Traditional advertising is like going on a date and not letting the other person talk
In an 'era-defining' deal, Amazon founder Jeff Bezos bought the iconic Washington Post, after it had had six consecutive years of declining revenues. As much as this deal highlights Bezos's vision, it also underscores a phenomenon of our times: Media and advertising companies are getting disrupted, changing forever.
The factors reshaping how brands and consumers connect-leading to this disruption-are also factors that, I believe, will alter the contours of the $100 billion Indian IT industry. For instance, this year, for the first time in history, the average US adult will spend more time online than on watching television. This shift in the media consumption pattern has driven corporations to increasingly move their advertising dollars to digital media, leading to the challenges that the Washington Post encountered.
Consider that in 2008, social media overtook porn as the number one activity on the web. As much as we use our social network to connect with friends and lead declarative lives, we increasingly draw on it to make purchase decisions. Today, a recommendation from a friend is seven times more effective at driving a product purchase than a newspaper advertisement. This has had profound implications on the role of consumers in shaping the brand story.
At the end of 2012, the number of connected devices on the planet surpassed the human population. This proliferation of mobile phones, tablets and interactive displays has changed how consumers access media. With the choice of multiple screens, the attention span of the consumer is now just a few seconds, with a growing tendency to scan and discard non-stimulating content. This has forced brands to rethink how to create immersive experiences that sustain consumer interest.
What is amazing about all this is not that technology has changed, but how much it has changed us. We have become more vocal, empowered and connected, seeking greater engagement with brands. The days of brands driving one-way communication by interrupting our favourite television programmes are getting over. As an ad executive recently said, traditional advertising is like going on a date and not letting the other person talk. Today customer engagement is the name of the game.
The cumulative impact of these changes has been massive for companies. Brands are struggling to cope with the shift from a small number of standardised communication mechanisms to several fractured and changing channels, devices and audience contexts, where a mistake can get shared with unprecedented speed and amplification. Expectedly, the organisation function undergoing the biggest change as a result is marketing.
Traditionally, marketing used to interact with consumers primarily through brand communication. Today, it has become imperative for the brand to deliver experiences consistent with its message. The risk of the consumer's version of the brand story making its way across the world and destroying the 'official' narrative within minutes is too large to live with.
Marketing, therefore, has started taking responsibility for the consumer experience-a huge increase in scope, especially given the explosion in consumer touchpoints.
Most chief marketing officers (CMOs) have responded to this with a mix of strategies:
• Forging a necessary, if tenuous, relationship with the chief information officer (CIO).
• Acquiring or buying technical skills, particularly in social, mobile and analytics.
• Investing in data capabilities, specifically the ability to analyse consumer behaviour and tailor experiences based on that insight.
• Driving consistent experience design across all consumer touchpoints.
The net result is that today the average CMO spends around 25 percent of her marketing budget on technology. Gartner, the research firm, predicts that by 2017, the CMO will buy more technology than the CIO. Given that traditionally CMOs have regarded technical orientation as one of their weakest capabilities, this is an extraordinary development fraught with opportunity and promise.
This represents both a challenge and an opportunity for the Indian IT industry. This year alone, our estimate puts the size of this opportunity at a staggering $400 billion.
The challenge comes from the fact that the country's IT muscle was developed to meet the needs of the CIO, whose big driver traditionally was to keep backend systems stable at a low cost. Indian IT companies became the best in the world by taking well-defined requirements of these large applications, shipping the work home, and getting them executed by large teams of engineers using set processes under expert supervision. The emphasis was on predictability and repeatability. This was largely done by driving standardisation and reducing variance in work, including defining the specifications upfront, thus limiting changes. While this allowed the companies to scale, it also put constraints on breakthrough thinking and innovation.
Finally, because these applications were far removed from the end-customer, it was more important for the software to meet the specifications than to look good. This resulted in us not developing world-class design skills.
Contrast this with what the CMO wants. Marketing applications are typically used for shaping consumer experiences and in support of marketing campaigns. Because campaigns have to be timed with external events like product launches, speed is often the most critical driver for marketers. They are more open to working with functionally imperfect software if it is effective in meeting their larger goal. Typically, these applications have a short shelf life and, therefore, do not need engineering sophistication. Marketers thrive on bringing new ideas rapidly to life for consumers, which results in fast changing requirements. And finally, they look for an understanding of consumer insight and brand personality, and an ability to weave both into the software interface design.
On the face of it, it almost sounds like the needs of the CMOs are antithetical to the capabilities of the Indian IT industry. While we need to acknowledge that this represents a departure in approach, orientation and culture from what we have designed, I believe this is a surmountable gap.
First, as an industry, we must come together and drive changes in the nature of skills our schools produce. Our talent-while among the smartest in the world-has limited understanding of design, limited appreciation of human insights, and a strong procedural orientation. We will need to change curriculum and help aspiring industry professionals learn to value design and creative thinking, and understand consumer behaviour.
Today, Indian IT is mostly synonymous with low cost, procedural work. We have to change this perception and build our reputation as a creative destination. Much of our procedural mindset comes from a culture of conformance and deference to hierarchy within organisations. But innovation by definition is a departure from the normal. Organisations will have to focus on changing their cultures-become more open, less hierarchical, allow for individual expression to flourish and contrarian perspectives to survive.
Finally, the government needs to make it easy for companies to source and fulfil digital marketing work. Like it had done in an earlier age, it needs to engage with the industry and provide both policy support and financial incentives.
I believe that with concerted effort, we can ensure that the Indian IT industry takes advantage of this massive opportunity and retains its pre-eminent position globally.
The author is managing director of Sapient India, and co-lead of Global Delivery for SapientNitro, one of the largest digital agencies of the world. He tweets @endowscopy
This article was first published in Forbes India
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