29 March, 2008

What about ecommerce in India?

So then I have been around for about two months now and I have a laptop full of presentations made to CEOs, Marketing heads, product veeps and so on... I have met quite a few people in the internet space - actually the people I have met are more from a marketing background and less from an internet marketing background.
This is a good thing for those in the business of knowledge arbitrage. But is it?
I think that it is best if a company which can spend Rs. 50 crores on online marketing spends it. It does not matter if Envigo - online marketing par excellence gets a share of this money or not. This seems counter-intuitive, but it is not so. The reason is this - A big corporation (or a small firm with VC money to burn) will spend this kind of money only when it sees positive, sustainable and reliable returns. It will adapt its systems and delivery mechanisms to deal with such kind of additional volume. Apart from the marketing funds, such money would also drive further investment within the company. In other words, it is not easy to deal with 100% more bookings overnight. So, the investment and the effort behind it will mean that the company is going to stay in the online arena. Even if Envigo does not get to see the money directly, eventually the benefits will trickle down. The benefits will be in the form of greater acceptance of this media and a general willingness to try this out. It will also be in the form of competitors lining up to replicate such successes. It will mean a gradual reallocation of funds towards online channels - for the firm and for the industries in which the firm operates. That is how it begins to start looking rosy for Envigo.
A lower ROI - because of sub-standard agency work or simply because of cleverly negotiated contracts does not help anyone except for the agency negotiating such contracts. And such joy tends to be short-lived. This is because the client will wisen up, with agencies not eating such low hanging fruits more than eager to educate the client .
This is why a great team of people, who may be in different online marketing shops, delivering exceptional results in a consistent fashion is what is needed. The online marketing pot is supposed to grow and grow - read this. It needs to grow faster. Such a team will generate that confidence and make client pockets deeper.
The good news is that in a lot of firms, the internet is the next big source of customers. This is because the customer is increasingly adept on this medium and she demands and expects to engage with her basket of brands on the internet. Things are very unorganised - Where to drive traffic from, how to measure returns, which channels to use and how much to pay an agency - but such things are a necessary companion of early stage growth. (For example, when the railroads were growing in the US in the 1800s, there was a time where you had to change your train 8 times between Philadelphia and Charleston - a distance of about 800 miles - because of different rail gauges).
In such a scenario, with rapid growth, unorganised service providers and service seekers, what should a marketing agency try to do to become bigger and better?
Not surprisingly, the same factors would help an agency which would help any other company, say in manufacturing. What is key - Motivation, Innovation and Agility. Self-driven employees who strive for personal improvement and client satisfaction, an open culture which supports cooperation and fosters innovation and an overall nimbleness in the way work flows in the organisation to deliver client requirements on time and show results.
Growth, in my opinion, will be delivered not by superstar business development (sadly, this is my current job at Envigo) but by a robust sales funnel and client management - all supported by well designed processes.
Processes are the oxygen at Envigo today. After closing the first round of business development, we are now taking stock of what went right and wrong and are writing out what to do next time around.
All the best to us!

18 March, 2008

What is online marketing?

Every few days, I meet someone and have to explain what I do for a living and it gets a bit irritating because very few people seem to get it.

a1: so what do you to?
a2: I work in an online marketing agency.

a1: (blank)
a2: Well we advise clients on how to spend money online...

a1: (Eating something and looking away)
a2: It is like how a regular marketing agency works - Suppose a company has a million dollars and wanted to spend it in selling more soap. They would go to a marketing agency and ask them for a media plan. The marketing agency would tell them how to market their soap, which TV channel and programs to use for advertising and how much to spend where. An online marketing agency that for an online audience, with a website owner as a client and online audiences as a target audience.

a1: so you are selling soap online? (between mouthfuls)
a2: we can help a client sell whatever he wants to

a1: Hmmm. So what do you do then?
a2: (imaging a car crash in slow motion) grr.,..

I get to play a2 about 50 times a month.
Below is an answer with the eloquence it deserves.

Online Marketing is a set of activities undertaken on behalf of a client or an employer to:
1) help drive online actions
2) in the most cost effective manner and
3) to track and report online actions.

Online actions could vary from a Purchase, Lead generation, email quote request or just viewing a website or a banner.

Cost effectiveness would mean:
3) What was the cost of buying traffic from this specific traffic source (How much did the click cost?)
4) How much did it cost for a given source to drive an online action. Remember that traffic is not bought for traffic's sake (not any more) but for driving a particular online action.
5) How much money was made as a result of this online action? (what was the value of the sale which happened?).
6) If 5) is greater than 4), then we turn up the knob for the given traffic source. If not, the knob is dialled down.

To make every one a bit more calm, there needs to be a system of accurate tracking and reporting:
7) Such reporting would provide data for questions 1 to 5.
8) it would also help us do 7) for every single link, website and campaign.
This set is the set of things an online marketeer does. It has a certain deterministic appeal to it. It also has a real world uncertainty about it. Every campaign shows a diminishing marginal return after a point. Every campaign has an elasticity - price, volume, conversion all change. Thankfuly, every campaign has its own predictability as well.

The interface with the client involves providing answers for the following questions:

1. Which set of online mediums/websites to be used?
2. How much to spend on each such website?
3. Which kind of commercial arrangements to be set up - Pay per click, pay per view, pay per action and so on...
4. Which creative formats to use?
and 5. How to track and run reports so as to measure what is going on?

What makes a good online marketer:
- To understand the nuances of reporting systems
- To have a good eye for detail
- To be a natural flair for analytics
- To be able to work in a team

This, in a nutshell, is online marketing. This is what we do!