Points of View: Will the slowdown hinder experimentation in digital advertising?

By Kapil Ohri , afaqs!, New Delhi | In Digital | January 09, 2009
A slowdown generally means cuts in discretionary ad spending. Will marketers stop experimenting with digital marketing? afaqs! finds out


President and chief operating officer, Times Internet

The economic slowdown will spur experimentation and trial. In the West, Internet advertising is big, but it is still very small in India. There are indications that the slowdown has led to advertisers beginning to shift their budgets to the Internet.

While ROI (return on investment) is the least common denominator for advertising spends across platforms, it is an oft-overused term in Internet advertising. Many insist on running a campaign for an extended duration, irrespective of the fact that the campaign objectives through targeted CTRs (click-through rates) may have been achieved long before that. Even the most evolved advertisers look to search marketing for pure-play ROI buys and use display advertising for hybrid buys, combining branding and performance.

Gaurav Gupta
Marketing director, General Motors (India)

We foresee a situation of growing inventories, desperate retail environment and overall reduced spends across most industries.

This scenario warrants a stricter vigilance on experimentation in advertising campaigns - be it in traditional or new-age media. Spending on digital media as a percentage of overall media budgets still hovers around single digits in most categories.

Marketers who have not tasted early success in digital media will be wary of continuing or extending their marketing spends. The early adopters will pick select best practices or past successes and continue spends. ROI-driven campaigns will be the flavour during 2009 with the brand campaigns limited to new launches at best.

Effective customer relationship management (CRM) will be the mantra for survival and success. Digital media aids in effective CRM and relying solely on lead generation would be an under-exploitation of the potential and self-defeating in purpose.

Santosh EG
Digital marketing director, MRM Worldwide

Digital advertising in India has, by and large, been experimentation. Only a few industry categories such as banks, travel portals, shopping sites and insurance have a focused approach.

Experiments can be quite costly in a slowdown. So, the motto would be, "Stick with what worked". As online advertising is sold on the "measurability" factor, marketers would also expect the same from all their campaigns.

Each campaign would be benchmarked against a predefined ROI. The online collaterals used to achieve the ROI may vary, depending on the publisher ad inventory. Search marketing or pay per click ad campaigns and low-cost activities, such as social media marketing, buzz marketing or viral ad campaigns, will be the focus areas for marketers.

Shubodip Pal
Head, marketing, PSG, HP

If there is an impact, then the most modest impact of the recession will be on the newer media, such as out-of-home, cinema and wireless media.

Social media will prove to be an interesting and cost-effective way of communicating with the consumers directly, without a long-term commitment. Digital advertising enables behavioural targeting and reduces significant waste, by cutting down on the ad spend on people who have no interest in your product.

Will advertisers start demanding more accountability from every rupee they spend? Yes, they will and they will also want to play safer by sticking to tried and trusted media, for instance, TV and print.

But when it comes to digital, I would personally go ahead with lead generation and ROI-driven activities, rather than brand-building campaigns. For instance, if we used to allocate Rs 100 on digital advertising and if it was 50:50 spends earlier between brand-building and lead-generation campaigns, now, it would be 20:80 in favour of lead generation.

© 2009 afaqs!