How Google Changed Marketing Forever............The Importance of Relevance

From time immemorial, organizations have been dependant on traditional mass media like Television and Newspapers to communicate their offerings.

Look at the figures on the Graphics on the left. According to ZenithOptimedia, a whopping 63% of the estimated $ 447 Billion Global spend on Advertising will be accounted for by these two communication media. However, what troubles adevertisers across the world is the fact that both these media suffer from accountability. There is still very few credible ways to measure how many people have actually seen your advertisement on the Television or neswpaper, or even if they have seen it, are they really interested in what you have on offer. There is still no way to know.

Digital Marketing has, for the first time in the history of advertising, held out the promise of accountable advertising. Google is the prime competitor for the Media Giants like News Corporation. A lot of shakeout is likely to happen in the coming years as advertising dollars move rapidly to the digital world. Look at the rapid clip at which Internet Advertsing is growing and compare it to the anaemic rates of growth of TV advertising and the degrowth in newspaper advertising and the picture becomes quite clear.

Let us now understand how internet advertising started.

Bill Gross in 1996 had started a company called IdeaLab (www.idealab.com) and they were the original innovators in the world of Digital Marketing, specifically Internet Advertising. Founded in 1996,IdeaLab has created and operated more than 75 companies with 30 IPOs and acquisitions.

In 1998, IdeaLab launched GoTo.com with a simple but revolutionary idea. The Advertisers could choose to dispay their ads based on what a searcher  was trying to find.  A searcher who would type "International Schools in Hyderabad" and if the management of the Sancta Maria International School in Hyderabad chooses to advertise on that word (phrase would really be the more appropriate term), the advertisement of the Sancta Maria School would show up in the search results.

There were four simple but revolutionary concepts that made this business model pathbreaking.


The first is relevance. A major shortcoming of mass media vehicles is often advertisers are paying for readers and viewers who are just not the relevant audience. The Management of the Sancta Maria International School is asked for a huge investment for an advertisement in the Times of India based on its  circulation figures. Apart from the fact that most circulation figures are not credible, the fact is a very large number of these subscribers are just simply not relevant. Think of a senior single citizen with no grandchildren. Why should the advertiser pay even a single paise for reaching out to him? 


Think of the Billions of Dollars that advertisers spent on advertising and it is quite mindboggling to think that a very significant percentage of this is spent on carrying messages to irrelevant individuals and the significance of it will dawn on you. 


Does it make more sense for the management of Sancta Maria to pay a sum of Rs. 20 for carrying an Advertisement for a person who is searching for "Schools in Hyderabad" or a sum of Rs. 0.50 per subscriber of Times of India,Hyderabad. While Rs. 20 looks a much higher figure than Rs.0.50, the interesting thing is in the first case, the audience, though, much smaller than in the second case, is a much more relevant audience. You will not really start searching for a school in Hyderabad unless you have a specific purpose and it is quite logical that most of such searchers would be looking for a school to admit his children. In the second case, while the audience looks great in terms of numbers and the cost seems low in terms of reaching per subscriber, the relevant audience will be a very low percentage. 


GoTo.com's Model was the first which promised to display advertisements to someone who is actively seeking information. It makes much more sense to display an advertisement to someone who is actively seeking information rather than a passive audience who is probably not at all interested in your product. These ads would also be considered helpful by the searcher, as he is looking for a solution to his problem. 


What is  interesting was the fact that this was the first attempt  to achieve a synergy between the goals of the searchers, the advertiser and the Search Engine on single Search Page. 


What is the goal of the Search Engine? To dispay results in a fashion that satisfies the searcher and he comes back again and again. One of the key aspects that will determine whether the searcher will come back again and again will be how satisfied the searcher is with the results. The searcher is looking for information and he is likely to welcome advertisements which could promise him the solution to his problem.


What is the goal of the Searcher? The searcher is simply interested in finding a solution to his problem.


What is the goal of the Advertiser? To serve up ads to people who are searching for a solution to their problem.  And the advertisers offering as expressed in their Advertisement holds out a solution to searchers who express their problem using search terms.


This was a Win Win Business Model for all three parties-The Search Engine, the searchers and the advertisers...


I shall continue in the next post...

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Bharti-Wal Mart Brand name

Was surprised to read about that Bharti WalMart proposes to use the brandname "Best Price Modern Wholesale" for its cash-and-carry stores. They propose to use this name for the 10 odd Cash and Carry Stores they plan to open till 2015. I thought one of the cardinal rules of branding is to keep the name short, sweet and easily pronouncable. Ideally the name should have 2 or 3 syllables or even one. Can you imagine this name being spoken on the phone? "Good Morning,Best Price Modern Wholesale".....This could prove be a costly mistake for Bharti Walmart.
Another important factor that needs to be kept in mind for any naming decision is that the name should be unique in its industry and should stand out among the combinations. Monster.com definitely stands unique among its different competitors like Jobsahead.com,Jobstreet.com and a number of similar sounding names. The two current competitors in this business in India are Metro Cash& Carry and Shoprite. Both Metro and Shoprite have selected their names carefully and well. Both are short and easily pronouncable.
The third factor that should be remembered in any naming decision is that the name should be legally available and defensible. While I am sure that the company would have done the necessary due diligence, I still wonder whether the Controller General of Patent Design amd Trademarks, GoI will issue a registration certificate as they might consider parts of the name like Price and Wholesale too generic.
A brandname should not lend itself easily into abbreviations,or otherwise we should be prepared to sink in huge amounts to make the abbreviated name popular. With such a large name, the temptation to abbreviate it to BPMW would be irresistible.

How a retailer can use blogs for marketing

Yesterday, I was chatting with a close friend on how a retailer can use blogs for marketing. She was telling me how retailers spend literally crores of rupees in traditional media like print, television and outdoor. The fact is that a large number of people responsible for marketing decisions for corporates in India are blissfully ignorant of the power of new media. Blogs and social networks are two very powerful media to use to address cutomers otherwise so very difficult to reach.
Let us disuss for example a music retailer. How does a music retailer use blogs for marketing? A large music retailer would of course carry a number of titles in each genre like Rock,Pop, Disco, Indian Classical, Western Classical, Reggae, etc.

An Indian music retailer can employ the following strategy. Let us take,for example, rock music. Every large Indian city has a few very well known rock musicians or DJs who have indepth knowledge about rock music. The retailer can contract with say, Nondon Bagchi, who is an acclaimed rock musician in Kolkata and who is a very good writer, to start a blog on rock music. Writing a good blog requires major investments of time and should come from a person with cerdibility. The retailer annd Nondon enters into an agreement that the retailer will sponsor two hours of Nondon's blog writing time every day.

Nondon writes regularly on this blog, discussing the different subgenres of rock, discuss the leading bands for each subgenre, disusss individual songs, mention the bands' travel plans, etc etc. The crux is that the blog should be a credible resource and hanging out place for anyone who is passionate about rock music. Nowhere in the blog is there any mention of the retailer at all-this is so very critical and is a point that must be understood by marketers. The moment the blog is seen to be plugging for a product or a store, the blog looses credibilty.

Nondon's Rock Blog over a period of time turns out to be an authentic place to hang out for rock lovers.This blog could be used intelligently to build up interest in an artist or a particular album. And when the album reaches the stores of the retailer, it just flies off the shelf. Why?? That is because the guy who walks into the store is already so interested in the album, the store becomes just a point of picking up the CD from. The biggest problem that a retailer faces is that till a person actually walks into the store, all the retailer can hope for is that the person has received and imbibed the communication directed at him. The blog can be a great resource to engage the customer in a nonthreatening fashion and develop interest in them. Today's customers hate being sold to and they simply switch off most communications directed at them. And so you see marketers complain about low ROI on the marketing rupee etc. The days of mass communication is over-it is the age of engaging customers,developing interest and
attract people who would not have bought otherwise.

So this is how I think the strategy for the music retailer should be:
Appoint a blogger who is an expert in a particular genre to blog regularly. Have,say, 5 blogs to start with in different genres.
Appoint a Chief Blogging Officer to follow the conversations going on.....Follow,not monitor and control, the conversations that are happening....
Build communities of music lovers....This is a time consuming exercise, but far far less expensive medium than mass communication....

Disruptive Technology

Very simply, the term "disruptive technology" refers to new less expensive and more efficient products and processes which displaces existing technologies. Examples abound. The printing press replaced manuscripts while personal computers displaced typewriters. Historically,canals were the primary modes of transport and were replaced by the railways. Digital cameras are displacing film cameras while cellular phones have displaced fixed telephony. The ubiquitous floppy drive has been displaced by the flash drive while large minicomputers have been replaced by networks of personal computers.
Disruptive technology is a key tool that comes in extremely useful for marketers trying to differentiate their offerings from others and sometimes leads to creation of completely new markets.

Hypercompetition in the Indian marketplace

In every category of products and services, there is a rapid increase in the number of competitors. Just consider the Indian consumer. In 1995, a telecom subscriber in India had to avail services from the Telecom Department of the Government. In 2008, he has almost a bewildering range of choices like BSNL,Vodafone, Airtel,Reliance and Idea . An air traveller in 1995 had to depend on the state owned Indian Airlines.Today he chooses among Jet,Kingfisher,Indian Airlines and Paramount Airways. For an Indian looking for a Life Insurance product, in the 1990s there was only the state owned Life Insurance Corporation of India while today, he chooses among Birla Sunlife, Max NewYork Life, ICICI Prudential Life Insurance, Tata AIG and of course, LIC.
Such a rapid explosion in choice has been experienced by the Indian consumer for almost every product and service-cars, education service providers etc.

The New Economy-Impact on Marketing

The forces of globalization is having tremendous impact on traditional marketing practices. There are visible worldwide trends in consumer needs. Michael Jackson concerts attract enthusiastic audiences from USA to Japan. Companies are launching "world products" simultaneously around the world. Apple launches its MacAir Notebook computers across different countries.Consumers are increasingly and happily acquiring products manufactured in distant lands. Consider the cellphone you posess or the hard disk in your computer. Chances are that it has come from far away lands. Services are being executed from different countries across time zones. Call centre workers in Hyderabad attends customers from New York over the phone. Currency is becoming more freely exchangeable. Boundaries are rapidly disappearing.

One of the direct effects of the forces of globalization is the rapidly increasing pace of obsolescence. This is evident in technology and fashion markets like automobile, cellular, computers, internet service providers. Companies seem to be in a tearing hurry to introduce products using the "latest" technologies. Visit your neighbourhood stores selling laptop computers after three months and you will be greeted by a complete new range of products from Lenovo,Dell,Toshiba and Acer. Such a pace puts tremendous pressure on the marketers to get it right in terms of the product, as well as the right quantities of the products to be manufactured, and inventoried at different points in the supply chain.