The conformist vs The code breaker

EACH DAY, INDIA'S TOP-NOTCH MARKETERS WRESTLE WITH this question: Where should they flex their marketing muscle? On conventional media such as television, hoardings, newspapers, and magazines like the one you are reading? Or relatively new platforms such as Facebook, YouTube, Twitter, and LinkedIn, broadly clubbed under social media. Part of the problem comes from the fact that in a company’s scheme of things, it’s often the same executive who has to decide on which side to weigh in.

David Edelman, partner and leader of the digital marketing practice at consulting firm McKinsey's offices in Boston, says that similar conflicts are playing out in cubicles around the world. Social media is new and very seductive: it’s highly cost effective, and traditional media is often unable to match its reach. But newspapers and TV channels have dominated strategy as long as one can remember.

Last November, Manmohan Gupta, co-founder and investor with IndMobile Ventures, a company that provides telecom services to Indians travelling abroad, studied how much it would cost to run a three-month campaign across TV, print, billboards, etc. IndMobile’s brand HopSim was up against established players such as leader Matrix, which
was often visible on conventional media. The costs were estimated at Rs 10 crore. Gupta decided to run a campaign on LinkedIn. It cost him Rs 15 lakh to place HopSim on LinkedIn’s home page for three months. “Today we have more than 1,300 paying customers. On day one of the LinkedIn campaign, we got 2,000 hits. We would never have been able to afford the big-bang advertising ... I mean a front page ad in a leading business newspaper costs Rs 90 lakh,” he says. Gupta had entirely sidestepped traditional media.

A GARTNER REPORT published this February notes that by 2015, 80% of discretionary spending by consumers will be influenced by social marketing. That makes social media a top management issue for McKinsey’s Edelman. “Across the world, more and more companies, many of them our clients, are creating senior digital marketing positions. You can call them chief digital officer, the digital centre of excellence, [or] centre of digital leadership,” he says. And while he doesn’t name clients, some companies have already appointed somebody to that position: Cisco, Wal-Mart, and Pizza Hut.

It’s not just companies. Last year, New York City mayor Michael Bloomberg’s office posted a search for a chief digital officer who would develop ideas on how to use social media, digital communications, Web 2.0, and other tools to better serve the public. Early this year, it appointed Rachel Sterne, a 27-year-old citizen journalist and an adjunct professor at Columbia Business School, to the post.

The trend is also catching on in India. Pizza Hut, which launched a campaign exclusively for its Facebook fans during the last cricket World Cup, offering a Magic Times meal free. The promotion helped increase the fan base of Pizza Hut India’s official Facebook page, which now has 1.1 million fans.

In May, Coca-Cola, in partnership with MTV India, launched the India edition of Coke Studio, a television series featuring fusion music shows. Besides a dedicated website, Coke Studio is using social media such as Facebook and Twitter to connect with music lovers. The Facebook page, “Coke Studio @ MTV”, which went live in May, has 3.61 lakh “likes”.

The classic tool used to build most brands in the last two decades has been the 30-second television commercial. That was backed by newspaper and magazine advertising. It meant one massive campaign on which the company focussed its energies, along with some tactical promotion to go with it.

Social media begs a different approach. It’s about multiple small campaigns, dispersed across various sites, but each critical to building the brand. It’s also about continuously engaging the customer, unlike a one-time interaction through television or newspapers. “It’s a place where you have a straight-up discussion instead of pushing an agenda. And the community can disengage whenever it wants, so there’s nothing binding,” says Sameer Satpathy, head of marketing for consumer products major, Marico. Here, the customer can often shape the message.

It also changes the nature of gathering consumer insights. Traditionally, managers have relied on focus group discussions which, by definition, deal with small numbers of customers and are moderated. On social media, the interaction happens with an exponentially larger customer base and is far more freewheeling. And while the interactivity is great because of real-time feedback, it also potentially puts the brand at risk because users can exploit the same platform to relay their differences.

As companies are fast realising, social media can harm a brand as much as it can build it. Innumerable studies have shown that bad news travels faster and garners more responses than good, often by a ratio of seven to one. In an incident in Chennai last year, a group that met for a tweetup at Café Coffee Day was allegedly asked by the manager to pay a cover charge or leave the place. When the members of the group got on Twitter to criticise the manager’s move, the café offered to apologise, and chose to use the same site to do so.

Digital media includes tools such as Internet ads and text messages. Social media is its most significant and effective subset given that it is highly pervasive, and allows two-way communication. It’s the rise of social media that’s forcing companies to look at the digital media space more closely.

Hari Krishnan, country head for LinkedIn India, says C-Suite execs can’t ignore social media because it’s free and “therefore has scale you can’t beat”. LinkedIn India has 9 million members, that’s nearly 10% of all Net users in the country. Remember, LinkedIn is a site for professionals. YouTube has 20 million, Facebook 25 million, and Twitter 34 million.

Edelman says that already the debate abroad has shifted away from the need to hire a digital media person (a given) to where the function should report into—directly to the CEO or into the marketing department. He says that CEOs are now ensuring that there’s time on the executive agenda to discuss social media. “The CEO isn’t going to personally look into it day to day: He wants to ensure it’s in the hands of the appropriate person.”

So have you appointed your social marketing officer or chief digital officer, yet?

MOST INDIAN COMPANIES haven’t, though they agree that it’s a position that needs to be filled up. Ask Tanya Dubash who her chief digital officer is and she says, “We don’t have a single person at this stage, someone who does everything that falls under the definition of that—be it online marketing, social media activity, public relations, or brand reputation-related initiatives.” But Dubash, who is executive director and president of marketing for the Rs 15,200 crore Godrej Group, and runs into heads of marketing globally, adds she’s aware of how vital that function has become. She plans to appoint a chief digital officer this year.

Mohit Beotra, Airtel’s chief of media and brand, reacts in a similar way. “Do I need a chief social media officer? I guess we are headed that way.” In the meantime, his next in command, Vikrant Khanna is filling in. Khanna is vice president, customer engagement and digital, and oversees a cell of five people, who work on Airtel’s website, online marketing campaigns, online display ad campaigns, social media marketing, etc.

So why are Indian companies still resisting the idea of appointing full-blown social media heads? Part of the answer is that the medium is still relatively new and somewhat confounding. Shubho Sengupta, a consultant who works with Coca-Cola says that if you follow the money, 95% of budgets are with traditional media, but the focus is all on social media, thanks to players such as Twitter and Facebook. “Earlier if you wanted to sell something to a CEO, people would say you go talk to his wife; today they say talk to his son.”

Vikas Gupta, founder of 9.9 Media, a media company, says that many of his peers don’t react well to change. He points to the advent of FM radio and how initially marketers didn’t fully understand what that meant.

Relatively younger marketing professionals who are in their early forties, and are a bridge between yesterday’s marketers and tomorrow’s, are blunter and argue it has to do with mindsets. “Your typical CMO [chief marketing officer], in his late forties and early fifties, grew up with his eye on GRPs [gross rating points] and TRPs [television rating points] in the Doordarshan era,” says Shraman Jha, senior vice president, NIIT. “Therefore, he is not geared for what’s happening today.” (See table on next page)

In the interim, Anuradha Aggarwal, vice president, brand communication and consumer insight, Vodafone, says that chief marketing officers at least need to bone up on developments in the social media sphere to stay relevant. Vodafone India has 2 million Facebook fans, up from 400,000 in April last year. (For more on how believable such stats are, see The Anti-Social Network on page 58).

Swapan Seth, CEO of advertising firm Equus Red Cell, who says he’s been thinking a lot about social media content management lately, believes that most marketing heads still haven’t grasped how swiftly and fundamentally social media is changing their discipline. “Being able to interact with a forum on a social media platform that operates with a user group—that’s a full-time job, like being a deejay in a virtual club room. You have to be sprightly ... and you have to be ready for assault.”

His bottom line: “CMOs today aren’t frightened of being irrelevant, when in reality they should be.”

Many of the young marketing managers that Fortune India spoke to privately, as they are not authorised by their companies to speak to the media, say that hierarchies also impede the development of a chief social media officer. They argue that the people who understand the use of social media best are the junior managers, who often have no voice inside a company or an advertising agency. (Dubash says she talks to twentysomething employees to understand what’s going on.) The senior managers tend to interfere without any understanding of how social media works. They even outsource the job to agencies. “To think of appointing a chief social media officer who understands the space is a long stretch,” says one young manager.

THERE ARE, OF COURSE, some exceptions, largely driven by the CEO or a senior-level manager. BMW India is one of the few companies that has acknowledged the power of the new medium. Andreas Schaaf took over as BMW India’s boss in May 2010. Prior to that, he was heading up the auto major’s operations in South Korea, where he had launched the BMW 1 Series Coupe between March and April 2009 entirely on digital media, using sites such as Naver (Korea’s most popular search engine) and Daum (a portal) along with blogs. It was no surprise that he wanted a social media manager on board post haste. He made it the job of Christian Saffer, India marketing director, to find one.

Saffer pored over more than 20 shortlisted CVs for more than five months before appointing Parth Dhingra, a 28-year-old, self-confessed social media junkie with an advertising background and a somewhat academic demeanour, to the job in February.

“We were desperate to hire a suitable executive for the social media function,” says Saffer. “Every week, without fail, Schaaf would call, asking if I had located one yet, so it was high on my list of priorities.”

For his interview with BMW, Dhingra created a 100-page PowerPoint presentation, which first intimidated and ultimately impressed Saffer. Schaaf and Saffer, both in their forties, say it’s best to leave using social media to the likes of Dhingra, who have an intuitive feel for the space. Dhingra’s take: “It’s creating perception at the speed of thought.”

So what’s it about BMW that makes it so receptive to using social media? Schaaf says that it didn’t happen overnight. Nearly 12 years ago, around the time of the Internet boom, BMW built a “marketing innovations lab” at its Munich headquarters. At the time, the company was rethinking itself as a marketing company instead of a purely engineering one. What was significant was that the lab was staffed only by those in their twenties or very early thirties. Saffer was among them.

Most others at BMW thought the guys at the labs were a “bunch of freaks”, says Saffer. “We would deal with concepts and ideas that weren’t in use in the auto industry.” BMW dubbed this trend research. Using the Internet was one of them.

In 2010, BMW launched a car entirely online. In December, the company introduced the 1 Series M Coupe on its website. No billboards, no print, no TV. The launch generated 270,000 unique visitors and resulted in sales of 3,762 cars in the first two months—1,000 more than initially projected. Today, BMW’s Facebook page has 5 million followers.

Saffer says new media allows you to “fish where the fish are. You know, customers aren’t exactly hanging out at the dealer showrooms like they used to.” That’s made the social media jockeys minor heroes in the BMW system. “Today, those are the guys that everyone, be it from HR, legal, or finance, wants to plug in to,” says Schaaf.

SO WHO’S A PERFECT social media officer? Dhingra’s background holds some clues. After an undergrad degree in computer science from Delhi University, he did his MBA at Delhi’s Apeejay School of Management, and worked with IndiaMART (an online B2B portal). “My whole career has been online, be it in advertising, or client servicing, or building new brand initiatives—it’s a space I grew up in,” he says.

But as NIIT’s Jha notes, social media managers, unlike MBAs, aren’t available “off the shelf”, and identifying them is not an easy task. NIIT recently launched a three-month programme that teaches courses such as web analytics, search engine optimisation, pay-per-click advertising, etc.

McKinsey’s Edelman says one of the biggest tasks for managements around the world is to train executives on how social media works. “Top marketing execs in the next five years will have to show that digital media is part of their thinking, and that they can come up with new ways to connect with customers.”

Sangeeta Lala, co-founder and vice president of staffing firm TeamLease, says the match that most recruiters are looking for is a candidate with 15 years to 20 years of experience. “Ten years in PR and traditional media, and three or four years in traditional sales, and the rest in online media or content marketing.” Often that means the person is too old to understand how social media really works.

As director, marketing, at spirits company Bacardi, one of the jobs 35-year-old Arvind Krishnan does is manage mixbacardi.com—a website that sells music, gives cocktail tips, and builds a chatroom around Bacardi. It’s a smart way of building a lifestyle brand in a country where liquor advertising is banned. While he doesn’t only do social media, he feels his kind of background may help work the space.

After a degree in commerce from Delhi University, he started with TBWA, part of the Omnicom Group, where he spent four years working on accounts such as Apple and Sony. He then joined LG Electronics, selling refrigerators, and moved on to join Luxor Writing Instruments, before joining Bacardi. “Listen to your consumers—that’s what my past experiences taught me; and social media is all about that,” he says.

Gleaning insights from social media is never easy. On May 12, bride-to-be Divya Sharma posted on Tanishq’s Facebook: “Like every parent, mine are also interested in buying gold for my marriage ... I want to know about your kundan designs, and how much they cost, in [the] context of complete bridal jewellery, comprising the neck-piece, nose ring...” She is one of Tanishq’s 99,000 Facebook fans.

The fact that a bride-to-be is publicly discussing her jewellery is a big thing for Bhuwan Gaurav, marketing head for Tanishq. “It tells us what customers want and what products are being used for various occasions.” What is Tanishq doing with that information? Gaurav says they are working on it.

WILL THE DIGITAL MEDIA function soon become more important than any other in the marketing department? Opinions vary, depending on who is asked. Marketing heads tend to say the principles of marketing will remain the same, and social media is just another channel like, say, organised retail. The folks representing social media say that ultimately conventional marketing’s role in many products will reduce and, naturally, social media managers will dominate the marketing discipline.

Bipartisan observers such as Edelman say that digital marketing officers will become more prominent in certain industries, such as retail and finance, where the customer experience can be digital as well. The rise of tablets will speed up activity further. But what’s going to be more important is managing that journey. “It does require a mind-shift, and unless senior management is savvy, it could be a challenge to make that transition,” Edelman says.

Back in the 1970s, Alvin Toffler, author of Future Shock wrote how fast-shifting preferences flowing out of an accelerative thrust driven by technology would radically change the world. Social media’s impact is a bit like that. The question is: Can companies smartly harness its power to work for their products?