Advertising is that Girl who flirts with you, but never marries you.

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How many times has a girl broken your heart? Once, twice, lost count? Did you find the ‘perfect girl’ – the one you could spend your life with, who suddenly vanished?

I've had my heart broken and so has everyone else. If you haven’t, then stop reading this article and go out there get your heart mutilated first! It’s worth the experience! 

Now, this is not Aunty Dolly’s column on how to manage relationships. This is the prestigious Entrepreneur magazine, and I am a battle-weary entrepreneur writing in your service. The connection is how advertising mimics heartless girls that make you weep! 

Love works like MAGIC? 

In 1999, during the peak of the dot com boom, a set of hoardings appeared all over Mumbai. These were full blown posters of Sachin Tendulkar, Shah Rukh Khan and Hrithik Roshan plastered on every hoarding available in Mumbai.

It was difficult to understand what these hoardings were about. One day, my driver (who seldom speaks) asked me, “Bhaiyaji, yeh kaunsi picture hai jis mein Sachin, Shah Rukh aur Hrithik hain?” (Sir, which movie is this, in which Sachin is starring with Shah Rukh and Hrithik?) 

I strained my eyes to look at the hoardings and had a mild cardiac arrest! On the side of the hoarding was scrawled “Hometrade.com”. 

Those who were alive in Mumbai during this period, will remember that hometrade.com was a dot com that had nothing to do with cricket, movies or Bollywood! It was a Navi Mumbai-based finance startup that spent Rs.25 crores (the equivalent of 150-200 crores today) in dumb advertising to just get noticed!! 

Boy, the hoardings did get noticed, but by the completely wrong set of people! Given that in 1999-2000, the population of Internet users in India (forget Mumbai) was > 1 million; spraying hoardings to get traffic and usage for a dot com was like emptying the ocean to find a lost bottle! 

Hometrade.com went bankrupt. It’s advertising did not work. Instead, it generated a lot of attention amongst the Income Tax authorities who later figured out that the promoter was also a fraud!! He was arrested for financial irregularities a couple of years later. 

Lesson? Advertising (like Love) is not magic. It does not cast a spell over people to make them do what you want. Instead, if anything, lots of advertising in the wrong place, at the wrong time and in front of the wrong people, confuses more than clarifies. 

 

Once Bitten, Twice Clumsy? 

The average American is married 2.5 times. Yup! That's one marriage down, second marriage down and a third marriage underway. Or said simply, it’s taken the average American 2.5 times to get the ‘model’ right. 

In 2000, on a quiet weekend, Indian citizens were treated to a shock when they opened a Sunday Edition of the Times of India. The newspaper was completely covered with a ‘skin’ of an advertisement for Indya.com – a horizontal portal founded by a team of great advertising and media veterans; funded by none other than Rupert Murdoch’s News Corporation. 

It is rumored that Times of India made a major killing that day. Indya.com’s highly experienced team wanted to ‘shock and awe’ (a military phrase) the Indian Internet users and get them to log onto Indya.com that fateful Sunday. They had aspirations to ‘kill’ rediff.com – the then ruling portal of India, in one swift move! 

It was credible to believe that the experienced veterans in charge of Indya.com knew what they were doing. And since the advertisement appeared on a Sunday, every Indian would log in. 

Nothing of the sort happened. Indians noticed the ad, yawned, had another chai and slept that afternoon. Indya.com closed down a year or so later. It had bankrupted itself; it wound up and mothballed. Today it operates as an ‘also ran’ site of Star. 

So, what went wrong? 

Like the average American who had to marry at least twice to get it right, all the experience of the Indya.com team failed at their‘grand attempt’. The tragedy was that they spent so much on this one tactic that later they became defensive in their marketing plans and also ran into major investor conflict. 

Lesson? Don't listen to those ‘marketing/advertising/media’ gurus who claim that they know it all and that an ‘advertising plan’ will help your business fly. They often don't know what they are talking about and are just hanging around to fleece you of your money. 

Remember that advertising like love is very, very fickle. And unpredictable. It takes many attempts and many trials to get it right! 

So, why do people fall in Love?? 

By now, you would assume that I am completely negative about advertising. Or metaphorically speaking, since I am comparing advertising with ephemeral love, that means I believe people shouldn’t fall in love? 

Of course not! There is a reason and a perspective to advertising. 

Let’s look at Naukri.com, the few famous matrimonial sites as well as Flipkart.com and the ubiquitous ads of these brands that we constantly see on TV. Are these businesses crazy? Have they not learnt the lessons that I have been propounding so far? 

Well, far from that. 

These companies are ‘category leaders’. They define and lead their category and advertise to do so. Take for instance Naukri.com – a highly profitable and listed dot com in India. The Naukri team aggressively advertises on TV for several reasons – a) they can afford to since they are very profitable (google ‘Infoedge financials’), and b) for a more important reason – they need to grow the ‘online jobs’ category in India. 

What is category creation and expansion? It essentially is creating ‘awareness’ of specific services in the overall market and then trying to grab revenues from the same. 

Flipkart exemplifies ‘category creation and expansion’. In a market like India that is still nervous about buying online and paying by credit card, Flipkart’s ‘kiddy ads’ demonstrate the ease of buying online and also immediately offers Flipkart.com as the best place to shop. Slowly, but surely, people have started reacting and changing their habits. 

To be advertising with such vengeance, you need to be highly profitable (in 2013, Info Edge generated revenues of 435 crores, spent 57 crores on ‘advertising and promotion’ and still ended up with a 102 crores net profit after tax); or you have to be well funded (like Flipkart who has raised over 380 million dollars (Rs. 2470 crores) in Venture Capital! If you are neither, then you are playing with fire. 

Lesson? Be very careful when you plan advertising for your startup. Advertising needs to be continuously sustained over the years to create ‘brand awareness’, category growth and leadership. Unless you have juicy profits or unending funding, be careful how you spend! Also, remember that changing ‘consumer habits’ takes forever – almost like the long dating and courtship period to woo the girl you love.

She loves me… She loves me not… 

A grand daddy of advertising once said, “Half the money I spend on advertising is wasted; the trouble is I don't know which half.” 

Funnily, that’s the real truth! 

Does she love you? Does she not? Well, only time reveals. But unlike love, in the business world (especially in digital advertising), you can do lots of mini and micro experiments to figure out what is really working! 

Let’s assume that you are a mobile apps company that has a great ‘free’ camera app with in-build premium themes (that consumers can pay for later). Given that the app is ready and you have to tell people about it, what do you do? 

Advertise of course! 

But rather than going ‘all out’ and ‘spraying & praying’ your money, there are intelligent ways to spend and measure what’s working! Examples: 

  • Spend small but equal sums on various advertising networks and find out which one is really competitive for you.
  • Experiment between cost per downloads vs. cost per impressions and figure which kind of buy gives you a ‘cheaper’ install
  • Measure how many people install your app and how many of them actually ‘buy something’
  • Then calculate your ‘actual cost of user’ which is really what you are paying for
  • Experiment further not by buying more ads, but within your own product! Change the “Buy” button with “Try”; see if a warmer color gets you more clicks; experiment with different price points; etc.

Lesson – Advertise in dribbles and then measure, measure, measure! What you can’t measure in Love, you can absolutely measure in business. Don’t be anxious to ‘spend money and get lots of users’; instead be anxious to ‘get a positive profit out of advertising’. 

In the famous novel ‘Love Story’, there is a timeless line, “Love means never having to say you’re sorry.” Well, in the context of advertising, I would phrase it as, “Advertising means almost always having to say you’re sorry.” 

 

*****

Originally published as my column in the October issue of the Entrepreneur magazine.

Read ALL my other articles published in Entrepreneur mag HERE.

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Just Love this Awesome Post!

Advertising means almost always having to say you’re sorry.

Thank You Boss! :)

Agreement with the point where you said "Unless you have juicy profits or unending funding, be careful how you spend!". I am a B-school post-grad (the ones you hate the most) and have almost forgotten about that degree once I started my own business. One of the case studies we took up during the B-school days was on Lux soap and why would it keep on getting different celebrities bathing with their soap (right from Shahrukh Khan to Katrina Kaif) in their ads? Does that really guarantee increase in sales?

Answer was simple, the ads ensured "top of the mind recall" for the brand. Eg. At any given point of time, ask people around you if they knew a soap brand called Lux and most of them would say yes. Subsequently ask them if they used Lux daily, you would get a mixed response depending upon the demographics of the "soap customer". So why would they still spend so much on celebrities and advertising and ad spaces? Well the "brand recall" helps them to generate revenues through impulsive buying. Eg. Say if you are based out of Mumbai and need to travel to Delhi for a couple of days and forgot to take a soap along in your back-pack. You would probably land up in a medical store in Delhi buying a soap. And if your are not "brand conscious" with soaps (like me), the possibility of you landing up buying a Lux is high when the medical store guy asks you "bhaiya kaunsa sabun du". 

Advertising never helps "creating" a brand but building brand awareness. It is a cost center to be used at the right time and at the right place so as to convert a part of it into a revenue center. 

About Indya.com advertisement, I can remember a couple of things.......I was in Chennai for a vacation, and I remember seeing that Ad in TOI....first of all, I could see what money could do - A national newspaper was ready to change the first page culture and instead show an advertisement, to me it came as a blow on my teenage mind-set. I never knew money could buy-out cultures (at least till then). Same day, in Chennai, near the railway station, I saw a hoarding on indya.com, trust me when I say this - Even till this day, I have not seen such a massive hoarding anywhere else. To me it felt as if some 10 hoarding boards have been clubbed to create this one piece. Unbelievable!

To me, the most important lesson from this article is - Advertising needs to be continuously sustained over the years..... 

Nicely written. Hits hard. Thank you!

Also from customer perspective, even my eight year old daughter understands, most advertisement are not factual eg. shampoos, soaps.. list is end less.

Optic management is the focus...quality and goodness to the customer matters a little.

Today i understood why MNC's like Pepsi, Coca-cola spent millions of dollars every year on advertising , even though every body knows about them !

Positive Profit out of advertising...

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