Marketing Spends Are Quickly Moving To The Developing Economies

The lure of huge online audiences, data-driven metrics, and higher returns on investment has accelerated the migration of marketing dollars from old media to new. The largest global marketers are ramping up spending, drawn by the huge potential opportunities offered by rapidly expanding wealth in the developing world. Yet the benefits of globalized marketing mask enormous hidden costs and risks: marketers are accelerating investments in economies where they typically have only a modest ability to track and assess results or optimize their return on marketing investment (ROMI). As these multinational companies throttle forward, they risk stalling instead, wasting millions of dollars on ineffective marketing initiatives. More crucially, they are jeopardizing their hard-won momentum in gaining competitive advantage in the economies now driving global growth.

There is a better way. Based on our experience in many countries, including Brazil, China, India, Russia, and Vietnam, we have identified five practical steps that marketers can take to jump-start their ability to measure marketing effectiveness in RDEs.

Media spending alone in developing economies increased by up to $60 billion from 2007 through 2012. Total digital-media spending worldwide, meanwhile, rose by about $55 billion. While some of the increased spending in emerging economies includes digital media, much of it is flowing to traditional media, such as television, magazines, newspaper, radio, and outdoor advertising.

Many large companies today spend more on just the advertising portion of their overall marketing budgets than they do on capital investment—often deploying far less analytical rigor in tracking the return on investment. Among a sample of more than 150 Fortune 500 companies that publicly report their advertising expenses, nearly a third devoted as much to advertising as to capital expenditures. Nearly half reported that their advertising expenses rose faster than capital investments over the preceding five years.

One of the world’s 100 largest brands found that the return in its best market was 27 times better than in its worst. Even in well-developed, data-rich markets like Japan, the U.S., and Western Europe, many companies are still frustrated by their inability to measure and optimize marketing performance. Difficulties are often compounded in developing markets, where the challenges can include the following:

• Lack of accurate sales volumes and point-of-sale transaction data
  
• Absence of accurate and consistent media delivery and exposure data, such as gross rating points and circulation
  
• Poor-quality sampling and market-research panels that undermine the use of many traditional tools for gaining consumer insight
  
• Opaque cost-accounting practices among marketers, their agencies, and media companies, including significant—but invisible—rebates
  
• High turnover at thinly staffed commercial organizations that hinders data tracking and analysis

Five Steps for Jump-Starting RDE Marketing Measurement:

• Build your team
• Work with what you’ve got
• Develop a “common currency”
• Map the road ahead
• Anchor the roots- anchor the roots of your marketing-effectiveness efforts firmly throughout your organization.

Original link to the post is here. 

Why Online Reviews Are Important?

I read this awesome post on HBR that prompted me to write this blog post here. Before I start discussing further, most part of this post is from that post.

With the growing availability of opinions from experts and users, the importance of a brand name had diminished. In the past, buyers typically made relative comparisons (“Is Brand A better than Brand B?”) or went by the maxim “You get what you pay for.” They were largely dependent on information provided by manufacturers in the form of marketing. Today, thanks primarily to user-generated reviews and people’s tendency to consult social media friends about purchases, buyers have other options. The wealth of peer-to-peer information and the unprecedented availability of expert opinions give them access to what’s known as absolute value—a rich, specific sense of what it’s like to own or use the goods they’re considering.

Every marketer is aware of the rise of online reviews and other sources of peer-to-peer information, but many neglect this trend and market products much as they did a decade ago. We believe that many companies need to dramatically shift their marketing strategies to account for the rising power exerted on future customers by the opinions of existing customers. The experts at HBR have created two tools to help managers do that: the influence mix and the O continuum.

The Influence Mix

Customers’ purchase decisions are typically affected by a combination of three things: Their prior preferences, beliefs, and experiences (which we refer to as P), information from marketers (M), and input from other people and from information services (O). This is the influence mix.

Think of it as a zero-sum game: The greater the reliance on one source, the lower the need for the others. If the impact of O on a purchase decision about a food processor goes up, the influence of M or P, or both, goes down.

In recent years O has taken on increasing weight in many categories, but plenty of exceptions remain. For example, habitual purchases (such as milk) tend to be dominated by P, while someone shopping for a toothbrush is most likely to be swayed by packaging, brand, pricing, and point-of-purchase messages—all components of M.

Companies need to ask: To what extent do consumers depend on O when making decisions about their products? We present the answers as points along the O continuum. The closer your product is to the O-dependent end, the greater the shift in how consumers gather and evaluate information about it.

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The O Continuum

Once firms understand where a product falls on the O continuum, they can consider the strategic implications in four realms:

Competitive position. In domains where customers depend mainly on O, branding takes on less importance, and newcomers find relatively low barriers to entry as a result. This is also apparent in the restaurant business: Research by Michael Luca, of Harvard Business School, suggests that in cities where large numbers of diners rely on Yelp reviews, independent restaurants tend to benefit, while chains and franchises often see their revenues decline. 

Companies in O-dependent markets can also diversify more easily than others, because new peer-to-peer information can overcome long-held conceptions about what a company is (and isn’t) good at. LG and Samsung have taken full advantage of this capacity, moving beyond their original core products (electronics) into a broad array of tech goods and home appliances.

In general, we see greater market-share volatility in domains where customers depend mainly on O. (Witness the swift declines of Nokia and BlackBerry.) Conversely, brand equity and loyalty can protect established players in O-independent domains; brands such as Clorox and Bud Light, influenced primarily by P and M, enjoy relative stability. O is also not of great concern to the likes of Grey Goose vodka and Hermès—brands for which prestige and emotional ties play an important role and quality is a given.

Communication. Let’s consider what happens in this arena for products suited to O-dependent purchase decisions. In recent years many camera buyers have turned to ratings and user reviews as their main source of information. This means that celebrity endorsements are less effective than they once were. Banner ads intended to create or reinforce brand awareness are not very successful either, because when it comes time to buy, the weight of trusted reviews usually overrides any residual effect of fleeting exposure to an ad. Instead, companies such as Nikon and Canon should focus on generating user interest in particular products and promoting an ongoing flow of authentic (and positive) content from O on internet retail sites.
Consumers are less likely to consult O about purchases that are not very important to them—most people don’t go on Facebook or Twitter to ask “What kind of paper towels should I buy?” or “What brand of detergent do you like best?” So marketers trying to reach O-independent consumers can be guided by some of the old rules, including many traditional M activities. P&G, for instance, can still benefit from persuasive advertising and eye-catching store displays for Bounty and Tide.
 

Market research. Companies in domains that are not susceptible to O can continue to draw on conventional market-research approaches, but those in O-dependent areas need to think differently. Market research usually aims to measure P—it tries to predict the kinds of products consumers will like by assessing their preferences in the past. But as purchase decisions become more reliant on O, rooting around in consumers’ psyches to understand P yields lower returns. For example, a market research study conducted in early 2007—before the release of the first iPhone—concluded that U.S. consumers would not be interested in a “convergent” device that combined the functionality of a cell phone, an MP3 player, and a camera. (Whoops.) What went wrong? The study had measured P, but as soon as the iPhone hit the market and early adopters began gushing over it, people became influenced by O. Instead of measuring individual consumers’ preferences, satisfaction, and loyalty, marketers should redirect resources to the systematic tracking, coding, and quantifying of information from review sites, user forums, and other social media. 

Product segmentation. A product’s location on the O continuum often varies across customer segments and from country to country. One group of consumers might rely primarily on O, while another might be more attuned to M. And some distribution channels are less conducive than others to O. (Shoppers in brick-and-mortar stores are often more susceptible to M than online shoppers are, for instance.) Companies should analyze different consumer segments and tailor their marketing strategies accordingly. When communicating with segments that rely on M, a company can use advertising to build top-of-mind awareness, persuade customers, and position its offerings—but those strategies probably won’t work for segments that rely on O. Marketers should also bear in mind that the degree to which a particular customer relies on O might vary with situational factors. For example, some of the people who take full advantage of O while shopping for electronics online may come under M’s influence on Black Friday, when ads touting deep one-day-only discounts abound. With not much time to decide or to consult reviews, they may pick up products impulsively, in the belief that “if it’s on sale on Black Friday, it must be a good deal.”

Biggest Challenge In Online Reviews

When we talk with companies about shifting their marketing mix in recognition of the rising power of O, we hear one consistent objection: Growing suspicion (and in some cases, proof) that online reviews are subject to manipulation and fraud. Some marketers believe that consumer reliance on O will decline as more shoppers become wary of deceptive reviews. We disagree. Yelp, TripAdvisor, and others are becoming increasingly sophisticated at weeding out fake reviews, and consumers are developing a better sense of which sites (and which individual reviewers) they can trust.

Consumers used to the richness of online reviews will ever return to relying on traditional M. Consider two data points. First, 30% of U.S. consumers say they begin their online purchase research by going to Amazon for product information and reviews; second, studies commissioned by Google have found that shoppers consult 10.4 sources of information, on average, before making a purchase. Voracious information-seeking has become deeply ingrained in many consumers, and we can envision no scenario in which they will see traditional marketing as a better provider of product information. 

The sources of O change rapidly. New review sites and game-changing technologies can suddenly appear. For instance, consumers who use smartphone apps such as ShopSavvy to compare prices can minimize the weight of M on their decisions even on Black Friday. The idea that a new website or app can undercut years of careful messaging may be deeply frustrating to marketers—but it is a reality they must face. As the influence mix evolves, success will come to companies that can closely track the sources of information their customers turn to and find the combination of marketing channels and tools best suited to the ways those consumers decide.

This awesome post can be found on this link.

TWITTER’S CELEBRITY PRESENCE & THEIR RACE FOR FOLLOWERS

We all know what an impact Twitter has on everybody across the world and how it has become a force to reckon, which has taken the web world like a storm. There is no doubt that Twitter’s simplicity has played its part in climbing the ladder to success. The thing which makes this micro-blogging site even more popular is its Celebrity presence. This is no more a hidden secret that Celebrity presence has pumped up a large numbers of users on the website and there is more number of people, who are following their favorite celebrity as it would have ever happened on the internet before.

Twitter has been able to amass celebrities all across the globe from various professions and that has been Twitter’s one more catchy success story. Twitter has a gathering including the TV Anchors, Comedians, Sport Stars, Pop Stars, Politicians, Authors, Musicians, Actors etc to name a few. We have Stephen Fry, Lance Armstrong, Britney Spears, Barrack Obama, Shaq O Neil, Al Gore, Neil Gaiman, Arnold Schwarzenegger, Demi Moore, Mallika Sherawat, Priyanka Chopra etc etc. You just name a celebrity and it will be on Twitter. Twitter, lets say on the other side has given celebrities the power to play with their popularity and experiment few interesting things on the internet.

Whatever, it may be but it’s very clear that Twitter as a business rose because of the Celebrity presence and Celebrities grew their popularity through Twitter. Twitter has proved the theory of interdependency true again. Twitter by itself has understood the importance of celebrity presence and that’s one reason why Indian Bollywood Actress Mallika Sherawat was invited to Twitter Headquarter. The news of actress spread like a fire across India as ideally intended by Twitter and amassed a huge number of users post Mallika’s visit. What worked in Twitter’s favor was the fact that among the new joiners were also the celebrities from India, which attracted more number of common people joining Twitter from the second most populous country of the world following their favorite celebrities.


As they say it- Food might not taste as delicious as when you are hungry likewise Twitter’s Celebrity brigade wont have been as significant as it is today without its Followers( the fans). Statistically and logically, more the number of people following a celebrity on Twitter more the popularity of that celebrity. Moreover, why would celebrity want to miss an option so simple of staying connected to masses just by text-ing(tweeting) few lines about themselves and gain popularity. Not only Twitter is helping celebrities reach to masses, it has also provided them a platform to market their stuff on the web by themselves, but also provided them with the opportunity to get reviews and suggestions about their soon to be launched product. As a result, Celebrities tweet when they launch a new book, which they wrote or when they released the music for their new movie or when they are going to take interview of some famous politician on their tv shows or when they are about to perform at a concert etc etc and many more reasons like these because all such things help them market themselves as brand and help them grow their businesses.

Beyond all, Celebrities are humans and the greed of success and popularity co-exists among all. So, it matters a lot to a celebrity that how many people are following them. They feel happy and thank their followers when a milestone is reached. They feel proud about it. After all being most popular is everybody’s dream. Moreover, being popular helps business too. So, its clear that we love following our favorite celebrity on the Twitter and they loved to be FOLLOWED and I m also hoping that few people start following me after reading my blogs :-)

MARKETING—“YES, IT’S BEING IN THE LIMELIGHT”

This is a well known fact – “Jo Dikhta hai, Wo Bikta hai” (Whatever we see, is what we buy) and the whole marketing world works in alignment to these words. Scientifically and broadly speaking - Marketing is based on identifying, anticipating and satisfying customer needs effectively and profitably. It encompasses market research, pricing, promotion, distribution, customer care and your brand image. The most accomplished way of marketing is undoubtedly Media. Be it print media like newspaper, ad-papers, pamphlets or our electronic media. The 24-hours on the run, idiot boxes like TV, Radio or the billboards chasing us all around the world along the highways, cities, metros, railway stations, airports etc are the most well known means of marketing. All these play a crucial role in influencing the respective target audiences everywhere. But the changing world of innovative ideas has got something really new for the marketing world and this new einsteinium way to market the brand is called – “BEING IN THE NEWS”. Yes, it the latest and the hottest, most successful way of marketing a brand.
Ok you must be thinking how it works. Well, of course being in the news is what called marketing anyways so I m not telling anything new here but being in the news for all the wrong reasons is yet another but fruitful way of branding. Ok how about this – You are hearing news about Rakhi Sawant more often than Tulsi of Saas Bhi Kabhi Bahu thi, you are hearing Shahrukh Khan more than Abhishek Bachchan and how about Paris Hilton rather than Julia Roberts in the news. Well, answer to all these are only one which is being in the News not necessarily for good reasons.
I consider Paris Hilton as the biggest Brand in the world and the reason for that is simple – She is always in the News!!
The best implemented or I would say the worst is that when nothing is happening for these elite group of people then we have ugly things coming out for these stars in the public – be it Shahrukh Khan having a spat with Salman Khan in a party or Rakhi Sawants Kiss incident with Mika or Hilton’s Sex Tapes coming out in public. All these things which might look intolerable or ridiculous to common people but the Celebes just love these scoops to be in the limelight. Gone are those days when image would matter more than being in the news, now it’s more important being there rather than just being out of it (news). Why the youngsters would want to be part of a tv show like MTV Roadies instead of being part of some multi national company because the platform gives them a lot of publicity and they are marketed so well for all the abuse, politics, crap and nuisance as compared to a well respected mnc job. Its simple somehow your visibility to the world, be it of wrong reasons markets you as a Brand and there is always a pool of people for which you were the wrong person but for others you were the correct one. Hence, you have the good support always.

So, just market yourself. Dont Worry if its bad sometimes I m sure with the world of discreet ideas you will find your own supporters.
The most important thing: ALWAYS BE IN THE LIMELIGHT.