‘Recession’s like a hockey stick, quick to fall, slow to build up’

Data analytics is an area savvy marketers would want to try, just to be sure of the value of every penny they spend. And why not? Testing times call for some bold marketing moves — it could be reducing focus on events, using more reach-delivering mediums, or simply quieting down a bit. Such moves need quantifiable proof — something data analytics provides, helping clients make better decisions, say the top brass of Ninah, a consulting firm owned by the Publicis Groupe, which is waiting for the right opportunity to set up shop in India.
David Nixon, managing director, Ninah USA, and Sebastian Shapiro, managing director, Ninah Consulting, talked to Arcopol Chaudhuri of DNA Money about their expectations from the Indian market, among other things. Excerpts from an interview:

For long, Indian businesses have made marketing investments largely on gut feel. How will data analytics change that?
Sebastian: Well, global businesses too use gut feel in ample proportions. But now it’s time for decision making based on facts and data. You can’t always make decisions based on historical data. Sometimes you plan for what’s ahead, and take into account the forces that are going to impact your decision-making. Consumers are evolving, and so are the dynamics of the marketing business. What we do is provide the business case for marketing. We’re using insights to support marketing and innovation, not replacing it. The work we do allows companies to see the commercial, corporate-cultural and organisational impact of decisions about the deployment of marketing investments.

Most advertisers in India already have a media agency and a creative agency, which are more or less doing their job...
David: We have seen about 15-30% increased efficiencies in business after the use of advanced marketing analytics. It’s reflected in the productivity gains. In some cases, it’s shown in the form of profit improvement of about 4%. So, numbers matter and they’re the basis of optimising marketing spends. That may mean a marketer may be required to reduce marketing spend on TV. It could also mean that the business may be required to stop using online and use TV instead.
Sebastian: One is also required to find favour with consumers, maximise buzz and manage the language between a chief financial officer (CFO) and chief marketing officer (CMO). Sure, agencies are doing fine, but after a point, it doesn’t help that they keep doing the same thing. Hence, it might mean creating upscale products, using innovative techniques.

Some marketers would rather stick to tried-and-tested techniques than innovate in testing times like these...
David: Sure. Taking risks worry people. The CFO can outline the risks, but it is the task of the CMO to assess the risk, and we give him the confidence to do so, by bringing in advanced analytics.
Sebastian: So if every other brand in the category is quiet, should you be making some noise? Maybe you should. That’s your opportunity. If it’s vice versa, maybe it is okay to tone down your marketing activity a bit. There needs to be some credible proof indicating why he needs to work on those marketing investments. It’s important, more so in a recessionary market, which is like a hockey stick — quick to fall, but slow to build up. And if you’re going to take your own time to be up there, you’ll miss the bus.

The fact that now CMOs will not hop-skip-jump into a new job, it must be good news for brands?
Sebastian: Yes, it means well for the marketing investments on the brand since that needs a long-term view rather than only a Q-on-Q focus. Business needs a strategy and marketing oriented focus. The CFO and CMO need to be thinking on the same lines. Conventional tenures of say even a brand manager are short. One could learn from the example of Telefonica, a telecom company in Spain, which gives importance to talking about its marketing investments even when announcing its quarterly results. Investors look forward to knowing more about it.

A lot of brands feel the need to offer discounts in such times. Where should they draw the line?
Sebastian: Discounting happens, but there’s a need to strike a balance on where you pull the plug. Some marketers decide on coupons to encourage sales. For example in sachets, India has led the trend in selling such small quantities. So innovation has happened — be it in terms of packaging or pricing. But in all this, there’s a need to take a long-term view. There’s a need for marketers to understand that the biggest driver of a company’s valuation is revenue growth.

What are your plans for India? Do you work on a retainership basis?
David: We hope to have an office here by the third quarter of this financial year. We’re tapping into the vast pool of analytical talent here, to develop resources in the strategic consulting space. Being part of the Publicis Groupe is certainly a leg-up. Currently, we have offices in Hong Kong, London and New York and we now want to develop a global centre of marketing excellence.