Of Eggs, Chickens and waiting to hatch or lay them

Digital Media Outlook 2009, a report on digital media industry based on a survey of top advertisers in India has the following findings:

  • Traditional media spend has dropped by 10% while digital media spend increased by 44% (base is smaller, but still !)
  • Big advertisers including consumer goods companies are still skeptical about usefulness of digital media, largely due to it’s limited reach … 4.2% penetration level compared to 50% in TV and 20% in print
  • Just 5% of total ad pie is allocated to Internet advertising
  • Of the digital marketing spend, a quarter goes to developing/maintaining a brand specific web site
  • FMCG, Consumer Utilities and Consumer Durables is just 30% of online ad expenditure … though they are 70% of total ad spending
  • Online medium is believed to be most effective for “driving traffic to a website” and adept as other mediums in terms of delivering “awareness” and “consideration”.  It is considered least effective for delivering promotions and driving traffic to stores
  • Rationale for picking Internet as a medium continues to be a “platform for direct marketing” rather than a medium for “mass communication or brand building”

To read the full report visit livemint.com/digitaloutlook.htm

Dilbert.com

Fascinating to read this. Not that the results are surprising. But, it always puts things in perspective to get a fix on numbers. It is obvious that there are a lots of chicks waiting for the eggs to hatch and a lots of eggs waiting for the chicken to lay them.

I am congenitally wired to ignore current reality and look at what it should be. That’s how good things have always worked out for me in the past.

When people say that it “only works well to generate visitors to a site” … I see an egg waiting for a chicken (read more web sites that sell !!). When businesses say we only spend 5% because penetration is low … that’s another chicken waiting to lay more eggs (read ad budgets). When some one complains that online medium is least effective in “driving store sales” or “delivering promotions” … I see an egg waiting to burst into a chicken (read Discount Coupons, Mobile Coupons).

All this means is … it will take more time to gain scale and traction … but the pace of growth is accelerating. The cliched question is not “What or Whether” but “When”. Nothing wrong that.

So ask yourself for your business (if you bet or are betting on the growth of digital medium in India) … are you prepared to wait it out? 3 Years? 5 Years? Are your assumptions (for growth, revenue etc. etc.) inline with the current pace of growth.


Views expressed are solely personal opinions of the author; and do not represent the views organizations/institutions he is associated in any form. The author has no responsibility for actions taken based on ideas expressed here. (Sridhar Turaga’s Blog: An Indian Entrepreuner)

Last man standing ….

I was driving back home a little late last week. It was 10:45 in the night … and all stores on 24th Main, where we live, were closed.

Well, not all !!

Balaji Medical stores our local store here was open. Actually they are the first to open and last to close in our area. I started wondering why the Medi Plus nearby is closed?

Ask any on in HSR Sector 2 and they will say Balaji always has all the medicines you need. If they don’t they will get it for u by end of day. They deliver home, even if it is one syrup ! And, Balaji is always open.

Come to think of it there is a story to tell in this. It is the small entepreneurial stores like Balaji Medical Stores that thrive, while the large chains struggle. In our own area this is true with MK Ahmed, which no one could beat … none of the large chains. Walk into most of the large chains in our area. Their stocks are ready to expire. The store managers are invisible and always busy updating their computers or complaining the computers don’t work. The staff never makes eye contact and is always busily moving around the store hiding in the aisles. Of course, they never recognise you how many ever times u visit.

There is something ironical here. The large chains were supposed to wipe out the “kirana stores” and “one location mom&pop” stores. Their superior inventory management, vast stocks, trained staff and computerized systems were supposed to leave the small ones in the dust. In our own area it’s the proprietary stores that own most of the business still.

I guess running a retail business is one store at a time and needs people who want to sell. It needs an inherent understanding of what people buy, rather than just report reading skills … no system can give u an instinct for what is popular. Needs skin in the game and an entreprenurial spirit to stay in the store engaged and sell. That’s where most of the retail chains struggle. To build the spirit. To build the model where each store manager runs it like it’s his own Balaji Medical Stores. This is even harder when they kept opening new stores hru the boom time … without having a strong core that can be replicated or scaled.

No wonder Balaji Medical Stores is thriving … while two large chains have wound up operations.

Let the last (wo)man standing standing thrive !!


Views expressed are solely personal opinions of the author; and do not represent the views organizations/institutions he is associated in any form. The author has no responsibility for actions taken based on ideas expressed here. (Sridhar Turaga’s Blog: An Indian Entrepreuner)