alvi Rahman
In our 'Beating All Odds' series, we recognise and honour the leaders who, despite the problems and glitches thrown at us by the COVID-19 lockdown, ensure that our business and economy remain active while trying to contain the damage this crisis can cause.
Today, Hareesh Tibrewala and Sanjay Mehta, Joint CEOs - Mirum India, speaks to exchange4media Editor Naziya Alvi Rahman.
Mirum launched a report one week before the lockdown that said 80% of the marketers are expected to raise market spends, but the observations were from Pre-COVID days. A lot has changed in the seven weeks since lockdown. How much do you think the figures are relevant even now?
HT: We released the report just about a week before the Lockdown. WPP global CEO, Mark Read, happened to be in India then, and we got him to release the report.
While we see this quarter and Q2 will be difficult on all of us. I believe the second half should actually be very favourable for the digital companies, digital businesses and IT companies. The pandemic and resulting lockdown have kind of accelerated the need for digital transformation. If six months back there were people thinking whether our company really needs to go digital, as our supply chain is completely offline and our customer is offline, have realised today that digital has to be there. It is kind of an insurance policy if these kinds of things happen again in future.
People who sensed the need will be investing in digital. People who had already invested in digital will see the need to increase the investment. According to my understanding, once COVID lockdown opens, not 80% but 100% of marketers will want to invest in digital strategy.
Will marketers be left with that kind of money? Because there will be a likely cash crunch in the market when it opens again.
HT: To me, Martech is the heart of how marketing happens. Marketing is not only about putting money on Facebook and YouTube. It really is investing in a product. That is where Mirum comes into play. Being a Martech player, we do a solution building and strategy building. We will guide brands to the kind of e-commerce models they need to build. We will set up technology platforms, which will actually enable brands to make the company digital. Then the companies start spending money on marketing. Whatever money the brands have to kick start their business, they'll need to actually invest this money into digital.
SM: To add to what Harish said, the question in that survey was whether the marketers will increase their budgets on Martech. Eighty per cent of them had said that they would be doing so. As a result, we believe that this will only accelerate, and 100% of marketers will now feel that Martech is a way out. We are talking about businesses that are going to come back. If there was a big early-stage startup, which didn't have money, that is a different kind of a ballgame. But, companies with good balance sheets will see this as a hump to cross. Finally, businesses will survive, there is going to be life after this. But, for the new normal, people will be even more emphatically clear that they need sharper and smarter marketing piece, which can enable them to run even through harms like the current situation.
We have seen already during this crisis that few brands were able to continue their business to some extent business, whether it is through e-commerce delivery or other means. They are the ones who had invested earlier and got their engines running.
Therefore, the ones who did not will only feel that they can't be left unprepared next time, and this is the way to go. There's not going to be a huge number of people in the malls. There are not going to be a lot of people going into activation and events. So, there's going to be marketing money, which would have otherwise been spent in other places, available. And that will be diverted to investing further into Martech infrastructure. I don't think that there should be a problem and there will be budgets available, and that will be in the right places.
Another interesting thing in the report is that it says that there will be a shift of emphasis towards ROI rather than the flat-planting approach, what exactly does this mean?
SM: So normally, in any typical marketing budget, there is a part where you spray and pray. You do a lot of different kinds of spends across various media, and you hope that some of it hits the target and it delivers the money. The traditional marketing norms have probably been to spent hundred, wait for some of to deliver. You don't know which of it is delivering, but as long as something is that was fine. Now thankfully with digital technologies and marketing automation in particular, we are able to sharply define our audience, sharply define our objective for all audiences, literally on a one on one basis.
For example, if you are currently in the market for buying the new dress of a certain kind, I don't want to give you a message anything other than that. I don't want to waste sending a marketing communication about shoes, which you are not likely to buy.
As long as there is sharpness in the marketing, the right audience, the right message, at the right time, the conversion chances are much higher, and which means that if you spent $100, they are effectively spent.
The chances of getting conversion are the highest versus spending $100 and hoping that some 20-30 does hit the right target. That means that your marketing money is giving you a return on investment. Especially now post-COVID, when people are going to have belt-tightening in a way. Marketing will have to deliver a measurable return on investment, and which is what technology is like Martech enabled.
What kind of consumer trends have you noticed in these seven weeks? Also, what would you advise marketers right now?
HT: Interestingly we get access to a lot of data points that are happening in China. Being part of WPP Company, we have the benefit of getting this information. China has been ahead of the COVID curve for about three months.
They started in January, and by end of March, they got out of it. We were able to see what our brands doing in China. Who were the brands? Who was advertising, even while COVID was happening? And how are they faring compared to those who completely went silent? One thing we observed is that at a point of time when there is consumer attention, it is the best time to grab a share of voice and actually build your brand. It happens at a lower cost, and you get better consumer time. When a brand is not just a seller of a product, the brand also has an emotional Connect, and that connection is the brand. If I want to buy something, I believe in the brand. Therefore in times of need, the brand cannot go silent. It has to continue talking to me. It has to be empathetic communication. It doesn't have to be product communication. So when we come out of a crisis, we're still connected to the brand. These brands find a way to pick up market share easiest, compared to somebody who stayed out of market for that period. That is one clear learning that we get from the Chinese market, and that is their guidance to marketers.
SM: There's a data point, which I have read in a report, that whenever there is crisis of this kind, brands that have cut marketing spends post the crisis have dropped their market share to about 60%. I'm talking about reasonably established brands. They've gone from 100% to 60%.
Those who have maintained the marketing spends in spite of a crisis period, they have seen market share go to 2.5 times what their original market share was. And, those brands who increased spend during the crisis have seen market share go up as much as 3.5 times.
The reason is that, at the moment, clutter is lesser. There is not a lot of brand advertising. So, there is a chance for your communication to be visible. Also, because the clutter is less, for the same money, you get better advertising reach. Your marketing message goes much better.
But what to communicate? There should be emphatic communication. Don’t talk about selling. The narrative goes from ‘sell, and ‘see’, to perhaps ‘do’.
Therefore, if you're a brand, for example Domino's, and you've done some interesting work in contactless shipping, that's what you're going to talk about.
You're not going to say that my pizza has this flavour, or is this thick. You should talk about what you've done. If you're a bank, you have enabled some interesting net banking feature, so people even sitting at home are able to get some transactions done. The marketing should be purposeful and more caring. Basically, you could just have a care message, but it should go with the brand's persona. If a brand that never talked about caring suddenly comes out and talk about caring, it will not look original.
But, at least you can stay close to your business and see what you're doing. Maybe you can talk about what you're doing for all your stakeholders, your employees, your partners, etc. There should be some kind of connect there because everybody's kind of cooped up and suffering and you share your story about how you as a brand have taken some steps. It works well, and you still stay on top of the mind recall with the consumer
Why is it that marketers are shying away from advertisements?
HT: It is easy to understand. When I am not seeing my consumers in the marketplace, my instinct is to hold on to whatever cash I have, till I'm able to see an endgame.
The moment lockdown starts opening and people start getting back into the marketplace, we'll see all these marketers come back.
We see a whole lot of brands, with strong balance sheet or strong brands are actually going to become stronger because they will leverage their balance sheet well.
Have you seen your own clients increase marketing spend during these times?
SM: Initially, once this lockdown happened; it took most of us by surprise because we never saw it coming to this extent. If there was a gradual movement into the situation, people would have tried to prepare in whichever way. The first reaction, as soon as the brands were able to grapple with the reality, was to dramatically slow down spends.
Most of them slowed down and some even completely stopped. But now, seven weeks have gone by, and people have had time to analyze what's happening and what is relevant for them as a specific brand. We have a brand whose factories were shut, but two weeks back the factories were finally open and they have products which have a specific relevance in terms of being` bacteria free’, ‘health-oriented’, etc.
They have resumed but they are doing campaigns, which mean ads will be available 24X7. This they were not doing earlier, but now they realized that same money is buying them that.
The lesser budget is buying them a lot more inventory on advertising. It’s free, and there's no other competitor who is advertising at this point. We have brands in the pharma sector who have very high relevance at this time. There is a lot of healthcare communication, which needs to happen around COVID-19. If you have diabetes or an allergy issue, how does it connect to COVID? People have of course have increased their visibility on digital. Specific brands, who see relevance, and there are no fundamental hurdles in reaching their product or service out, have been not only maintaining, but some of them are increasing as well.
Digital is not just about advertising. It also means technology, marketing automation and taking care of your website. In our own business, we have a creative and media part. They have taken marketing automation part of your business, and I see no drop in revenue. Every single client was in the process of building a website, or getting their marketing automation set up done, continues to do it. About three weeks back, we acquired a major retailer. When we will look at digital holistically, maybe advertising is where people will not spend money. But are they going to be spending money by building the backend maintenance?
How are you keeping the morale of employees high? What are the initiatives that you've taken? What kind of communications and conversations have you had with them?
HT: This is not the time for leadership to think only in terms of profits and operating margin and cash flow. Leadership needs to realize that only when you have stories of people working in the company does the rest of the business manifest sitting in their own offices. This is the time that empathetic messaging steps up and brands say, “We will do whatever it takes to take care of our people.”
We started remote working even before the government announced lockdown. We were already working from home for almost a week before it happened. Our HR team has a concept that at six o'clock in the evening, the company assimilates in town hall, and somebody does some performance and others enjoy. To keep the morale high, we came up with the concept of speed dating. Normally in a large company like ours, you don't know people in other teams. We thought this was a great opportunity to get five people randomly meet five different teams into a virtual room and get connected with each other and make friends.
All are heads of departments, including us, are doing town halls with smaller teams. This is the time to over-communicate and demonstrate empathy. We need to show our people that as a company, we are strong and will come out of it as a winner.
SM: In addition, as a team, we've somehow managed really well to collaborate, in spite of being remotely set up. We are producing some really good work for our clients and that itself is a huge motivator to people.
The fact that they could pull it off is like a challenge. The copywriter is not sitting next to the art director, the video guy somewhere else, and videos have to be shot in different places. Some of them are shot at people's homes; some are being shot over zoom calls. Interviews are being done. And then, piecing that together and then coming out with a production which looks like you would have done in a proper studio with everybody there. Just to the satisfaction of getting that out, and then client appreciation and appreciation on the social spaces is a huge motivator. We also have our internal newsletters where we are acknowledging stuff which happens. We're talking to our employees and empathizing with them. We are giving time off to people who are dealing with any crisis. Sometimes, there are some infrastructural issues for that we are finding ways to figure out and support our team through all these up and downs. We see that people have managed to stay reasonably upbeat in spite of all these challenges. And I think the delivery of good work is one of the big motivators as well.
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