Category Archives: Advertising

Pay For Content Or Watch Ads

AdvertorialAdvertorials – not everyone likes them. No. Not even if you call it branded content. But then are these “evil” and “misleading”? I don’t think so. As long as the intent is clearly mentioned in the header (the image alongside prominently shows that this is an “advertorial”) and the publication does not pass it off as journalism.

Yes it is an eye sore and maybe it treads on the thin line between editorial sanctity and commercialism, and one could argue that since the publication mentioned has a separate supplement for advertorials, why not place it there?

The reason is the tussle between revenue yield (that’s much, much higher on page 1), cost of publication and brand visibility.

But why do brands and publications do it? One is that mainstream newspapers are still growing in India and therefore the reach is unparalleled. Second, just like internet and radio you can target campaigns either for national dissemination or limit them to a geography Vs. television where there is a lot of leakage. Third, advertorials – the well-executed & well-written ones – work better than mere ads. This is because they are more informative and co-opt the readers mind rather than push a message. Fourth, if the space can be monetized, why not? After all, somebody’s got to pay the bills.

Let’s also take a look at some other factors. India is a very price sensitive market. Even now, most people would rather not pay for content (it’s been an uphill battle for TV & internet). So, if newspapers X or Y were to suddenly charge a realistic Rs 15 for the daily paper (leave alone the Sunday glossies), the elasticity would ensure that demand plummets overnight. In that scenario, the paper that prices lower would capture significant market share.

Hence, every publication is deeply discounted on subscription, and looks at selling ads all over to subsidise that cost. The same goes for TV news. When you are being armed with information that can help you execute trades worth millions, why should your TV news channel fees be a paltry Rs 11 or 12 per month? (check this TRAI pay channel a-la-carte rates)

So why shouldn’t a publication or channel not seek to monetize their inventory innovatively? After all, they are all for profit businesses – their business being to bring you information.

heatmapIn the online world, this transforms itself into what is called native ads, which nest in your regular feed, but are marked distinctively as being “advertorials” or “sponsored”. This is because however fantastic your banner ads or flash animations, reader studies have shown that eyeballs rarely register those ads. Look at the heat-map alongside showing banner blindness.

But why do fewer people raise a stink over these native ads? Maybe it is because they are more contextualised and individualised to a person’s taste and hence, one doesn’t deem it to be too much of interference. Also, creating multiple access parameters is easier online. Those who pay are not shown ads, those who don’t pay have to bear the ads.

But the bottomline is those who will not pay a fee for content will have to pay the content creators’ bills by watching ads.

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Only New; Not New & Improved

This is a short post – largely motivated by some questions that we are asking ourselves. How do we survive in an established market which already has so many service competitors? Is our strategy wrong or are we just not trying hard enough. Maybe we should figure out what clients want and then carve out a niche for ourselves, or maybe we should only go after a particular type of client? Or maybe we can invest a bit of time and effort to create long-lasting insights that open our clients’ eyes to the possibilities of tomorrow? Yes. That last one sounds like a plan. At least we won’t be creating a host of “me-too” offerings.

It’s important that we refrain from telling our customers what they need. In fact, we should open their eyes to things that they might need in the future. Do they know what could potentially disrupt their comfortable lives? Can we become their partner in future-proofing? At the very least, we would be doing a favour to both ourselves and our clients by creating new categories, instead of fighting for market share.

Market research is good. It spouts a lot of data, is exciting for the quants, but it comes with a bias. Customer feedback will mostly be about things that customers know about and hence, all their preferences & non-preferences will be constrained by their knowledge of needs. If one were to ask the average media consumer of the ’70s and ’80s, not many would have asked for the internet or a smartphone. Or maybe 150 years ago people would have voted for faster horse-carriages instead of a car.

Similarly brand communications also need to undergo a more forward looking change. Instead of increasing their messaging frequencies, brands should work to create a higher purpose of existence. Technology is on our side. There is great fragmentation of media. Brands can really get close to customers and create tailored conversations. Brands can afford to wean themselves from preachy/informing advertising and give the stakeholders something to talk about, engage them, co-opt them, titillate them and be their friend.

Social May Be Sexy, But Advertising Is Not Dead Yet

In my day-job, I identify and engage with organizations which are creating new conceptual businesses or redefining the market segment that they operate in. The end goal of this is to create a new leader / ‘superbrand’ in every category by virtue of investments in advertising.

However, therein lies the conundrum – is advertising alone enough to build a superbrand?

But first, let us be clear what a ‘superbrand’ is. Is it simply the brand that sells the most or advertises the most, has maximum recall? Or is it the one that sells the most without much advertising effort? Perhaps it’s the one that identifies an entire product or service category or maybe it’s merely the one that has been there, in your face, for the last dozens of years… Whatever it is – it could one or all or a mix of the parameters mentioned here – one thing is for sure; a superbrand is one that evokes a strong passion. It is a product or service that people flock to purely to see it, feel it, revel in its company, enrich their lives with it, and most of all spend a moment of their lives living it.

We are talking of winner take all markets. And these may not typically be built on the basis of advertising alone. The reason being advertising or any other above-the-line activity is practically a one-way street. You really don’t create the network externalities that are required for either mass adoption or mass reverence. The problem with depending solely on advertising is that after a point it creates dissonance. Unless a clever creative breaks the clutter, advertising alone can rarely cultivate large scale & long-term loyalty.

But yes, when you are setting out to creating a brand (with the ultimate goal of getting to be a superbrand) advertising is definitely an effective tool to encourage trials, inform people, and many of the other attendant benefits that we have all learnt in school.

However, one aspect holds true – access to deep pockets to fund high frequency & high impact advertising does create competitive barriers. It also causes competition to step up on the ad pedal themselves. But if you are the entrant with the deep pockets, you need to first sort keep your supply side geared up for bursts of new trials, you need to prime your communication to keep evolving as and when newer entrants take to the battlefield and you need build a strong dream for your stakeholders to buy in – both consumers and investors.

So yes, while many branding gurus will debate till the cows come home about the virtues of advertising vis-à-vis going social, I would say just one thing – one does not come at the cost of the other. If you are already higher up in the “branding curve”, I would say, by all means try other cost effective and viral methods of staying relevant because the marginal utility of above-the-line advertising would be very low. However, if you are an ambitious organization still in the commodity or quasi-brand level, you should perhaps start with advertising and habituate people into communicating with you on a daily basis.

What’s your view?