Ogilvy & Mather, Bangalore
Poran Malani oversees Ogilvy & Mather’s business in India. Ogilvy, which handles global accounts like Lenovo, is one of the largest advertising agencies in the country, with six offices and nearly 1,500 employees. Malani spoke with eMarketer’s Lauren McKay about what it’s like to market to consumers in India, where mobile internet access is expanding beyond Tier 1 and Tier 2 cities, and smartphone adoption is proliferating.
eMarketer: What can you tell us about internet access in India?
Poran Malani: If you look at the number of PCs in India, it’s around 10% percent penetration. (In contrast, the US and the UK have upwards of 80% penetration.) However, in absolute numbers, that’s still 120 million people in India, which is a lot. The concentration is mostly in the major metros—Mumbai, Bangalore, Delhi, Calcutta, and Chennai. The middle classes have grown phenomenally in the last 10 years, and that affluence is contributing to internet usage.
If you go further into the hinterlands and the Tier 2 and Tier 3 cities, PC internet access isn’t there. In some cases, though, where there’s no PC access, people have leapfrogged technologies and have gone straight to mobile phones. In those areas, mobile phone penetration is massive compared to internet penetration.
Having said that, it’s predicted that investment in Tier 2 and Tier 3 cities will flourish in the next few years, which will lead to a big uptake of PCs, and therefore more digital marketing.
“Where there’s no PC access, people have leapfrogged technologies and have gone straight to mobile phones.”
eMarketer: How are brands increasing their investment in reaching consumers in second- and third-tier markets?
Malani: Many brands are projecting huge investments into those areas just because they are growing so rapidly. The important thing is for marketers to have distribution throughout the tiers. There’s no sense in building up your product in Tier 2 unless you have the physical ability to sell your product and your brand there. There’s a lot of market infrastructure that needs to be put into place in order to start seeing that growth. Fortunately, education is improving, wealth is increasing and the consumer desire to experiment with new products and technologies is there.
eMarketer: Given the diversity among access to the web, how sophisticated is digital marketing in India?
Malani: There’s a big difference in how digital media is used here compared to the West. In this country, you have the big brand advertising agencies, and you have the niche digital hubs. Digital, to date, has been positioned as very tactical—it’s based around clickthrough rates and selling products. There’s been a dissonance between brand building and tactical marketing.
However, because this is a developing market, brands are still establishing themselves. So brand building is far more important than just tactical selling, hence the emphasis on television. If you look at TV in India, it’s got penetration across the board and the cost per reach is actually cheaper than a lot of online search.
“If I go to the West, there’s usually a generation gap between parents and their children. What I’ve noticed in India is the generation gap is literally every three years.”
eMarketer: Are digital marketers tapping into social networks?
Malani: Facebook in India is one of the biggest markets in the world, yet there is a great generational difference in usage. If I go to the West, there’s usually a generation gap between parents and their children. What I’ve noticed in India is the generation gap is literally every three years. A 24-year-old is very different in attitude from a 27-year-old, and from a 32-year-old.
I think it’s because the speed of change here, the speed of urbanization and the speed of migration from city to city to find jobs in the growing middle classes—attitudes are changing incredibly fast.
Social media usage by consumers under 28 is growing phenomenally fast, as it is everywhere else in the world. But if you look at it in marketing and sales terms, there’s a disconnect between who uses social and who influences purchases. The majority of purchases are by those older than 40, who are much more effectively targeted through TV. The dissonance between age groups is much more prominent here than in most markets.
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Check out today’s other articles, “Worldwide, More Money Goes Mobile” and “More People Pay for TV, but Cable's Share Slips Slightly .”