Mumbai: Advertisers are turning increasingly to direct marketing to communicate with consumers as they attempt to save on costs and ride out the economic downturn, a business opportunity that ad agencies are trying to tap.
UK-based Aegis Group Plc has tied up with independent agency Fresh IMCS and Dentsu India launched a unit in partnership with an outsourcer, Serco BPO Ltd, to offer direct marketing services.
Direct communications, with its arsenal of mailers, brochures, road shows, sampling, events, phone calls, emails and digital contacts, is favoured by advertisers as a cost-effective, measurable medium in these times, when companies are trying to cut costs.
It throws open direct lines of communication to consumers, who can interact with the brand or advertiser.
Media specialists such as Deepak Jayaram, national director, dialect, GroupM India Pvt. Ltd, estimate the one-on-one communications market at Rs1,000 crore-plus yearly, with likely annual growth of 15-20%.
The figure is significantly higher than a few years ago, he says, and does not include mom-and-pop direct agencies that operate from home.
“There is potential for agencies to get a lot more direct marketing business since much of it is spread out in small mom-and-pop outfits. It’s a disintegrated business,” says Debashis Das, country head of Carat Fresh, as the venture between Aegis Group and Fresh ICMS is known.
The medium will thrive in the years to come because it offers complete measurability—a company should know exactly how many people have been contacted and how many of them have opted for a product, he adds.
Below-the-line promotional techniques, which involve non-media communication such as group events, are also becoming important in the marketing mix of many companies.
Vandana Verma, country head of Celsius (integrated events and solutions), Mudra Group narates how it recently took on a below-the-line campaign for PepsiCo Holdings India Ltd for which the budgets topped Rs1.5 crore.
The company had a 350ml variant of Diet Pepsi called the Fat Can and wanted to launch a new can variant called the Slim Can. It enlisted Bollywoord actor John Abraham for the 20-day promotion in which he performed mass workouts with people in malls and multiplexes across Mumbai, New Delhi and Bangalore.
The event resulted in the beverage maker getting at least 40,000 calls asking about the mass workouts within the first 10 days of the campaign, says Verma. Still, it is advertisers with stretched budgets that are actually driving non-traditional marketing.
“Advertisers are re-negotiating ad budgets this year because of the economic downturn,” says Satish Sathyanarayana, chief operating officer of ClozR, the venture launched by Dentsu India with Serco BPO.
They are looking beyond creating awareness now and need engagement not just with consumers but also with intermediaries such as dealers and distributors, he says.
Personal care products maker Emami Ltd will be spending more money on direct marketing. “In these times, advertisers are looking to communicate directly to distributors and consumers about the benefits of their products. Also, you get the conversion numbers easily, if they are converting to a product,” says Aditya Agarwal, director, Emami Group.