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THE LUCRATIVE E-COMMERCE BUSINESS IS NO START-UP

E-commerce is the new members of India E-commerce Inc. Some people loosely bracket us as 'startups' till they hear about the amount of money they've raised. To give you an idea, venture capitalists of all kinds invested $ 5 billion in Indian startups last year. They've already clocked $ 1.7 billion (that's over Rs 10 Arab) in the first quarter of 2015. Now, for the numbers that concern you — they intend to spend over Rs 3,500 crore on advertising this year. With major spenders tightening their purse strings across categories, they're essentially keeping the AdEx afloat if media agency reports are to be believed.           

Most of ad-agency feel that "managing e-commerce space is no different from managing brands in many new categories that have emerged in the last decade. Ad-agency argue that every client is different and requires differential treatment. But e-comm clients require a change in mindset, a reorientation, maybe a total reinvention.

Five year plan vs Five Generation plan

Unlike an HUL that may have a five generation horizon, e-commerce work on the B-O-T principle (Build-Operate-Transfer). E-comm clients want to scale fast, win fast (Like a Freecharge); or lose fast (Too many to name) and start something else. It's like coming up with a digital strategy for traditional client, ad-agency contest.

E-commerce clients are dumb

Stage Of campaign

Traditional Brands

E - comm Brands

Brief to Idea

1 Week

1 day, mostly

Idea to Execution

3-5 weeks

1-3 weeks

Testing Testing1.2...3

2 weeks

Ain’t nobody got time for that

Calculating RoI

Monthly sales report

Real time data

Easy there. E-comm clients are pack of extremely intelligent people; nobody puts billions in their ventures on a whim. But when it comes to advertising industry, yes, they are dumb. Here's a note to the agencies who didn't win any of their accounts: Ad-agency pitches were too cut and dry. Ad-agencies must be a winner with the marketing pros but e-comm techies don't get them unless ad-agency simplify terms like GRPs to e-comm.

Don't care about GRPs

Numbers on reach and frequency don't make a dent in e-comm client lives. It doesn't matter if his ad got terrific GRPs if that didn't translate into an increase in app downloads. CarDekho mobile app was launched last June. It would get 2000 downloads per day till September, which is when they started advertising on mass media. "In the first week of the campaign launch, the downloads went up to 15000 per day,” In six weeks, they'd registered 2, 50,000 downloads. "Basis these numbers, they stopped advertising on Facebook for a while and spent money only on TV," Agencies are just not used to talking about Numbers.

 

Don't care as much about brand building

 

Network Agency

Can handle large scale of work

Too many brands to look at, so chance of getting a step-child treatment after a point a are high

 

 

Independent Agency

Who better than an entrepreneur to understand another entrepreneur’s challenges

CMOs more comfortable working with network agencies

If the founder is not involved in any project, it shows in the quality of the work

Because in e-comm space, CMO of Quikr, says, "Consumers are becoming increasingly less loyal to one brand." Think of the last time you took an Ola because Uber wasn't available for another 20 minutes. So we want campaigns with a strong CTA (call-to-action) plan and less of brand-building spiel. E-comm client don't want long form ads. They want more spots in this reduced ad inventory scenario. Six week campaign days are long gone. Agencies, are not used to participating in the performance of the ads that they make or sell. About time they changed that. And if they don't, know that.

We don't believe in everlastingness

Remember, E-comm client think of the 5-year-exit plan minutes after they conceive the idea of their business. If ad-agency ideas don't make that happen, they'll leave and find another agency. Better still, they'll build in-house creative/media units, like Zomato has. Also, give the pace that they're moving at, having an in-house team drastically cuts down the turnaround time from ideation to execution, and gives them the freedom to iterate quickly and get the work out.