Adobe Digital Dialogue

November 23, 2016 /Digital Marketing /

Increasing digital ad spends is not a winning strategy

Digital ad spending in India is estimated to account for 12.7% of all ad spending in 2016, up from 9.9% in 2015.

 

This num­ber is esti­mat­ed to reach 20.2% by 2020. This rel­a­tive­ly low num­ber, as com­pared to oth­er economies of sim­i­lar size, is due to the incon­sis­tent state of dig­i­tal capa­bil­i­ties in the coun­try.

Major­i­ty of the mar­keters are busy in acquir­ing users, with much less­er focus on engag­ing and retain­ing them. These acquired cohorts usu­al­ly churn after claim­ing the discount/offer, and the whole cycle of spend­ing mon­ey in buy­ing even more expen­sive keywords/ad slots is repeat­ed.

If a brand has to cre­ate a long term growth strat­e­gy to com­pete suc­cess­ful­ly in the dig­i­tal econ­o­my, it will have to build the dig­i­tal foun­da­tion first.

In the next 2–3 years, look out for lead­ing vision­ary brands active­ly invest­ing their time and mon­ey in imple­ment­ing high­ly scal­able con­tent man­age­ment sys­tems, automat­ing the cross chan­nel exe­cu­tion, digi­tis­ing their process­es, and build­ing up state of the art dig­i­tal ana­lyt­ics capabilities. Focus will be on pro­vid­ing a superla­tive cus­tomer expe­ri­ence, which is con­sis­tent and per­son­alised, across chan­nels. Ad spend­ing on dig­i­tal chan­nels in these cas­es, will add more val­ue on top by deliv­er­ing con­sis­tent offers lead­ing to high­er brand recall and even­tu­al rev­enue.

I am look­ing at the lead­ing banks, retail chains, auto­mo­tive com­pa­nies and media organ­i­sa­tions in India to take the baton of digi­ti­sa­tion from eCom­merce and travel/hospitality com­pa­nies and dis­tance them­selves from the com­pe­ti­tion. Brands already ahead in the race, will spend the next few years using more machine learn­ing to enhance the cus­tomer expe­ri­ence. Their offer­ings will soon be avail­able through AR/VR, and should be com­pat­i­ble with oth­er medi­ums to be of val­ue and not just a fan­cy gim­mick.

Lag­gards will keep on focus­ing only on the dig­i­tal ad spends to realise short term goals but will soon run out of gas owing to grow­ing costs of cus­tomer acqui­si­tion and will end up los­ing their mar­ket share to dig­i­tal­ly for­ward com­peti­tors.

Digital Marketing

Join the discussion