You’re more likely to reach the summit of Mount Everest than click on a banner ads. The next generation will consume most of their advertising content and entertainment on a mobile device rather than sit around watching television or reading a paper, so that’s bad news for advertisers. In many ambitious households in India, children and teens have very limited access to television, but reasonably liberal access to the internet “for homework”. This – with the ubiquity of smartphones and tablets – is giving rise to a new type of consumer who hardly sees TV ads, reads a newspaper or print magazine advertising. As for other formats, like YouTube, seems only 30% of users watch the full ads.
Clicking is not the only purpose of a banner ad – it also helps to create awareness of a product, and convey a brand image. The format does limit this to a very short, punchy communication which is still ok, because after being introduced to the product by the banner ad, the person comes to the showroom/retail outlet and finds out more.
But what about the evolving marketplace, where there are no showrooms or retail outlets? A recent Economist piece, “The Emporium Strikes Back” shows that in the developed world most retailers are dealing with dropping sales as consumers shop online. I discussed this in my earlier piece “The Future of Shopping”.
Which leads us to the theme of this article – if most of your sources of information are online, and you never go to a physical retail outlet, how should brands reach you? How can they tell you their story?
The answer is experiential. Many of the successful social media campaigns have been structured as entertainment or informational, not as an ad. These brands are building an integrated experience for the consumer, and hope that this association will lead to brand preference. A good example is Red Bull’s association with the Stratos jump – an excellent fit with “Gives you wings”. But this requires creativity, and investment – both of which are in short supply.
So the easier, cheaper option is to piggy back on an experience/brand association created by someone else. Like, say, Mickey Mouse. If you’re a parent, you’ve probably bought a product with a Disney character at some point. You probably have no idea who manufactured it, but assume that if Disney has endorsed it, it must be good. Your child, the end-user, doesn’t even think that far – if it has a cartoon character she likes, it must be good! McDonald’s Happy Meals have always relied on their partnership with a movie. Hello Kitty has a whole range of merchandize with the cutesy cat. Princesses, Hannah Montana, Ben 10 – there’s a character for every age and gender.
American firms have understood this and merchandizing has always been big business. Many Chinese firms have also understood this – look on aliexpress.com and you’ll see loads of products carrying a well-known character. You’ve never heard of either the firm or the online retailer, but hey, would Nemo sell you a dud? One of the few Indian firms to have tried their hand at merchandizing is Chota Bheem. But the real strength of these character endorsements lies in the fact that even obviously pirated goods bearing these pictures command a premium.
So you say, that works for kids, what about adults? Well, think of rock bands, movie stars, movies (Star Trek is a perennial favorite), sports teams – get the picture? (Sorry, couldn’t resist that pun.) Chennai Super Kings sold 1,20,000 items in FY13 to make Rs 14 crores which accounted for around 8% of its revenue.
But what about stuff that can’t carry a cartoon or logo? If you go by Sanrio’s experience (makers of Hello Kitty), there is no such thing – they have phones, cameras, toasters…But let’s assume that there is an audience that doesn’t want to have a ‘character’ on everything. Even this audience is susceptible to being associated with an experience or character, minus the actual picture. For example, when the actor in Bhaag Milkha Bhaag wears Adidas, the association might result in higher brand awareness and positive association. India, in general, is a collectivist culture where people strive to belong, and also has a strong admiration for celebrities (we even build temples for them), so this kind of partnership works particularly well.
If we rule out ads, then we’re going to see far more scenarios of brands being embedded into content. The distinction between paid and earned content will blur and then vanish – after all, movies will want to associate with ‘status’ brands (ie earned respect) in addition to making money for this as their ad revenues dry up. A classic example would be James Bond drinking Heineken (paid placement) in Skyfall, while his enemies and M were slurping up Macallan whiskey (unpaid). Macallan is said to have got more value out of this as the association was a better fit. (James Bond with a beer belly? C’mon!)
Here’s what I envisage in the future:
- Rise of product placements of all sorts in all formats of content.
- Content owners will not declare the distinction between paid and unpaid placements
- Rise of character placements in categories such as apparel, home furnishings & appliances, personal gadgetry, food & beverages, cleaning materials – typically low to mid-value products
- Celebrity endorsements for high value products (where character placement may be inappropriate)
As marketers, we need to start thinking about telling our brand stories without recourse to ads.