Thursday, August 02, 2007

State of Internet Marketing In India

The time has come," the Walrus said, "To talk of many things: Of shoes--and ships--and sealing-wax-- Of cabbages--and kings-- And why the sea is boiling hot-- And whether pigs have wings."

Some recent events in Indian Consumer internet market .
  • launched a "Search and Win " challenge where they are trying to lure user in to using their search engine by giving iPod , Pulsar and holiday package.
  • A virtually unknown company called mGinger, created a lot of news by offering Money to customer for reading SMS advertisements on their mobile phone .
  • MIH ,a Gurgaon based startup launched IbQash and Great Indian Blogger Hunt , a contest to promote their blogging service. They plan to give cash reward to user.
  • appoint student representative in major colleges in india and abroad and pay them to bring user to signup .
  • 's dubious plan of offering $5 Million over 40 year .[ i seriously think byindia guys are smoking dope] .
Not enough ?? well there is mgarlic ,algoco,sms2india etc etc .All trying hard to out bid each other by giving money to user .

What on earth is happening ?? why suddenly everyone in Indian internet space is desperate to "Buy " users ? and why they are not giving a damn about ensuring user's "Buy in " for their application . I am no expert in Online marketing but still i think that this is internet marketing at its worst . you are already giving something for free to user now on top if this you are offering them bounty to use the application . Its true that all these bounties and prize money can attract some users . but i think no startup in world wants that type of users . those who are on your web page only till you are giving the money away . The moment your cash reserve is finished they move on to next sucker in line.

No Matter who fund you or how much they fund you , you will eventually run out of cash .
But still this is being done why ??
Poor Marketing :
Not content to slink off the stage without some revenge , this sullen and resentful crew of failed startup cast among them self to find a scapegoat and whom do they light upon ? with unfailing consistency and unerring accuracy all fingers point to - The Vice President of Marketing . its marketing's fault .Oracle outmarketed Sybase . Cisco outmarketed Bay, Intel outmarketed Motorola .We too have been outmarketed by our competitor .

Firing is too good for this monster .Hang him .

If you ask people in HiTech about the reasons why software companies ,specially startups fails ? than Marketing will be on top of it . Marketeers are blamed so many time that it becomes a fact of nature . but this is only one side of story . surprisingly most of the conversation ends there and we start whining about incompetency of marketing team without further realizing why ?? Is there a reason for it or is this so called incompetency is intrinsic to the profession of Marketing . i don't think so .
While there are many factor like lack of supporting environment within the organization , pressure from VCs, Half cooked Technology, Market crash and of course Intrinsic Incompetence of some people , which may lead to a fail startup but I think there are two main reason for marketing 's failure here .
  1. Marketeers are operating under a wrong set of assumptions
  2. Most of the Marketers are not right guys for the job .
I am giving more importance to these two reasons because most of the time these reasons goes unnoticed .Teams are oblivious to them . Lets examine them one by one .

Operating under wrong set of assumptions :

Problem with marketing is that it follows or rather forced to follow something called

"Market Research " .

Market Research give them numbers ,estimation , usage pattern ,segmentation,purchasing power ,Life expectancy and sexual health of prospective users [you name it and Market research will give you that ] . All marketing plans are supposed to operate within that premises . When it comes to Online consumer market specially in India ,Market research is little more than a WooDo Art or Witch Craft . Often i come across studies which consider Ringtone download as Mobile internet usage and Job hunting as a way to ensure loyal and ongoing relationship with your users . Till date i didn't come across a report which takes in to the consideration the fact that most of the internet usage in India is through Cybercafe . user reaction or behavior @ Cyber Cafe is a function of lot of things, how many folks are sharing the bandwidth ,privacy, whether the right pluggins are installed in browser or not , how much do they charge per hour, annoyance of registration . These are some real constraints under which an Indian internet user operate . how many times these factor are considered ? not much . what we see is a number.Indian broadband subscriber base is XYZ Million . does that gives you any real insight ? i doubt .

Another sore point is that MR fails to capture and estimate is that how far a user can go to adopt when value offered is good enough . when i started using internet in early 90's i used to pay 100/Hr for a dial up connection with 6 PCs sharing the bandwidth and i used to pre-compose the email messages on Floppy disk . I never read an article on line i used to take backup and read it in college lab . In US a lot of old people learned to work on computer and internet so that they can use Ebay . In India a lot of folks bought high end phone and enabled MMS functionality when there was DPS MMS case . I seriously doubt if any market research or study could have predicted it . even in mature categories like FMCG Market research has failed badly to predict the user acceptance of any new product Think of Vanilla Coke , research said it will be a big hit in India and Aeron chairs market research predicted that its destined to fail .

I request these Market research guys to please move out of their Focus groups/ survey questionnaire and spend some time on road . Its not hard to see the hunger for meaning full internet and hi tech product . look at the way online marriage portal and Chat rooms are going great in India [ ever been to Delhi global chat room on Yahoo ??] but dating sites fails terribly in providing the solution . look at the usage of Reliance's R World Mobile Data service portal , R World usage is very high if you consider the profile of average reliance phone user . i think no one can deny the potential here .

Indians are hungry for more application . these are just few of the example . i can list 5-10 more cases. the point i want to make is that Market research is just like a map and these symptom are like actual road . when there is a difference between road and map i think we should choose road . but sadly most of the guys choose to follow the map . go figure .

Marketers are not right guys for the job :

[caveat : this is my personal opinion based on my observation .this is no golden rule i agree there are exception and i know few of them ]

Sometime back i read that HDFC has made a conscious choice of hiring Fresh graduate from Level B Business school only . Why ?? their idea was that ,since most of the students those Tier B colleges are from Middle class family they can connect to them more easily because they understand the value of House for their clients better than someone from Top grade B school . very insightful isn't it ?

I think that first and foremost requirement for a marketer is that he should be a common man to an uncommon degree .but look at the marketers in most of the tech startups [specially the one which are funded ] if you do a statistical study you will find out that more often than not the marketing guy is an high flyer ,fast talking person , who has been to Top school and read all the right books and speak latest bullshit.

Do you see them as a common man to uncommon degree? i don't think so .Not by any stretch of imagination . these guys are a social outcast [ in a positive and progressive manner ] and we give them the responsibility of running a social network .

Result ?? 100th MySpace and YouTube clone and these marketing campaign.

Point is that paradigm under which these guys live and operate is totally out of sync from the paradigm of their users . Mostly these guys are clueless and don't have insight to break new market ,they don't understand the pain point . for example DATING SITES . we all know that dating sites attracts the maximum amount of funding . we also know that dating sites sucks . there will always be room for one more dating site. why ? Because no one is addressing the basic problem with dating sites . May be no one in their team felt the frustration .

Another aspect of this problem is that wide spread assumption that Marketing is a generic function .Its not domain specific . thats why its very common to see an Ex FMCG Marketers or an Ex Advertisement Guy working with DOTCOM as Head of Marketing .what do these guys do ? they buy links and banner Ads ? they focus on distribution and revenue split . How many sugar water sales man world needs before they learn that Hi Tech is totally different ball game?

Marketing in online world is not like FMCG [ mostly Distribution and pricing ] or its not purely about Creative advertisement . it s not even about Desktop Era stuff [ Making better mouse traps ] . For the most part its about nurturing a Community,evangelism,PR and keep your user base captivated. Wonder how it can be done ?? Look at Signal Vs Noise by 37signals . Every startup should have a guy like Jason Fried .

Jason is not alone , look at Mark Zuckerberg Founder of Facebook .He looks and live like a college guy and his site is a SocNw of College . Look at Kevin Ross , Founder of Digg . He looks like your Typical Neighborhood Techie ,his site is a Tech news site .

You can find many such examples . In online world your spokesperson should inspire a sense of connection in your targeted community . your user should say " He is one of us" thats the key.

Thanks for reading a Long post .

Photo Courtesy : Eva Ekeblad


Ramjee said...

Pretty detailed analysis.
A few points from my side.
i) These campaigns based on giving money cannot survive and we are seeing it.

ii) Market research is very essential, but what matters is how one interprets these. You have rightly pointed out that one should have a holistic view and not just blame the marketing.

iii) What is needed is someone who understands the space and the need. Such a person irrespective of the back ground will do a great job and we have host of examples.
However what we see is me too kind of crowd which in the long run is bound to fail.

Any way Darwin's theory can be applied here, unless and until companies change to suit the surroundings and adapt accordingly they cannot survive.

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pank said...

hummmm...good analysis buddy!!!

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