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DIGITAL MARKETING :

ORGANIZATION

ALANDMANAGEMENTCHALLENGESIN INDIA

A project reportsubmitted by ASHAKAKOTI and PARULNIGAM PGDM(G) 2010-2012


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CONTENTS

ABSTRACT 3

INTRODUCTION 3

WHAT IS DIGITAL MARKETING 4

DIGITAL MARKETING IN INDIA 6

CHALLENGES IN INDIA 8

POSSIBLE SOLUTIONS 12

CONCLUSION 14

BIBLIOGRAPHY 14

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ABSTRACT

This paper is based on the concept of Digital Marketing and the challenges

that come in the way of effective and proper implementation of it in India

owing to the demography of the country. With a substantial growth in thenumber of digital consumers, digital marketing makes possible the shift from

traditional advertisement to direct marketing. However, a strategic path is

required to reach to the digital consumer.

INTRODUCTION

Consumer behavior has changed forever: Consumers are adopting digital content services

faster than previously anticipated, with varying levels of engagement. They are more digital-

savvy, willing to provide personal information in return for perceived value, and increasingly

ready for permission-based advertising. Digital formats such as social media, online video,

mobile communications, gaming and advanced TV enable companies to simultaneously

meet transactional and brand-building objectives.

Spending is moving from traditional advertising toward measurable, interactive marketing.

Combined with spending contraction in the new economic environment, this requires

smarter advertising, and doing more with less.

Therefore it is safe to say that:

Mass marketing alone is no longer viable. To reach increasingly fragmented

audiences requires approaches tailored for new platforms, new offerings and new

experiences.

Reaching the diverse segments requires niche offerings and context via approaches that are

tailored for new platforms, new offerings and, increasingly, new experiences. At a time when

advertisers need to do more with less, closer collaboration among advertisers, agencies andcontent owners can reduce cost while constantly tuning campaigns to achieve desired

campaign outcomes

This poses a new challenge to the managers How to adapt to the ever changing market

trends? They have to learn to adapt so as to pave way for new ideas and initiate planning

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based on these ideas. The emergence of technology and ever increasing popularity of

gadgets have given way to digital marketing.

With digital consumers increasingly in control of their media experience and advertisers

shifting their spend to more interactive, measurable formats, the company managers must

move beyond traditional advertising to combine granularity of targeting and measurement

with cross-platform integration. To adapt and succeed especially in the current economic

environment content owners, media distributors and agencies need to build a new set of

capabilities now: cross-platform innovation, greater insights, open collaboration and digital

processes.

WHAT IS DIGITAL MARKETING

Wikipedia.com defines Digital Marketing as the promoting of brands using all forms of

digital advertising. This now includes Television, Radio, Internet, mobile and any other form

of digital media.

We can also redefine Digital Marketing as the practice of promoting products and services

using digital distribution channels to reach consumers in a timely, relevant, personal and

cost-effective manner.

Whilst digital marketing does include many of the techniques and practices contained within

the category of Internet Marketing, it extends beyond this by including other channels with

which to reach people that do not require the use of The Internet. The field of digital

marketing includes a whole host of elements such as mobile phones, Short Message

Service(sms), Multimedia Message Service(mms), display / banner ads and digital outdoor,

Social Bookmarking, sending a pre-recorded voice messages to a large set of phone

numbers at the time same.

Advertising industry participants cant afford to emulate the music industry, whose

traditional players are expected to lose nearly 35 percent of value between 2003 and 2012,

with revenues for the period forecasted to drop from US$12 billion to US$8 billion. Such

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losses are largely attributed to digital migration: as traditional physical sales declined,

digital music sales rose 69 percent year-over-year from 2003 to 2007.

Although traditional players have suffered, the migration to digital music has benefited

many of those downstream in the industry. Among this group are manufacturers of digital

music players, wireless providers offering downloaded ringtones and ringbacks, concertpromoters and even innovative retailers that offer to set up and provide other services

related to consumers in-home entertainment experiences.

Nokia announced plans to promote N97 Mini (they have even slashed the price of N97 Mini)

using digital promotions and plans not to spend a single money on traditional media . Nokia

plans to spend upto Rs. 7 crores for digital marketing and all of that in just 4 months (ad

networks ).In order to sell N97Mini, they have created getN97Mini.com and for selling N97,

they are promoting http://www.nokialms.com/GetN97/ (which is Nokias lead managementsystem).

In the following figures forecasts of the U.S market digital, mobile and interactive formats

are clearly the key to overall industry growth going forward. Mature channels like print,

traditional direct marketing and TV have 2010 CAGR forecasts of low single digits, while the

combined growth forecast for interactive advertising formats, such as Internet, interactive

television promotions, mobile and in-game advertising, is over 20 percent.

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DIGITAL MARKETING IN INDIA

For India, lets start with the statistics : 40 million internet users in India or 3% of Indias

population represent around 55% of household buying budgets. However, compared to the

$100 million (Rs 400 crore) of digital marketing spend in India, print and TV ad spends are

way higher at Rs 17,000 crores, which is 40 times that of digital ad spends.

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Today, digital marketing in India can no longer be termed as 'niche' marketing, thanks

largely to the exponential growth in Indian mobile ownership and usage. There are now

around 450 million mobile subscribers in India and this number is growing exponentially, due

to the growth of mobile subscribers from rural India. India has the second largest mobile

phone subscriber base in the world after China. On average there are 10 million new

subscribers (source: TRAI report) added every month.

Industry overview

Mobile phones came into India around mid the 90's. Like the rest of the world, initially the

handsets and service costs were high, the infrastructure poor, and the phones bulky.

However the usage pattern evolved rapidly with consumers wanting more from their mobile

devices. Initially, just used as a communication device, it has now grown into a digital

convergence device -- music, games, videos, camera, internet, email, social media, etc., and

of course not to forget voice and SMS.

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Mobile marketing in India

While the online (internet) sibling of digital marketing has a marginal advantage of being

able to act as a 'mass' medium with rich interactive features that are 'seen' and 'felt', mobile

marketing has had to feed off the leftovers of the 'digital' advertising budget and as a

consequence, activity has been mostly limited to SMS and short code response programmes.

However there are some industries that have explored and exploited mobile marketing in

India to a large extent. One of the biggest advantages of mobile marketing is the instant

'call-to-action' that is possible, whether it is in form of polls, voting, promotional codes, or a

request to query. So far, this mechanism of using short codes for advertising campaigns

(especially for a demand-generation campaign) is seen to have some success. The SMS

polling for Indian Idol 3 (the Indian version of American Idol) garnered close to 70 million

SMS votes on the finalists' short codes. Vodafone Tuesdays, a mobile coupon activity, has

more than 10 million subscribers.

The other aspect is the one-to-one communication that is possible with mobile marketing.

This has helped companies use mobile platforms as part of their CRM program. Note: The

mobile phone is the most personal (and intrusive) media vehicle. It is often the core of CRM

programs but its application must be managed carefully for fear of over-use and spamming.

Value added services (VAS) are very BIG in India. They contribute close to 10 percent of total

telecom revenues, and the estimated CAGR by 2010 is around US2,744 million. With rich

feature enabled phones within the reach of many, most marketers are getting into branded

VAS offerings. This has resulted in many mobile offerings such as caller tunes, ringtones,

wallpapers, mobile skins/themes, and branded games.

The future trends in mobile marketing in India point towards location-based marketing, with

applications and features that will run on low-end bare-minimum enabled handhelds too. For

example, RouteGuru is a location-based services company focusing on mass market

consumer solutions. Some of the services are: landmark intelligent turn-by-turn directions

and auto/taxi fare finder service over SMS. MapmyIndia is another company that is offering

technology and content for location based apps, including local maps, directions, places of

interest, restaurants, etc.

Last but not least is the rise in M-commerce. With secure mobile payment gateways and

platforms in place, the marketplace is now ready for mobile marketing fulfilment. Market

estimates for M-commerce in India vary between US$60 million and US$75 million per year.

We are sure it is encouraging and will only grow from here, due to more secure payment

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gateways, increased use of 3G and credit cards, and integration of other services with

mobile service providers.

CHALLENGES FACED IN INDIA

However certain challenges have crept up in the system of digital or mobile marketing in

India-

RURAL AREA PENETRATION

80% of Indian population is based in the rural areas where the internet connectivity is

limited owing to several reasons like lack of service providers, increased illiteracy

rates , geographical location etc. Here the strategy to be adopted cannot be same as

that strategy adopted in metropolitan markets. The language of communication too

cannot be the same for both of these diverse groups owing to reasons like high

illiteracy rate.

TECHNOLOGY AWARENESS

Without even considering the rural areas where the technology awareness is very

low, we will come across many people even in the urban areas where the technology

awareness is low. There may be groups of customers who are using computers or

PDA s on a regular basis but are ignorant of the rapid advances of technology(net

banking, online shopping etc).

ENGAGING THE CUSTOMER

An observation made by a media agency is that 16% of all Google ads served were

clicked through. But does clicking through an ad suggest that it had an impact on a

consumers purchase decision? Companies are in the habit of sending sms and mails

to all the people whose information is present in their database without even

researching the customers preferences. Thus, a student might receive mails quoting

prices of pilgrimage tours etc. the digital websites are flooded with advertisements of

different category of products each trying to grab a customers attention. Thus most

mails go into spam and are deleted before being read.

DIVERSE CUSTOMER GROUPS

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c. More than 10

4. How many times do you pay attention to the ads while searching on google ?

a) Always

b) Often

c) Rarely

d) Never

5.. i. Do you have an account on facebook?

a) Yes

b) No

ii. If yes do you watch the ads on facebook?

a) Always

b) Often

c) Rarely

d) Never

6. How many promotional emails do you receive in a a day?

a. 0-5

b. 5-10

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c. 10-15

d. 15-20

7. Do you often delete messages or mails without looking at the content?

a) Always

b) Often

c) Rarely

d) Never

8. Do the ads on mails and through sms leave an impact on you?

a) Yes

b) No

c) Not really

9. Would you prefer to receive the mails and sms in local language?

a) Yes

b) No

10. Do you want companies to first ask your permission and then give promotional calls or

message?

a) Yes

b) No

This survey was carried out in the Delhi and NCR region. Here, we found that 90% of the

people felt the promotional messages and mails they were receiving were junk messages

and they most often deleted them without even opening the messages. 40% of the people

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preferred receiving messages in their local language rather than English. 85% of the people

wanted the companies to ask their permission before sending out promotional messages

one after the other.

POSSIBLE SOLUTIONS

The recommendations to overcome the challenge of customer filtration can be as follows:

Keep it simple

Whether it is a new car launch, selling life insurance, or promoting a Bollywood movie, SMS

short code still is the best way to go about it especially in a country like India where the

demography is so diverse. When anyone is planning an integrated communications

approach, an SMS short code has been found to increase the response rate. Sprite, from

Coca-Cola India, conducted a short code campaign for which they received close to 2 million

SMS responses in a period of three months. All the user had to do was SMS the unique

number printed on the inside of a Sprite bottle cap, and they stood to gain free talk time.

Diverse delivery mechanism

One of the biggest hurdles now (and more so in the immediate future) is that the growth of

mobile users is going to be from rural India, or people at the bottom of the socio-economic

class. Lower literacy levels amongst these groups suggest that mobile campaigns that are

text-based would only serve well to a few. As a marketing manager, if we are planning a

mobile campaign and the target audience is across the SEC classes, it is advisable that

diverse delivery mechanisms are explored. For example, rather than just a text SMS or

mobile video, an interactive voice response system (IVRS) can also be considered.

The new offerings

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Mobitisements: There are companies creating SMS applications/platforms and micro-

blogging platforms for mobile phones.

For example, the vendor Affle has an SMS platform that is used by more than 6.5 million

users. Upon download of the application, the user can get free themes, skins and smileys

that can be used while sending their SMSes. The advertiser has the opportunity to place his

banner ads, which can be linked to his WAP site. This ad is displayed as footer on the screen

while typing the message and in full screen when the SMS is being transmitted. Way2SMS,

another mobile vendor, targets the user through contextual SMS ads.Users do go for this

platform for the 'rich' features it offers, and that it breaks the monotony of sending a plain

text message.

Internet through mobile

Accessing the internet through mobile phones is now common practice, especially for people

who own high-end models. One can use similar targeting techniques for PC users, including

behavioral, transactional, sequential/re-targeting, location, device/platform and temporal.

Proper implementation of Permission Marketing-

Permission marketing is a term coined by Seth Godin used in marketing in general and e-

marketing specifically. This form of marketing requires that the prospective customer has

either given explicit permission for the marketer to send their promotional message (e.g. an

email or catalog request) or implicit permission (e.g. querying a search engine). This is a

more efficient use of their resources because the offers are only sent to people that are

actually interested in the product.

For example, they ask permission to send email newsletters to prospective customers. It is

mostly used by online marketers, notably email marketers and search marketers, as well as

certain direct marketers who send a catalog in response to a request.

In the United Kingdom, an opt-in is required for email marketing, under The Privacy and

Electronic Communication (EC Directive) Regulations 2003. This came into force on the 11

December 2003.

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Social mobile

If one were to observe the latest ads from mobile service providers and handset companies

in India, the common factor to all the ads is the social media factor (accessing Facebook,

Twitter, Orkut, etc.). As the social networking phenomenon in India takes on a bigger shape,

the networks and handset companies are offering these services by default to users. This

opens new advertising opportunities for us marketers. While these are early days, the new

vista is open for experimentation and innovation.

Several companies, such as Local.com, LinkedIn and Facebook , have announced that

they're getting into the local targeting game by offering geography-based advertising along

with the standard demographic or keyword targeting you'd expect.

Facebook.com, which recently launched a Japanese language version of the site, has grown

dramatically during the past year, gaining 213% to 538,000 visitors. A Hindi version of

Facebook is available and marketers can also use this as a powerful tool to target the rural

as well as urban audience.

CONCLUSION

To sum up, marketing managers have an increasing range of options in front of them for

reaching consumers through the mobile phone. With over 450 million mobiles users in India

and 40 million (and growing) Internet users in India the question is not "if we should", but

"what we should" be doing in the digital space.

Sources:

Wikipedia.com

Berman, Saul J., Bill Battino, Louisa Shipnuck and Andreas Neus. The end of

advertising as we know it.

IBM Institute for Business Value.

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Whatis.com

Permission Marketing-Seth Godin

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