We spend money only when we can measure it: Sandeep Aggarwal, CEO, Droom
In conversation with exchange4media, Aggarwal speaks about how the company plans to step up its marketing and branding game through its Rs. 225 cr budget
Online automobile marketplace and services platform Droom recently announced that it will spend Rs. 225 crore in an advertising blitz in the next 12 months to create a national footprint. The spend towards marketing, as a means to drive new business, comes as investors have been pushing start-ups to curb cash burn to drive unit economics and profitability. In a conversation with exchange4media, Sandeep Aggarwal, CEO & Founder, Droom tells us about how the company plans to step up its marketing and branding game through this budget.
What is your marketing mantra?
I think our marketing mantra comprises four factors. One is that we are highly obsessive about ROI. Second is that we spend money only when we can measure it. Third, we like performance-based marketing. As they say, what you cannot measure, you cannot control. The fourth one can be attributed to the component of virality.
Tell us about your performance-linked marketing approach?
Growing at the rate of 225%, we are right now the third or fourth largest ecommerce company in India. We are the largest auto-portal on 65% of all online transactions for automobile and the largest hyper-local marketplace. Our marketing spend per cent of gross revenue is probably the lowest for any ecommerce company in India. On an average, an ecommerce company spends 10–15% of their gross revenue on marketing whereas we are spending under 4.5% of our gross revenue for marketing. That’s the only possibility because for us, the most analytical department is not finance or research—it is marketing. The things we measure obsessively are the marketing spends and the returns we get out of that. We have always tried to link our marketing span with performance and results but our categories are such that you must build a larger market brand and that is why we are allocating a sizeable budget for TV, print, radio and outdoor. We are ROI-focused, data-driven and if we hadn’t spent the marketing budget so efficiently, I don’t think we would have received this much. You only make this much money if you spend the previous money very thoughtfully.
You said that you measure obsessively. What are the metrics that help you gauge the efficacy of your marketing activities?
We have a third-party company which gives an insight on brand recall and brand awareness. We measure Rupees in terms of the total traffic we receive, increase in total app download, likes, percentage increase in direct traffic and organic traffic. Then, we measure marketing spend as a percentage of GMV (Gross Merchandise Value) on whether it is the same as before or has gone higher.
What is your marketing focus?
Our marketing focus is core online shoppers.
What are your criteria for brand tie-ups and associations?
We look at a brand or company that we can associate with Droom, as a brand and that exudes vibrancy, energy and youthfulness. Another factor is if the brand is more cohesive with what we do for a living. Also, rather than a standard tie-up, we look for a brand that can cause a spill-over in terms of virality.
Any brand engagement activities in the pipeline?
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As a part of our new campaign, you will see the brand in huge concentrated areas like shopping malls, college campuses and universities throughout India. You can expect a lot of activation. We will try to engage people with OBV, eco and history.
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