Are CMOs ready for the digital revolution?

With increasing numbers of Indian consumers climbing on to the digital bandwagon, marketers in the country are eyeing this medium with a lot of interest. According to a report by The Boston Consulting Group "Digital India - From Buzz to Bucks - Capitalising on India's Digitally Influenced Consumers" the number of internet users in India is expected to nearly triple from 125 million in 2011 to 330 million by 2016. This growth is driven largely by cheaper mobile handsets and the spread of wireless data networks. As broadband becomes more readily available and mobile web gains speed and accessibility, the pace of digital engagement across a multitude of channels will only accelerate going forward. Although online purchases are just a small portion of commercial activity today, the internet's influence on purchase decisions and consumer behaviour is growing steadily. The preferences of Indian consumers are moulded by the product reviews and research they uncover online and this greatly impacts what they buy and why.

In the scenario described above, the customer appears to be forcing marketing's hand to adapt. However, marketers have a clear set of reasons to adopt digital marketing and bet big on the digital wave. These reasons are based on some of the main trends and characteristics of this space and include:

• Customer preference and digital dependency
• Cost-efficiency and effectiveness, which translates into better ROI
• Ability to better engage and activate audiences
• Social networking and gaming
• Size and appealing demographics of the internet population

By 2015, the digital advertising spend in Asia will comprise around 30 per cent of the total marketing spend. The top five areas where marketers are allocating these funds are website content; development and performance optimisation; e-mail marketing; search engine optimisation; social media community growth and engagement; and paid search.

Given its move up the budgetary hierarchy, digital marketing is becoming a boardroom-level conversation and marketers are under pressure to demonstrate a return on every dollar spent. This raises the crucial question of whether or not CMOs in India are ready for the big digital wave and the challenge of developing strategies for a rapidly evolving landscape. In a nutshell, are Indian marketers convinced there is hidden treasure in the digital field and committed to unearthing it?

If we refer to the Adobe-CMO Council APAC Digital Marketing Performance Dashboard 2013, the findings are encouraging, insofar as India is concerned. The study highlights how senior marketers from across the region are managing shifting digital marketing priorities and advancing digital strategies, analytics and customer-centric engagement. It also reveals uphill challenges in securing budget and buy-in from a still-sceptical senior management team, as well as in finding the right talent for key roles, both in-house and through agencies.

In the Indian context, digital marketing has seen tremendous progress in the last 12 months in terms of understanding, readiness and adoption. Hundred per cent of the marketers surveyed in India believe that digital marketing can create a competitive advantage for their company, help them create a more customer centric organisation, enable brand differentiation and build greater customer affinity and attachment. This is a major shift from 2012 when less than 20 per cent believed it could deliver on those aspects.

The percentage of marketers spending over 50 per cent of their budgets in digital marketing has also increased substantially; from 2 per cent in 2012 to 22 per cent in 2013.

Social media is increasingly becoming a priority for Indian marketers. This is supplemented by initiatives to improve paid search and online display advertising and a stronger focus on customer listening, feedback handling, and community building.

Though things have started to look better on the digital marketing front in India, the road ahead is still long and interspersed with challenges or opportunities, depending on how one wants to view them. Budget limitations often make it difficult to develop a comprehensive digital marketing strategy. In order to overcome this constraint, more and more marketers are attempting to present a solid business case when seeking funding. To this end, they extract customer data on digital media consumption preferences and patterns, analytics on effective customer lead generation and overall strategic assessments of potential business impact and contribution. Despite these focused efforts, a large percentage of marketers feel their current ability to measure the value and RoI of their digital marketing spend is only 'getting better' or still 'needs improvement.'

There is better organisational alignment in companies today and Indian marketers largely enjoy the support of senior executives. However, 40 per cent of respondents in the survey said that their digital marketing strategy is developed and executed from a global head office while 20 per cent indicated that it is localised and executed in the APAC and country levels. Clearly, there is an opportunity for Indian marketers to localise their digital marketing strategies for better results.

As the customer movement to digital cannot be disputed, the value of digital marketing needs to be fully recognised. Indian marketers must consider digital marketing a necessity, not a nice-to-have piece that merely supplements their core marketing strategy.

Umang Bedi
MD, South Asia, Adobe