AI is so Hyped…especially by CEOs

AI has become the shiny new toy in the business world. CEOs are throwing around the term and hoping it'll magically solve all the company’s (and their) problems. Those especially where the businesses are not doing well are using it even more to assuage the shareholders in investor calls… and market is indeed responding with share prices going up (Adobe, Meta, and Nvidia especially according to a report by WallStreetZen)

 

I remember when I was starting my career – back then MS Office was the buzz word. Everyone thought that it would reduce jobs (improve profits) and revolutionize the game. In just a few years every company had MS office and then Google products. MS Office did not become the MOAT. Cause everyone had it. I see AI going the same way.

 

I mean, sure, AI is cool. It can automate tasks, crunch numbers faster and make things a bit easier (and prettier). But will it single-handedly transform a struggling company into a powerhouse? Probably not. Will it be a differentiator? Probably not.

 

I think AI to be more of a leveler than a differentiator. Soon everyone will have access to it, whether it's through their own fancy AI system (bad idea for most) or just renting out some third-party software and adapting it for your business (From Open AI, Influencer, Anthropic to domain based such as Writer.com). So, in the end, it's not really a game-changer because everyone's playing with the same toys – yes some toys will be better – but not a differentiator as such to improve bottom-lines substantially.

 

Unless I am getting this wrong…

 

P.S. Ah and this was not written by AI – I tried it but it wrote "CEOs are throwing AI term like confetti at a parade" … Sorry, I don't write that pretty.😋

Global pitches may not be such a good idea - an article by me published in the BrandEquity on 7-7-2019

https://brandequity.economictimes.indiatimes.com/news/marketing/why-global-pitches-are-not-a-good-idea/70112581

Many are the MNCs who work on the global pitch model. The selected agency, typically a global player, wins the mandate across multiple countries where the client has a presence. Now there are several reasons this isn’t the best of practices around:

The Client’s POV: The local agency in each country did not win the account. Rather the account was gifted to them by their global headquarters. The local agency therefore had limited or no contribution towards winning the business. Similarly, the local client SPOC had a limited role in the decision-making process since the same was implemented not at the regional, but at the global stakeholder level.

In such cases, ownership is low at both ends because representatives of neither agency nor clientele had skin in the game from the outset.

Another factor that becomes a challenge from the client’s perspective is that beyond a point, complacency seeps in since the agency knows that the mandate will not shift. The client thus ends up losing out not only by dint of their own actions, but oft by dint of their inaction.

The Agency’s POV: There are enough, and more instances of global clientele being serviced by agencies locally and successfully so. Suddenly, the global mandate changes and an agency that was doing some truly exceptional work loses out in favour of an agency that might not even understand the category. In such cases what really rankles is the amount of additional effort agencies put in, in order to make sure that the client is happy over and above the requirements of the mandate.

As importantly, what is the long-term incentive to service a MNC client religiously if one may lose the account all of a sudden owing to global calls?

Market POV – Local clientele understand their requirements, call for a local pitch and know which agency within the geography can handle it. Besides many other things evaluated at the pitch, as important is the inter-team connect. Global pitches don’t offer that chance. What they do bring to the table is transparency and uniformity of sorts. To achieve this, global can work with the local office to set criteria, standardise brief templates and perhaps introduce an evaluation process to make sure the choice is objective and process unbiased. Secondly, each country has its own good and not-so-good agencies. Bundling an account with just one player across continents does not allow one to optimise the best talent for the brand by geography. 

The decision should therefore be left as far as possible with the local client. After all, the world is moving to a hyperlocal approach and to, at this point of time, employ a cookie cutter approach would be hara kiri. Way better then, is the horses-for-courses approach, one that allows clientele to tap into the best servicing talent globally with the best local understanding to achieve the best results.

Agencies Fee or working Media - an article written by me published in IMPACT 31st March 2019 Issue

https://www.readwhere.com/read/2083116/Impact/volume15issue42#page/20/1

IPL or General Elections, an article by me that featured in ET Brand Equity on 16-01-2019

https://brandequity.economictimes.indiatimes.com/news/marketing/picking-the-right-game/67543914

This summer marketers will be facing a dilemma on whether to go high on IPL or on the General Elections, both mega events likely in April and May of 2019. Not to mention the ICC World Cup that follows right after. Few years ago this would have been an issue only for those marketers targeting male audience (ACs for example) since cricket and news were both seen to be content driving male viewership. Two things have changed since. Both IPL and Election related programming have found 45% of their viewership coming from females. This is drawing many categories to these events. Further, joint decision making is happening in many purchases such as durables and auto drawing even more traction from other categories. As a marketer with limited budgets, what makes sense for you this year since both the mega events will be watched by your prospects? Will you go for the IPL or the General Elections?

What are the numbers saying?

Reach is one of the most important reasons why marketers take high impact properties and pay a premium. Recent five-state assembly election viewership data suggests that reach of News channels on counting day alone was better than combined reach of IPL’s three playoffs and the finale1. We looked back at the Karnataka elections in May 2018 to make sure it was not an aberration. The reach of counting day on leading Karnataka news channels was twice that of the entire Star bouquet matches for the IPL finals for the Karnataka market.  With the new TRAI pricing, reach of sports channels may take a hit while news is largely free to air. This, if it happens, will dent IPL reach further.

What about ratings and pricing? While average match rating of IPL was quite high compared to election programming on News channels, when we look at the CPRPs2 (cost per rating point), news channels score much better. Owing to low cost of inventory, they allow for high frequency plan as well. So if you have a message you want to hammer, General Elections may be the way to go.  Of course this is all TV. Digital will have its own nuance.

Qualitative parameters

IPL however offers other advantages. Coming from one publisher, it is just one deal you have to negotiate. Programs and telecast have finesse and consistency which allow you to plan your campaign well in advance. Planning a campaign around elections on the other hand can be haphazard. You may have to sign deals with multiple news channels across multiple languages. This may give you a good spread and help you do better market prioritisation, but will be a hassle nevertheless. Programming can be different in different markets and most importantly, as a brand, you may want to stay away from politics.

The eco-system

Let us now look at the eco system of viewers, trade, internal stakeholders and the marketplace. Viewers may be keener on elections as opposed to IPL as it is more participatory in nature since your vote counts and your fate, even if short term, is somewhat linked to the outcome of the elections. Or so you feel. IPL on the other hand happens every year and this year it may witness partial presence or complete absence of many international players owing to the upcoming ICC World Cup. It is also possible that part of the IPL is moved out of India owing to the elections leading to somewhat low interest levels from viewers.

If we look at trade (dealers, store owners etc), they are likely to be equally excited about both properties since the community is male dominated. The internal stakeholders however (management, sales team, employees etc) may be happier with IPL because of the pride and glamour associated with the property. 3

IPL content is proprietary and available with one publisher. It is therefore often seen as a seller’s market. Plus there are clear guidelines from BCCI on what is possible and what is not. News on the other hand is democratic. With so many news channels competing with each other, you are likely to get a deal of your choice with a lot thrown in as value-adds. You may also be allowed to do varied brand integrations and innovations during elections on news channels compared to IPL. 

Deep dives can tell you which one works for you and at what price. Which of the two you take finally depends on what your brand needs, what your customers and trade watch and how deep are your pockets. 

1 Common TG across all three sets - SEC AB 22+ MF. Election programming taken from 8AM to 5PM and 8PM to 11PM on respective days and IPL programming includes all IPL matches on respective days.

Set 1 (HSM markets): Counting Day and four Polling Days (5 days) of the five-state assembly elections held in Nov-Dec 2018 on 5 Hindi News and 3 English news channels compared with three IPL playoffs and IPL Finals (4 days) on All Star channels (All Sports, Star Plus, Jalsha, Gold, Pravah, Suvarna, Asianet etc). 

Set 2 (HSM markets): Fifteen days of programming until the counting day of the five-state assembly elections held in Nov-Dec 2018 on 5 Hindi News and 3 English news channels compared with last fifteen days of IPL 2018 concluding with the finals on all Star channels (All Sports, Star Plus, Jalsha, Gold, Pravah, Suvarna, Asianet etc).

Set 3 (Karnataka): Counting day of Karnataka elections on 3 Karnataka News channels and IPL 2018 Finals on Star Sports 1 and Start Sports Hindi for Karnataka market

Hindi News Channels considered: Aaj Tak, India TV, ABP News, Zee News, News 18 India

English News channels considered: Times Now, Republic TV, CNN News 18

Kannada News channels considered: TV 9 Kannada, Public TV, Suvarna News 24

2 Spatial Access Intelligence

3 From discussions with clients

Digital Advertising Spends Article by me in FE on 24-12-2018

An article written by me that appeared on Financial Express on 24-12-2018

https://www.financialexpress.com/industry/your-working-media-may-be-reducing-when-you-spend-on-digital-heres-why/1423060/

Digital has its own set of advantages with near real-time reporting, live reactions, addressing user grievances and boosting sales during flash sale events, just to name a few.

Digital advertising spends have been on the rise. It is estimated that India will be spending `13000cr in 2018 on digital advertising, up from `8000crs in 2016. This is 19% of the total advertising pie, more than OOH and Radio combined. While this is small as opposed to developed markets where digital’s share of the total advertising pie is ahead of 50% (including that in China), the Indian digital advertising spends continue to grow at 20-25% year on year and don’t show any sign of slowing down.

Part of the reason is the efficacy of the medium itself. Digital has its own set of advantages with near real time reporting, live reactions, addressing user grievances, boosting sales during flash sale events just to name a few. Other media may have similar customer reactions but the high of seeing it live is pulsating. Another big advantage of the medium is very low entry cost.

Having said that, there could be other reasons why digital spends may be on the rise. In the absence of credible third party data, the sellers of the medium are throwing metrics which we have no option, but to believe. Meanwhile digital media agencies make two to three times their commission on digital as opposed to on traditional media. The net effect is that while the advertiser may have gained efficiency at one level, owing to the wastage and the high fee, his ‘working media’ may be compromised.

If you observe how a typical advertiser has spent his media budget over the last two decades you would notice that in yesteryears almost all the money earmarked on media went on media. Agencies would keep a small percentage as fee to manage the account. However in digital media, one has to not only pay the agency fee which is way higher than traditional media management fees, but also pay other intermediaries such as technology fees, reporting fess, content margins etc. which are estimated to be in the range of 30% of total digital spends.

This is however one part of the equation. Money in digital media has given rise to unscrupulous practices such as bots and clickfarms and viewability has become an issue. As per our estimates, only 50-60% of ads are actually seen on digital. In some cases the figure has been noted to be as low as 30% even on CPM buys. Many reports have suggested ad fraud rates to double this year from previous year rising to $19 billion globally.

Essentially, as an advertiser, this means that your ‘working media’ may be reducing when you spend on digital on account of high intermediaries cost as well as viewability issues.

So should we stop spending on digital? Of course not! But before we do, let’s ask the following questions related to transparency:

-        How much of the budget is actually deployed to reach my consumers as opposed to fees paid to intermediaries and sellers of digital media?

-        Is my brand served in a safe environment? How can I be sure?

-        What is the viewability ratio? What is the proof of the same?

-        Most importantly, do we have enough transparency in the medium to allow us to investigate the above?

Please note that while some may say digital buying is via programmatic and hence difficult to deep dive, the reality is quite the contrary. Programmatic offers transparency. And as a buyer of digital media, you have every right to transparency. After all it’s your money! 

Indian Television Industry: Where supply outstrips demand

An article written by me that appeared on Business Standard on 21-12-2017
http://www.business-standard.com/article/opinion/tv-industry-where-supply-outstrips-demand-117122001360_1.html

TV Viewership and advertising demand is witnessing a de-growth, yet 70 new channels were launched in 2017

It is interesting to see how Indian broadcasting is evolving. Channels with only SD feeds are launching HD versions. From first to second line GECs… started with Hindi and now rolling to other languages. Similarly from first line movie channels to second rung ones. This year also saw quite a rush to launch FTA (Free to Air) channels. In most industries so many launches or re-launches would be a sign of high demand or some kind of a gap plugging. Let us check all indicators.

Do viewers need more choices, are they consuming more TV content?

BARC (Broadcast Audience Research Council, the agency that monitors and releases TV viewership numbers) analysis will show that on a like to like market and target group comparisons, quantum of TV viewing has actually gone down. If one were to extrapolate the BARC TV viewership data, the increase in the number of viewers watching TV is 10% while the quantum of TV viewing (GRPs- Gross Rating Points) has gone up by 8%. Therefore, relatively speaking, quantum of TV viewing has actually gone down by 2% compared to last year (Table A).

Do Advertisers want more channels?

Through personal interactions with many leading advertisers, I can tell you that no one wants new channels. Yes they want good content and good properties, but not new channels. If you look at the demand data (inventory sold, Table B), you will notice some startling facts. First, 61% of the available inventory went unsold until this October as inventory demand fell by 5% compared to last year. Secondly, most genres are selling less than 50% of their inventory. The table sufficiently argues that more channels are not required, at least from the demand perspective.

Does it help to have more channels for better subscription revenue?

A qualified yes. More channels mean television networks get better bargaining power with the distributors. But this is increasingly become theoretical. The idea is to make more money out of subscription revenue. However, if it were that simple, distributors would have themselves launched new channels. A recent case in point was a leading broadcaster’s foray into quality content with a Hindi Movie channel which in spite of good content fell flat as distributors did not agree to its la carte pricing. This year a lot of new channels either got launched or got converted to FTA with the intention of garnering mass viewership. Meanwhile, the government is not renewing the licenses of the FTA channels so where does it leave them?

Drift to whatever, whenever, wherever

A recent report by TRAI showcased how DTH active subscriber base growth has slowed down from 52% (Apr-June 16 over Apr-June 15) to 8% (Apr-Jun 17 over Apr-Jun 16). Compared to that the OTT user base had moved from 63million users in Aug’16 to 164 million users in Aug’17. As the drift moves to smart phones pre-embedded with OTT apps, low cost of data and the freedom to watch whatever, whenever, wherever, does it help the Indian broadcasting industry to launch new channels?

Laws of pure economics

It all boils down to demand for content and advertising. While both consumers and advertisers are welcoming good content (as we can see from the growth of time spent on Netflix as an example), question is whether it is via new channels? If not, then why are these channels being launched? Close to 70 new channels were launched this year (Table B), most of them in genres that saw no growth in viewership or inventory demand from advertisers. A few of these channels, mostly from the news genre, are more like mouth pieces of political parties, but what about the rest?

More channels means more supply. And supply not supported by demand, leads to price erosion in the long run. We can already see that in some genres. I won’t be surprised if the fire engulfs the whole forest sooner than we can imagine. 

Source: BARC. Available inventory worked out as per TRAI guidelines of 12minutes a clock hour for all genres except for News where it is taken at 20 minutes. We have assumed an 18 hour day, 6am to 12midnight as per industry standards.