Risk is always part of any business, hence it is always considered good to keep the numbers in mind before making decisions. PR and Advertising for a brand is essential part of Marketing mix and one of the very unpredictable part too. ROI in promotional practices is very uncertain, though lot of tools and techniques are brought in to get certain figures but most of these are assumptions. For e.g: The AC Nielsen-Kantar product uses the TAM peoplemeters to measure and predict the TV viewership in India. The survey involves approx. 9,000 peoplemeters in different areas of India that track the activities of these viewers with peoplemeters. But, for a country with a population of 1.2 Billion+, which might also be more than 1/6th of the world, is this a right sample? The research provider might have their own logic and facts to prove it, but practically it does not seem viable to predict behavior with one sample to One hundred and forty thousand people.
This becomes even more complex with assumptions such as one Newspaper may have four readers and thus pricing is dependent on these assumptions. It is just wonderful how still Big brands put their money in these damn expensive ads, some even without media planning. The question here is certainly not about the recall value of ads on television or newspapers, the question is ROI, because these ads might be so expensive that they can inflate your product’s price by worrisome numbers, especially because it is a tough decision when to advertise and how much to advertise.
Kyle Bagwell in his paper The Economic Analysis of Advertising (Department of Economics, Columbia University , New York, NY 10027, August 2005) mentions that, ” advertising of one firm may steal the business and thus diminish the profit of another. This business-stealing externality raises the possibility that advertising may be excessive. In multi-firm markets, it is thus unclear, a priori, whether advertising is inadequate, excessive or optimal.”
This is where we talk about the Digital Mediums. The decision making in traditional medium suffers because of extrapolated figures. The digital analytics provide you right figures and ppc (pay per click) option avoids your payment for visibility, visibility their can be considered free, while if somebody shows interest to the ads, and clicks on them, then only they cost you something. Not only this, you do not have to wait for another expensive research and plan to analyse the OOH space or Spots on TV/Radio etc. you can target your audience according to gender, age, interest and what not! And the surety is quite better than the traditional mediums. Nitin Prajanpe, CEO and MD, Hindustan Unilever on a media conclave in 2011 expressed his evolved thoughts about how big digital could potentially get, in India, He mentioned that in the US, TV was still a lot bigger, but in the UK, digital had become bigger than TV, in media spend. Could such a scenario occur in India as well, he wondered?
To be continued… keep posted
A Thought Blog - By Prateek Devta 