Should online brands be advertising on television? If yes, when? This is a debate that gets stirred up whenever a young online brand starts becoming high profile on TV. Having been in the seat of a marketing decision-maker for a successful Internet company, this was a question we came across every year and the decisions we took whether we should be on TV or not was based on a simple analysis of where the source of our business was - in our case, where were the resumes coming from.
The mind started working the same logic when I saw the television advertisement of flipkart.com. As most of us know, Flipkart started out as an online book store but has now added new categories such as movies, mobiles, music, games, etc., to its product range. If we were to focus on Flipkart's book business (which I assume is still the biggest category for them), here's a simple representation of their source of business.
Given the above scenario, my marketing priority would be dependent on the size of the opportunity in each box and my own market status.
1. If I am a market leader and Box 'C' is a substantial opportunity and is bigger than Box 'B', my priority would be on Box 'C' followed by Box 'B'.
2. If I am a market leader (by far and not a marginal leader) and Box 'C' is a small opportunity, my priority would be to retain my current franchise while attempting to expand the market i.e., Box 'D'.
3. If I am not a market leader and Box 'C' is a substantial opportunity and is bigger than Box 'A', my priority would be on Box 'C' followed by Box 'A'.
4. If I am not a market leader and Box 'C' is a small opportunity, my priority would be to go after Box 'A' because that's where the volumes are. If one attempts the market expansion strategy (Box 'D') as a trailer brand, it would be counter-productive and the brand should be prepared to cede most of the expansion benefits to the market leader.
Today's online medium (personally, am a big fan of Google AdWords) with its rich social opportunities is ideally built to accomplish tasks in Box 'A', 'B' and 'C' highly efficiently. Box 'D' is an option that should be explored only when opportunities from the first three boxes have been fully leveraged.
Flipkart's current strategy seems to suggest that it's a market leader by far and that Box 'C' is a small opportunity. Hence, the need to go offline and attempt market expansion.
Flipkart should ask itself the following two questions.
1. Is it already much bigger than all its competition put together?
2. Are most Indians on the Internet already buying books online?
If the answer to the above two questions is "No", Flipkart's campaign foray into TV seems premature.
At the end of the day, the millions spent on TV should help the brand register a sizeable uptick in sales in the short term (I do not subscribe to the view that TV advertising brings in long term salience and need not necessarily result in higher sales during the campaign period. If I am spending money on TV, I better see higher sales on site. Else, either the creative or the media was a wrong choice!).
I personally like the experience of buying on Flipkart and I do hope the brand is seeing an upward graph in its sales during the campaign period attributable to its TV campaign. However, my personal view is that if the money spent on the TV campaign was spent on online marketing, it would have given the brand far bigger sales leverage. And this point has nothing to do with the quality of the campaign creative!
The mind started working the same logic when I saw the television advertisement of flipkart.com. As most of us know, Flipkart started out as an online book store but has now added new categories such as movies, mobiles, music, games, etc., to its product range. If we were to focus on Flipkart's book business (which I assume is still the biggest category for them), here's a simple representation of their source of business.
 |
| Representation of Flipkart's likely source of business |
1. If I am a market leader and Box 'C' is a substantial opportunity and is bigger than Box 'B', my priority would be on Box 'C' followed by Box 'B'.
2. If I am a market leader (by far and not a marginal leader) and Box 'C' is a small opportunity, my priority would be to retain my current franchise while attempting to expand the market i.e., Box 'D'.
3. If I am not a market leader and Box 'C' is a substantial opportunity and is bigger than Box 'A', my priority would be on Box 'C' followed by Box 'A'.
4. If I am not a market leader and Box 'C' is a small opportunity, my priority would be to go after Box 'A' because that's where the volumes are. If one attempts the market expansion strategy (Box 'D') as a trailer brand, it would be counter-productive and the brand should be prepared to cede most of the expansion benefits to the market leader.
Today's online medium (personally, am a big fan of Google AdWords) with its rich social opportunities is ideally built to accomplish tasks in Box 'A', 'B' and 'C' highly efficiently. Box 'D' is an option that should be explored only when opportunities from the first three boxes have been fully leveraged.
Flipkart's current strategy seems to suggest that it's a market leader by far and that Box 'C' is a small opportunity. Hence, the need to go offline and attempt market expansion.
Flipkart should ask itself the following two questions.
1. Is it already much bigger than all its competition put together?
2. Are most Indians on the Internet already buying books online?
If the answer to the above two questions is "No", Flipkart's campaign foray into TV seems premature.
At the end of the day, the millions spent on TV should help the brand register a sizeable uptick in sales in the short term (I do not subscribe to the view that TV advertising brings in long term salience and need not necessarily result in higher sales during the campaign period. If I am spending money on TV, I better see higher sales on site. Else, either the creative or the media was a wrong choice!).
I personally like the experience of buying on Flipkart and I do hope the brand is seeing an upward graph in its sales during the campaign period attributable to its TV campaign. However, my personal view is that if the money spent on the TV campaign was spent on online marketing, it would have given the brand far bigger sales leverage. And this point has nothing to do with the quality of the campaign creative!
Surprisingly many companies in India, especially the blossoming ones, relate “beginning of advertisements of their brand on TV” directly to the fact that “They have arrived!”. Although this belief might have some truth in it, its efficacy is highly contingent on the type and current size of the company. Also, sometimes when start-ups are coming of age they don’t have a strong vision which even the Marketing & Sales folks could relate to, to guide their decisions. These leads to- them, making some obvious and trite choices.
ReplyDeleteThanks Junaid. Many an Internet advertiser tends to think that their brand is just not 'visible' and possibly thinks that a TV campaign will give the brand a better profile. If only they look at the quality of visibility from the point of view of their end consumers!
ReplyDeleteFlipkart must be more keen on awareness and reach
ReplyDeleteFocusing on online marketing is the best strategy for boosting sales to the example target audience, in this case 'book lovers'.
ReplyDeleteFor one, buying a title online is the most convenient way these days, especially in 2 tier and 3 tiers towns where book shops are all but non existent. Even in larger towns and metros commuting is a big hassle. So, getting a book delivered in the comfort your own home is the best option.
Secondely, you can safely assume all book lovers are internet savvy and would not mind buying products online, though some psychological barriers do exist in India.
Thirdly, in case of a book there are very little chances of a sub standard product being delivered at your home.
However, when it comes to marketing a more widely used product of mass appeal, for instance a newly launched trendy cell phone, TV promotional may have some edge as the target audience is far more broad based and retail outlets all across the country are plenty.
Thanks Bob. The need to increase awareness and reach should be seen in the context of who you want to reach out to. When an Internet brand like flipkart advertised on TV, they talk to a large % of people who are not book lovers or those that are not Internet savvy. Hence, this part of the money is completely wasted - and you know that TV is expensive. While mass brick and mortar brands have to embrace TV, an Internet brand at the stage of lifecycle that flipkart is in, can spend more measurably on Marketing and get better bang for the buck, even without being on TV.
ReplyDeleteHi Dhruv,
ReplyDeleteYou've raised some very valid points and that diagram spells them out very nicely. I too feel the same way but perhaps the reason some e-commerce biggies have started using traditional media is to build brand (create awareness, brand recall etc) and not to increase their sales.
I feel most of these sits would also be working towards an IPO soon enough.
Thanks Mayank. But don't you think this is an expensive way of communicating with the investors? :-)
ReplyDeleteThe first time I saw the Flipkart ad was on some English movie channel, and I was really surprised when the ad aired three times per break. It was not exactly a small ad, so the endless repetition caused me to change channels every time the ad started.
ReplyDeleteI felt they could've done better in terms of ad positioning and perhaps a little less air time would've done better in capturing the attention of viewers (their newer ads are succinct and more to-the-point).
And yes of course, my first thought when I saw the ad was, "Wow, first Snapdeal, now Flipkart. Either they just got VC funding and are marketing aggressively, or they're reeeeally successful and can afford TV."
nice blog, i hope you will be continue to blogging and write article, somebody maybe like and interesting to read your article
ReplyDeletei have a blog, maybe you want to visit , thanks before :)
Download software gratis full version or Download software Terbaru gratis full version
Adobe After Effect CS6 Full version