Think Transformation, Think Razorfish!

The following article is originally published in The Financial Express by Mr. Jaideep Mehta (MD, IDC India & South Asia)

New ways of consuming IT are emerging

Many analysts and observers cite 2015 as one of the most challenging years for the IT industry. Financial performance was challenged relative to historical numbers.

Many analysts and observers cite 2015 as one of the most challenging years for the IT industry. Financial performance was challenged relative to historical numbers. Large players are struggling to fire up growth, and margin maintenance is becoming a significant challenge. With some notable exceptions such as Mindtree, Tier 2 and small companies are more severely impacted on both counts. The forecast of 12-14% growth seems, sadly, unachievable: high single digits is probably a more realistic number. Talent retention is on the agenda like never before and top technologists decamp for the greener pastures of the booming start up world. Then, there are the markets: aside from the relatively bright demand in the USA, global markets range from slow to downright grim.
These are symptoms of a more problematic phenomenon. History will judge 2015 as the year when the traditional high profit, high growth model of the industry started being dismantled. 2016 will see an acceleration of this fundamental disruption. The key driver is the industrialisation of the technology sector, massively disruptive innovation, and the resultant emergence of new ways of consuming IT.

The digital transformation wave has pervaded corporations globally. The IDC Digital Transformation Maturityscape Index, built on more than 2500 assessments globally, shows that more than 60% of the companies are at Stage 2 or 3 on a 1-5 scale. Many are still struggling to get off the starting blocks, but realise it’s a game of survival. Practically every company we speak with, anywhere geographically and across vertical industries, is actively investing to understand and leverage digital technologies, processes and methods to drive superior business performance.

Consequently, in 2015, 120% of industry growth has been driven by these investments: traditional IT, though 70% of total spending, is shrinking by 4.5%. In other words, what the IT services industry is best at doing is in secular recession.

The challenge for the Indian companies is that these programmes are driven through high engagement and high iteration projects, which do not lend themselves to offshoring. So, the traditional advantage they brought to the table is substantially reduced. Organisations are building front-end or “on site” teams to be able to give clients the assurance of service, and to demonstrate capabilities.

As digital transformation starts with customer facing processes, the software underlying these programmes tends to be design-led. A capability that fundamentally does not exist in the engineer-dominated industry which failed to see the wave coming, and steadfastly ignored all leading indicators till it was too late. Now, it is collectively scrambling to buy this capability, often at premium prices and with post-acquisition integration challenges such as salesforce integration and enablement, cultural fits and margin dilution issues.

Finally, engaging clients on digital transformation initiatives demands depth of end-user industry knowledge and consulting capability which is rare: to partner with a bank on retail banking customer transformation programmes, for example, demands a depth of understanding of retail banking processes, customer preferences, channel migration issues and digital marketing disciplines which even the largest organisations find themselves challenged with. Consulting and domain teams are being invested in to overcome this challenge. Tuck in acquisitions buttress existing capability.

All in all, digital transformation programmes remain a challenging business for the industry to dominate. It has ceded ground to the likes of Accenture, Razorfish and others who are significantly outperforming the industry from a growth performance perspective.

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4 Mobile Marketing Strategies that would actually work in 2017

Year 2015, was perhaps the most important year in the mobile marketing industry, an year when mobile devices officially ended the 2 decade long dominance by desktops.

People around the globe settled down to a new “mobile way of life”.

Mobile is primary digital device for all demography segments

Source: BCG Center

Data from BCG study calling out loud and clear, that mobile devices are the primary digital device of all age and demography segments.

Over 53% of tier 1,2 & 3 use mobile as their primary device.

Google also acknowledged this fact in one of their PR releases pertaining to mobile vs desktop searches. Google’s search chief Amit Singhal said for the first time, more Google searches were completed on mobile devices than desktop computers.

All of this point us (the advertisers and marketers) in one single direction. We can, no longer continue to ignore mobile as a key channel in the marketing mix. However, there are several challenges (especially for the small & medium advertisers) when it comes to using Mobile effectively as a marketing channel.

Here are few mobile marketing tactics which are most logical and almost hygiene to make your digital marketing work in 2016.

#1 Mobile Marketing is most Social than ever before

Mobile vs Social Media in 2016

Source: WARC Asial Survey, 2015

77% of the marketers (also identified as one of the 2016 digital marketing trend in my previous blog post) said that mobile is used most frequently with paid social media marketing.

This data is also in sync with the the below numbers shared by Facebook Audience Insights, which says 122 Mn out of 132 Mn people access Facebook through  Mobile.

Facebook India Audience Data 2015-16

Facebook India Audience Data 2015-16

Clearly, this shows that your social strategy should go through a “Mobile First” prism in 2016. What that means really is when you design your social content or when you create your paid social marketing plan, do skew it more towards mobile audience.

#2 Mobile Marketing is more about native content and less about advertising

Mobile Content vs Mobile Advertising - Trends 2016

Source: WARC-MMA Survey Report, 2015

The current trend might be in favour (almost tilted) of paid social advertising as the key mobile tactic, but this will change soon and the trend is already visible. According to the WARC-MMA survey, mobile display advertising would lose its share by 2020 to Mobile Content (or native advertising).

Also Read : Reasons Why Mobile Native Advertising Beats Desktop Native Advertising 

Apple has already allowed ad blocker apps to run on its safari browser.  Though iPhone’s overall market share is limited, but this would still cause significance dent in the overall mobile display pie.

#3 Give your website a “Mobile First” makeover

Regardless of the type or stage of the brand, having a unique mobile first experience is something which would become a de-facto standard from here-on.

More so after the Mobilegedden update by Google.

In order to take better decision on your mobile first approach, also read “Mobile Web vs Mobile App

Responsive website might be thing of the past for many digital first brands in 2016 as they continue to chase and build deeper consumer experience using Mobile First Strategies.

#4 In-App would grow but Mobile Searches would remain the key performing channel

With the growing popularity of mobile apps, to which a lot of digital pundits would say it offers a superior user experience than conventional websites, start-ups tilted (almost shifted) their product and business models towards the app at the expense of desktop and mobile websites.

To add to this, many investors regarded the number of app downloads as one of the indicators of a start-up’s performance. Entrepreneurs and marketing heads rushed to blindly maximise their app downloads. Since then, tonnes of app marketing companies opened shop in Bangalore and Mumbai.

Soon, however, it was evident that they didn’t necessarily result in high growth.

Now, as apps lose their novelty and vanity both, and as smartphone users uninstall apps to clear up memory (uninstall rates are as high as 90% in some cases), these companies are revisiting their mobile web strategies.

The winner? Google, which retains its dominance of online ad spending.

Hence, digital brands should get a sharp focus on getting their mobile keywords strategy in 2016. Yes, there is a difference of “intent & location relevance” in the audience search list.

4 RTB Programmatic trends for 2017

RTB Programmatic trends have fascinated one and all in the advertising world. The pace at which they’ve grown in the last 3 years have stunned even the hardest of its critics.

Programmatic is projected to touch almost 80% of total US advertising ad-buy by 2017. The programmatic adoption is lowest in china which is projected to touch only 25% by 2017.

Global Programmatic Ad Buying Share

Global Programmatic Ad Buying Share

 

Right from the start of 2014, there is a never ending debate around RTB & Programmatic in the agency corridors, and it looks like in all probability, the advertising baton would be passed on from the conventional Ad Networks to Ad Exchanges & DSPs.

Before you proceed further, you may want to watch the below video by Pete Kluge to understand this increasingly complex Display Advertising ecosystem:

A lot of analysts are calling it a victory for the advertiser who (till recently) was shooting in the dark & a large portion of his dollars were going into the black hole.

No doubt, even the research figures are also skewed in the same direction, according to e-marketer latest report, by the end of 2017, RTB & Programmatic would jointly become $7-8 Billion market which would be 30% of the overall display market in the US.

In 2014 alone, US programmatic spends have clocked over $10 billion which is a clear sign that conventional networks have their task cut out.

RTB-Programmatic-Share-US-Display-Market

The very idea of being in control of what you buy & the transparency of what you pay for is a great motivation factor for any advertiser to pump in more marketing dollars. Till recently, the client had no visibility of where their precious dollars are being spent. All they were getting was bland click thru reports at the end of the month which was far away from the actual business transaction. The ad networks were not even remotely connected to the brand’s business objective.

How does RTB & Programmatic Work?

Agency trading desks have already started to add fuel to this fire by either partnering with the leading exchanges & DSPs or creating their own private RTB-cum-Programmatic marketplace to consolidate the digital buy for all their clients. According to a report by Adage, almost 15% of the brands are already working directly with leading DSPs & another 45% in the process of building their direct relationship with a DSP partner in the near future.

Media buyers are suddenly sitting in the driver’s seat where tools available to them are becoming increasingly sophisticated that covers deep analysis around user behavioural, demographic & psycho-graphic data. The DMPs ( Also watch: Top 5 Reasons to Have a Data Management Platform ) have added more arsenal to the DSP’s bucket by providing them multi-layered audience data points. The planner who was once busy crunching tons of excel data for his client is now having a last laugh. He can virtually run all his brand campaigns sitting inside his cubicle over a cup of hot Starbucks latte. This can also cut down huge resource costs for the media companies as single person would be able to manage entire digital account from his system.

But like they say, nothing comes for free, somebody has to pay the price for this, and it looks like that for now conventional ad networks will be in the line of fire from all corners due to lack of transparency in their DNA.

Here are key RTB Programmatic Trends for 2015:

Verticalisation of the RTB

Since the beginning of our use of data platforms for buying advertising inventory, one thing which has always become a point of debate around the world, and that is how can we apply data to content strategies that go beyond traditional “advertising” and help changing customer behaviour, eventually encouraging buying behaviour. This strategy & tactics should go well beyond boxing up of some large volume of inventory, to personalised solution workflows serving to the needs of specific industry verticals.

Galactic Rise of Programmatic Video

If programmatic ad trading was the success story of 2014, next year the industry will start to see the benefits programmatic video has to offer. Programmatic advertising has experienced stellar growth for the past few years and this is expected to continue – in 2011 global RTB-based spending was $1.4 billion and this is forecast to rise by almost 60% (59.2%) to $13.9 billion by 2016 (CMO.com). Programmatic video is expected to advance equally quickly with 40% of digital video ad spend predicted to come from programmatic by 2016 (source: e-marketer).

Personalisation vs Privacy

In 2014, user privacy & general data protection have received bulk of the attention of the global law enforcement agencies (read about Data Privacy Day ). Advertisers looking for re-assurance from the Ad Exchanges & DMPs that they are not compromising on user privacy compliance of a specific geo. Major industry players (Amazon, Facebook, Yahoo, Google, etc.) that own PII and niche players that specialise in “cross-device” will debate the scale, accuracy and privacy compliance of their IDs.

Multiscreen & Cross Device efficiencies

In 2014, we saw RTB’s & Programmatic began their conversations to a lot companies in global mainstream media and new products and technologies to launch in this space over the next 12 months.

As we respond to mobile’s ability to reach consumers at unique times in unique places we will begin to see developments into how we can reach customers across multiple screens. 2015 may just be the year when Programmatic would bring its efficiencies & returns to large advertisers by allowing them to manage their entire digital media spend across platforms.

 

8 Digital Trends to keep in sharp focus for 2016

Today is the first working day in this calendar year, and if you are a digital marketing professional or entrepreneur, year 2016 holds some great opportunities for you and your organisation.

So whether you are a planner in some digital agency or leading the marketing for some e-startup. Here are some of the key digital and marketing trends to keep in mind before you start your work in 2016:

Trend # 1 – Good News! Digital is poised to surge ahead in 2016 as well

Trend - Digital growth in 2016

Source: FICCI-KPMG, Media Industry Report 2015

The growth in popularity of digital media continued to surge in 2015-16, with a significant growth in digital advertising of 44% due to emergence of ecommerce startups as a significant new category.

Trend # 2 – Mobile Internet is growing, but…

Growth of Mobile Internet 2016

Source: KPMG, India Digital Report, 2015

Smartphones vs Featured Phones Trend 2016

Source : IDC Asia Pacific Quarterly Report on Mobile

While the growth is happening in the mobile Internet users, majority of that growth is coming through the feature phones.

Trend 3 – Growth lies in Non urban towns

Urban vs Non Urban Towns - Online Trends

Source: GWI (Global Web Indiex), 2015

Currently, 80% of the Internet traffic comes from Top 14 cities in India. But this will change very shortly. With schemes like Digital India, there is a huge possibility that the digital divide would disappear in the near future. Is your brand ready for the next 1 billion digital customers?

Trend 4 – Content becomes king as display loses significance in Mobile

Mobile Content vs Mobile Advertising - Trends 2016

Source: WARC-MMA Survey Report, 2015

There is little difference between the most favoured mobile channels in India and the rest of the region, with display (including in-app) advertising the most common today

Display advertising is also expected to lose some significance over this period, falling from 69% adoption in India today to 52% in five years, although it will still be the most-used channel.

Content, including native and ‘advertorial’, is expected to see adoption rates rise strongly over the coming years.

Trend 5 – Search + Social would continue to dominate digital media

Top 10 Digital Media Marketing Channels 2016

Source : Comscore Media Metrix , Oct 2015

Google display, mail, horizontals & and social are dominating the display landscape for sometime. The trend would continue in 2016, in fact this could be the year when the pace of social media growth might surpass search in absolute terms.

Trend 6 – Mobile vs Desktop

Mobile traffic has already witnessed a huge surge. In 2015, Google finally stated that mobile traffic surpassed desktop traffic in ten countries. The search engine giant also introduced the Mobilegeddon algorithm update in order to level down websites not optimised for mobile devices. However, you are not required to have a desktop website optimised for mobile, as a mobile version of your website is just enough.

Trend 7 – Technology is dominating the online conversations

Topics of Online Conversations & Searches

Source: Global Web Index (India), 2015

Within the GlobalWebIndex survey, digital consumers are asked if they have recently talked or posted an opinion online about 30 different subjects and product categories. If we rank these in India, it is technology, which dominates – with areas like mobiles and computers coming out on top.

Trend 8 – Mobile strategy will constantly overlap with Social Strategy

Mobile vs Social Media in 2016

Source: WARC Asial Survey, 2015

Considering 70% of audience is consuming social media on mobile only, it won’t be incorrect to say that, in 2016, mobile strategy would continuously overlap with social strategy. This is something the digital planners must keep into consideration before building overall digital matrix.