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.

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