DIGITAL MARKETING :

ORGANIZATION
AL
AND
MANAGEMENT
CHALLENGES
IN INDIA
A project report
submitted by ASHA
KAKOTI and PARUL
NIGAM PGDM(G) 2010-
2012
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CONTENTS
ABSTRACT 3

INTRODUCTION 3

WHAT IS DIGITAL MARKETING 4

DIGITAL MARKETING IN INDIA 6

CHALLENGES IN INDIA 8

POSSIBLE SOLUTIONS 12

CONCLUSION 14

BIBLIOGRAPHY 14

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ABSTRACT
This paper is based on the concept of Digital Marketing and the challenges
that come in the way of effective and proper implementation of it in India
owing to the demography of the country. With a substantial growth in the
number of digital consumers, digital marketing makes possible the shift from
traditional advertisement to direct marketing. However, a strategic path is
required to reach to the digital consumer.

INTRODUCTION
Consumer behavior has changed forever: Consumers are adopting digital content services
faster than previously anticipated, with varying levels of engagement. They are more digital-
savvy, willing to provide personal information in return for perceived value, and increasingly
ready for permission-based advertising. Digital formats such as social media, online video,
mobile communications, gaming and advanced TV enable companies to simultaneously
meet transactional and brand-building objectives.

Spending is moving from traditional advertising toward measurable, interactive marketing.

Combined with spending contraction in the new economic environment, this requires
smarter advertising, and doing more with less.

Therefore it is safe to say that:

Mass marketing alone is no longer viable. To reach increasingly fragmented

audiences requires approaches tailored for new platforms, new offerings and new
experiences.

Reaching the diverse segments requires niche offerings and context via approaches that are
tailored for new platforms, new offerings and, increasingly, new experiences. At a time when
advertisers need to do more with less, closer collaboration among advertisers, agencies and
content owners can reduce cost while constantly tuning campaigns to achieve desired
campaign outcomes

This poses a new challenge to the managers – How to adapt to the ever changing market
trends? They have to learn to adapt so as to pave way for new ideas and initiate planning

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based on these ideas. The emergence of technology and ever increasing popularity of
gadgets have given way to digital marketing.

With digital consumers increasingly in control of their media experience and advertisers
shifting their spend to more interactive, measurable formats, the company managers must
move beyond traditional advertising to combine granularity of targeting and measurement
with cross-platform integration. To adapt and succeed – especially in the current economic
environment – content owners, media distributors and agencies need to build a new set of
capabilities now: cross-platform innovation, greater insights, open collaboration and digital
processes.

WHAT IS DIGITAL MARKETING

Wikipedia.com defines Digital Marketing as “ the promoting of brands using all forms of
digital advertising. This now includes Television, Radio, Internet, mobile and any other form
of digital media.”

We can also redefine Digital Marketing as the practice of promoting products and services
using digital distribution channels to reach consumers in a timely, relevant, personal and
cost-effective manner.

Whilst digital marketing does include many of the techniques and practices contained within
the category of Internet Marketing, it extends beyond this by including other channels with
which to reach people that do not require the use of The Internet. The field of digital
marketing includes a whole host of elements such as mobile phones, Short Message
Service(sms), Multimedia Message Service(mms), display / banner ads and digital outdoor,
Social Bookmarking, sending a pre-recorded voice messages to a large set of phone
numbers at the time same.

Advertising industry participants can’t afford to emulate the music industry, whose
traditional players are expected to lose nearly 35 percent of value between 2003 and 2012,
with revenues for the period forecasted to drop from US$12 billion to US$8 billion. Such

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losses are largely attributed to digital migration: as traditional physical sales declined,
digital music sales rose 69 percent year-over-year from 2003 to 2007.
Although traditional players have suffered, the migration to digital music has benefited
many of those downstream in the industry. Among this group are manufacturers of digital
music players, wireless providers offering downloaded ringtones and ringbacks, concert
promoters and even innovative retailers that offer to set up and provide other services
related to consumers’ in-home entertainment experiences.

Nokia announced plans to promote N97 Mini (they have even slashed the price of N97 Mini)
using digital promotions and plans not to spend a single money on traditional media . Nokia
plans to spend upto Rs. 7 crores for digital marketing – and all of that in just 4 months (ad
networks ).In order to sell N97Mini, they have created getN97Mini.com and for selling N97,
they are promoting http://www.nokialms.com/GetN97/ (which is Nokia’s lead management
system).

In the following figure’s forecasts of the U.S market –digital, mobile and interactive formats
are clearly the key to overall industry growth going forward. Mature channels like print,
traditional direct marketing and TV have 2010 CAGR forecasts of low single digits, while the
combined growth forecast for interactive advertising formats, such as Internet, interactive
television promotions, mobile and in-game advertising, is over 20 percent.

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DIGITAL MARKETING IN INDIA

For India, lets start with the statistics : 40 million internet users in India or 3% of India’s
population represent around 55% of household buying budgets. However, compared to the
$100 million (Rs 400 crore) of digital marketing spend in India, print and TV ad spends are
way higher at Rs 17,000 crores, which is 40 times that of digital ad spends.

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Today, digital marketing in India can no longer be termed as 'niche' marketing, thanks
largely to the exponential growth in Indian mobile ownership and usage. There are now
around 450 million mobile subscribers in India and this number is growing exponentially, due
to the growth of mobile subscribers from rural India. India has the second largest mobile
phone subscriber base in the world after China. On average there are 10 million new
subscribers (source: TRAI report) added every month.

Industry overview

Mobile phones came into India around mid the 90's. Like the rest of the world, initially the
handsets and service costs were high, the infrastructure poor, and the phones bulky.
However the usage pattern evolved rapidly with consumers wanting more from their mobile
devices. Initially, just used as a communication device, it has now grown into a digital
convergence device -- music, games, videos, camera, internet, email, social media, etc., and
of course not to forget voice and SMS.

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Mobile marketing in India

While the online (internet) sibling of digital marketing has a marginal advantage of being
able to act as a 'mass' medium with rich interactive features that are 'seen' and 'felt', mobile
marketing has had to feed off the leftovers of the 'digital' advertising budget and as a
consequence, activity has been mostly limited to SMS and short code response programmes.

However there are some industries that have explored and exploited mobile marketing in
India to a large extent. One of the biggest advantages of mobile marketing is the instant
'call-to-action' that is possible, whether it is in form of polls, voting, promotional codes, or a
request to query. So far, this mechanism of using short codes for advertising campaigns
(especially for a demand-generation campaign) is seen to have some success. The SMS
polling for Indian Idol 3 (the Indian version of American Idol) garnered close to 70 million
SMS votes on the finalists' short codes. Vodafone Tuesdays, a mobile coupon activity, has
more than 10 million subscribers.

The other aspect is the one-to-one communication that is possible with mobile marketing.
This has helped companies use mobile platforms as part of their CRM program. Note: The
mobile phone is the most personal (and intrusive) media vehicle. It is often the core of CRM
programs but its application must be managed carefully for fear of over-use and spamming.

Value added services (VAS) are very BIG in India. They contribute close to 10 percent of total
telecom revenues, and the estimated CAGR by 2010 is around US2,744 million. With rich
feature enabled phones within the reach of many, most marketers are getting into branded
VAS offerings. This has resulted in many mobile offerings such as caller tunes, ringtones,
wallpapers, mobile skins/themes, and branded games.

The future trends in mobile marketing in India point towards location-based marketing, with
applications and features that will run on low-end bare-minimum enabled handhelds too. For
example, RouteGuru is a location-based services company focusing on mass market
consumer solutions. Some of the services are: landmark intelligent turn-by-turn directions
and auto/taxi fare finder service over SMS. MapmyIndia is another company that is offering
technology and content for location based apps, including local maps, directions, places of
interest, restaurants, etc.

Last but not least is the rise in M-commerce. With secure mobile payment gateways and
platforms in place, the marketplace is now ready for mobile marketing fulfilment. Market
estimates for M-commerce in India vary between US$60 million and US$75 million per year.
We are sure it is encouraging and will only grow from here, due to more secure payment

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gateways, increased use of 3G and credit cards, and integration of other services with
mobile service providers.

CHALLENGES FACED IN INDIA

However certain challenges have crept up in the system of digital or mobile marketing in
India-

• RURAL AREA PENETRATION

80% of Indian population is based in the rural areas where the internet connectivity is
limited owing to several reasons like lack of service providers, increased illiteracy
rates , geographical location etc. Here the strategy to be adopted cannot be same as
that strategy adopted in metropolitan markets. The language of communication too
cannot be the same for both of these diverse groups owing to reasons like high
illiteracy rate.

• TECHNOLOGY AWARENESS

Without even considering the rural areas where the technology awareness is very
low, we will come across many people even in the urban areas where the technology
awareness is low. There may be groups of customers who are using computers or
PDA s on a regular basis but are ignorant of the rapid advances of technology(net
banking, online shopping etc).

• ENGAGING THE CUSTOMER

An observation made by a media agency is that 16% of all Google ads served were
clicked through. But does clicking through an ad suggest that it had an impact on a
consumer’s purchase decision? Companies are in the habit of sending sms and mails
to all the people whose information is present in their database without even
researching the customer’s preferences. Thus, a student might receive mails quoting
prices of pilgrimage tours etc. the digital websites are flooded with advertisements of
different category of products each trying to grab a customer’s attention. Thus most
mails go into spam and are deleted before being read.

• DIVERSE CUSTOMER GROUPS

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The demography of the Indian market consists of different age groups each with their
own preferences. There are teenagers who are online game addicts, adults who try
out various employment websites, professionals, and also people who only know how
to make calls on a mobile etc.

Thus the companies have to research, filter the audience and then target the specific group
with their online mails and messages.

We did a survey ion our own capacities and asked people to fill out a Questionnaire with the
following questions-

1. Does your mobile phone provide you with internet access?

a. Yes

b. No

2. How many promotional messages do you receive in a day?

a. 0-5

b. 5-10

c. 10-15

d. More than 15

3. How many of these messages would you say were of any importance to you?

a. 0-5

b. 6-10

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c. More than 10

4. How many times do you pay attention to the ads while searching on google ?

a) Always

b) Often

c) Rarely

d) Never

5.. i. Do you have an account on facebook?

a) Yes

b) No

ii. If yes do you watch the ads on facebook?

a) Always

b) Often

c) Rarely

d) Never

6. How many promotional emails do you receive in a a day?

a. 0-5

b. 5-10

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c. 10-15

d. 15-20

7. Do you often delete messages or mails without looking at the content?

a) Always

b) Often

c) Rarely

d) Never

8. Do the ads on mails and through sms leave an impact on you?

a) Yes

b) No

c) Not really

9. Would you prefer to receive the mails and sms in local language?

a) Yes

b) No

10. Do you want companies to first ask your permission and then give promotional calls or
message?

a) Yes

b) No

This survey was carried out in the Delhi and NCR region. Here, we found that 90% of the
people felt the promotional messages and mails they were receiving were junk messages
and they most often deleted them without even opening the messages. 40% of the people

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preferred receiving messages in their local language rather than English. 85% of the people
wanted the companies to ask their permission before sending out promotional messages
one after the other.

POSSIBLE SOLUTIONS
The recommendations to overcome the challenge of customer filtration can be as follows:

Keep it simple

Whether it is a new car launch, selling life insurance, or promoting a Bollywood movie, SMS
short code still is the best way to go about it especially in a country like India where the
demography is so diverse. When anyone is planning an integrated communications
approach, an SMS short code has been found to increase the response rate. Sprite, from
Coca-Cola India, conducted a short code campaign for which they received close to 2 million
SMS responses in a period of three months. All the user had to do was SMS the unique
number printed on the inside of a Sprite bottle cap, and they stood to gain free talk time.

Diverse delivery mechanism

One of the biggest hurdles now (and more so in the immediate future) is that the growth of
mobile users is going to be from rural India, or people at the bottom of the socio-economic
class. Lower literacy levels amongst these groups suggest that mobile campaigns that are
text-based would only serve well to a few. As a marketing manager, if we are planning a
mobile campaign and the target audience is across the SEC classes, it is advisable that
diverse delivery mechanisms are explored. For example, rather than just a text SMS or
mobile video, an interactive voice response system (IVRS) can also be considered.

The new offerings

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Mobitisements: There are companies creating SMS applications/platforms and micro-

blogging platforms for mobile phones.

For example, the vendor Affle has an SMS platform that is used by more than 6.5 million
users. Upon download of the application, the user can get free themes, skins and smileys
that can be used while sending their SMSes. The advertiser has the opportunity to place his
banner ads, which can be linked to his WAP site. This ad is displayed as footer on the screen
while typing the message and in full screen when the SMS is being transmitted. Way2SMS,
another mobile vendor, targets the user through contextual SMS ads. Users do go for this
platform for the 'rich' features it offers, and that it breaks the monotony of sending a plain
text message.

Internet through mobile

Accessing the internet through mobile phones is now common practice, especially for people
who own high-end models. One can use similar targeting techniques for PC users, including
behavioral, transactional, sequential/re-targeting, location, device/platform and temporal.

Proper implementation of Permission Marketing-

Permission marketing is a term coined by Seth Godin used in marketing in general and e-
marketing specifically. This form of marketing requires that the prospective customer has
either given explicit permission for the marketer to send their promotional message (e.g. an
email or catalog request) or implicit permission (e.g. querying a search engine). This is a
more efficient use of their resources because the offers are only sent to people that are
actually interested in the product.

For example, they ask permission to send email newsletters to prospective customers. It is
mostly used by online marketers, notably email marketers and search marketers, as well as
certain direct marketers who send a catalog in response to a request.

In the United Kingdom, an opt-in is required for email marketing, under The Privacy and
Electronic Communication (EC Directive) Regulations 2003. This came into force on the 11
December 2003.

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Social mobile

If one were to observe the latest ads from mobile service providers and handset companies
in India, the common factor to all the ads is the social media factor (accessing Facebook,
Twitter, Orkut, etc.). As the social networking phenomenon in India takes on a bigger shape,
the networks and handset companies are offering these services by default to users. This
opens new advertising opportunities for us marketers. While these are early days, the new
vista is open for experimentation and innovation.

Several companies, such as Local.com, LinkedIn and Facebook , have announced that
they're getting into the local targeting game by offering geography-based advertising along
with the standard demographic or keyword targeting you'd expect.

Facebook.com, which recently launched a Japanese language version of the site, has grown
dramatically during the past year, gaining 213% to 538,000 visitors. A Hindi version of
Facebook is available and marketers can also use this as a powerful tool to target the rural
as well as urban audience.

CONCLUSION
To sum up, marketing managers have an increasing range of options in front of them for
reaching consumers through the mobile phone. With over 450 million mobiles users in India
and 40 million (and growing) Internet users in India the question is not "if we should", but
"what we should" be doing in the digital space.

Sources:

• Wikipedia.com

• Berman, Saul J., Bill Battino, Louisa Shipnuck and Andreas Neus. “The end of
advertising as we know it.”
IBM Institute for Business Value.

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• Whatis.com

• Permission Marketing-Seth Godin

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