Executives at Godrej Consumer Products were struggling to find ways to make the company's premium hair colour brand Godrej Expert Rich Creme relevant to buyers, when a sudden tweet by filmmaker Karan Johar came to their rescue. Johar had posted a picture of his grey look, with a caption on how the lockdown had made him ready for 'father' roles. Godrej's hair colour team reached out to Johar and requested him to shoot a video of himself colouring his hair and post it with the #ColorLikeKaran hashtag. Godrej Consumer Products, which contributes a large part of the group's total revenues, was grappling with Covid-19 and its impact on the balance sheet. Johar's video got seven million views on Twitter.
Godrej Consumer Products Chief Executive Officer, India and Saarc, Sunil Kataria, did not disclose if Johar's video increased sales of hair colour, but it managed to make DIY (do it yourself) hair colouring fashionable, and a host of similar videos popped up on social media platforms.
It was the 'moment of truth marketing' straight out of books that Kataria had studied decades ago. It also showed the power of digital media. "We engaged with consumers with a product like hair colour, which is of least importance to them during the lockdown. Our effort was to make hair colouring part of the consumer's new habit by encouraging him/her to DIY (do it yourself) at home. We did all of this on social media. If a brand can become a habit, it will be the ultimate prize for marketers," says Kataria.
The Digital Native
From binge watching originals on Netflix and Hotstar to short videos on Instagram and Facebook, and from consuming news on Twitter to taking lessons in cooking and Zumba dancing from YouTube, the lockdown has made the average Indian consumer a digital native. If there is one major takeaway for marketers from this period, it is that digital can no longer be an after-thought in brand-building strategies.
"Earlier, digital engagement used to be for a certain period of time and for a few brands. Be it Maggi, Nescafe, KitKat, Nangrow or Ceregrow, all our brands are enjoying the benefit of our digital-first strategy. This is the play we will be using for a long time because consumers will be digitally far more active than before," says Nestle India Chairman and Managing Director Suresh Narayanan. From a mere 6-7 per cent pre-lockdown, the company's digital ad spend is now at a high single-digit of its overall media expenses.
In fact, digital media spends, at 20 per cent of the overall Rs 68,475-crore advertising pie before Covid, have increased by 10-15 per cent during the lockdown period, and are likely to be as high as 35 per cent by the end of 2020. While sectors such as automobiles were already spending a considerable amount on digital marketing, the virus outbreak proved a catalyst for traditional FMCG companies and other sectors as well.
The Indian advertising industry has seen a 60-70 per cent dip in revenues, especially on traditional platforms such as TV and print, while activities such as outdoor activation and live entertainment have come to a standstill ever since the lockdown began in March. While marketers can't afford not to have a digital-first strategy anymore, they are still learning to adapt to new consumption mindsets.
Traditionally, marketers increase expenses in a recessionary environment to improve connect with consumers. Not only is media inventory more affordable during a recession, it also gives brands an opportunity to raise their voices and push their not-so-strong competitors (who don't have the wherewithal to advertise) to the fringe or even acquire them. But, Covid-19 is different. Unlike a typical recession when consumption dips due to fall in demand, this time, there has been a massive supply crunch as well. In a recent white paper on the virus outbreak, Les Binet, noted marketing expert and Head of Effectiveness, adam&eveDDB, a communications agency, has called the pandemic a war-like situation, where the normal rules of marketing and business doesn't apply. "If demand is the problem, advertising is an obvious solution. But if people can't buy or use your product right now, then the role of advertising is much more limited," says Binet.
A Whole New Game
The pandemic is set to alter the basic principles of marketing and brand building. To begin with, it has completely transformed the consumer's mental model, says Kataria. "The consumer's life, the way he/she consumes, the concept of leisure, work, in fact, the model of happiness itself has changed. This is not an ordinary situation where one can say that everything will be back to normal post the lockdown. Some habits may go back to what they were earlier, but a lot of them will not be the same, and marketers will need to morph their strategies accordingly."
One of the most obvious changes is people staying indoors, working from home and also entertaining themselves at homes. Socialising at cafes or parks is now a thing of the past, and so are weekend shopping at malls and movie watching at multiplexes. From birthdays to wedding anniversaries, people are finding ways to celebrate special occasions at home and get friends and extended family be part of the celebrations virtually. In fact, virtual video communications platform Zoom grew traffic from 10 million participants a day in December 2019 to 300 million in April 2020. The big fat Indian wedding has now become thinner as well, with new social distancing norms restricting gatherings to 20 people. Even air travel and holidays will never be the same again. All these changes are here to stay and so companies have to rejig their brand architectures to stay relevant. For example, over 15-20 per cent revenues of brands such as Nestle or Amul come from institutional sales, and they are coming up with more cooking options at home.
Anxiety around health and job losses are also affecting consumer behaviour. According to a Deloitte report, 36 per cent of Indians are still very anxious about the future. Around 76 per cent are worried about their health, 80 per cent about their family's health, almost 45 per cent are concerned about their ability to pay EMIs and 57 per cent are anxious about job losses.
"Some of these are going to immediately impact consumption if you look at it from the lens of a marketer. The engagement of consumers as a consequence of this is going to predominantly drive engagements with brands," says Ajit Kumar, Leader, Customer and Marketing, Consulting, Deloitte India.
Malls and high-street retail stores have opened in most places, but have been able to attract only 20-30 per cent of their pre-Covid footfalls. Eating out and watching movies are still a while away. Fear of pay cuts and job losses have led consumers to down-trade. The average consumer is seeking value products like never before. "The focus is on consuming essentials? People are seeking value and are looking at smaller packs. Popularly positioned products and affordability are becoming important. They want to conserve the last Rs 10 as hedge against the future," says Nestle's Narayanan.
There will also be limited uptake in categories such as apparels and beauty products since work from home is here to stay. Covid has taken offices, meetings and socialising to virtual platforms. Consumers no longer feel the urge to buy clothes or shoes. So, while food and personal hygiene brands have a natural advantage by virtue of being essential products, a lot of other brands, which are in the not-so-essential category, will have to strive to make themselves a part of the consumer's new preferences.
Royal Enfield, for instance, is using its digital platforms to get bike enthusiasts share anecdotes. The auto sector was going through a slowdown at least a year prior to Covid-19, and the pandemic added to its problems. Massive job cuts and pay reductions have reduced buying power of consumers significantly. "We are getting bike enthusiasts to share their Royal Enfield story on our social media platforms. Our social media fan following has gone up by over 30 per cent during the lockdown," says Shubhranshu Singh, Chief Marketing Officer, Royal Enfield. "We will surely come back with more gusto, but for the time being, we will need to cater to our consumers by understanding the changed circumstances. We will also offer them easy finance options," he adds.
The Trust Factor
Just like in case of individuals, trust is a major factor in brand building as well. During a crisis, consumers depend on brands they can trust. How a brand behaves may have a bigger effect on perceptions than advertising, especially if ad budgets have been cut, points out Binet of adam&eveDDB, in his white paper.
Most brands are doing their bit to win consumers by assuring them about quality and hygiene standards - from manufacturing to last-mile delivery. "What are you, as a brand, doing to help the situation? Are you doing something for the people who are not able to afford food and essentials? In this state of anxiety, it is natural for consumers to engage with a brand that is helping find a solution to the current situation," says Kumar of Deloitte.
Shashank Srivastava, Executive Director, Sales and Marketing, Maruti Suzuki, says the automaker's focus has moved from brand-building and selling to showing greater care towards the society during this time of crisis. "Messaging around selling may not gel well with consumers in current circumstances. If the tonality of communication reflects authenticity and care for society, sales will automatically pick up when times are good."
Consumer durables brand Panasonic is trying to strike a chord with its target audience by promising a better life and a better world. The pandemic has forced people to live indoors and made them realise the importance of having gadgets such as a microwave or a dishwasher that could help them strike a balance between their profession and household chores. "Our vision is to create aspirational products which will help our consumers multi-task, and at the same time be cost-efficient and energy-efficient," says Panasonic India Managing Director Manish Sharma.
"Survive, Revive and Thrive is the mantra. You need to first survive as it is not a scripted crisis. Everybody is finding new ways of going ahead... Perhaps a newer way of working will enable us to revive, and if you do this you will thrive," says Madhukar Kamath, Chairman Emeritus, and Mentor and Chairman, DDB Mudra Group.
The trust factor extends to influencers as well. Brands are relying on micro-influencers, who are more relevant now than ever before. Consumers are looking for realistic assurances, as opposed to tall claims by celebrities. So, if a neighbour has ordered grocery on Amazon and received timely delivery, one will also order on Amazon.
"The principles of brand building will continue to be the same. However, the context has evolved today and therefore the task for each brand immediately will be unique and different," says Anusha Shetty, Chairman and CEO, GREY Group.
Digital was always the future of business, but a number of companies were reluctant to make the transformation. The lockdown and the change in consumption patterns have forced brands to include digital as a 'must-have' in the new normal. "E-commerce was already a significant development before Covid-19. The crisis has just given it a fresh impetus. Similarly, the role of digital in a brand's communication plan was increasing already and with certain traditional media being hampered by the lockdown, the share was bound to increase. Our narrative with advertisers was already changing. From making the 30-second ad for TV to providing a holistic and integrated approach and intervention through the entire consumer journey - from the consideration stage to last-mile delivery through e-commerce - delivered seamlessly. These conversations will gain momentum," explains Tarun Rai, Chairman and Group CEO, Wunderman Thompson.
For example, a person buying a car will have to go through 28 touchpoints before he completes the transaction. "You go to a showroom to see the product, you compare it with other brands, you go to a blog to find out how the product is, you go for a test drive, arrange for finance, etc. While one part of digitalisation is communication, the major part is the need to digitalise all other aspects to give a seamless experience to the consumer. This means the OEM should have a platform which makes it easy for consumers to engage with the brand, even at the process when a consumer is comparing products," explains Maruti Suzuki's Srivastava. The car maker was spending almost 34 per cent of its marketing budget on digital platforms pre-Covid, which is likely to increase to 45-50 per cent going forward.
Digital transformation for apparel major Raymond, on the other hand, has been aimed at offering an omni-channel experience to consumers. With buyers shying away from stores due to fear of contracting the virus, an omni-channel presence has become mandatory, says Shantiswarup Panda, Chief Marketing Officer, Raymond. "The idea is to make the brand available at our stores, on e-commerce platforms, as well as on our own website, so that consumers can buy both online and offline." The brand has started sharing e-catalogues on WhatsApp. They can select the product, which will be delivered home.
With online shopping suddenly getting a leg-up, consumer durables major Godrej Appliances is helping its network of 25,000 traditional dealers get their own e-stores. "Dealers are now able to direct customers from WhatsApp to Facebook pages, where they can see the products and shop. Since many consumers are looking for a contactless experience, we have also created videos of product demonstrations that dealers can send to their customers," says Kamal Nandi, Business Head, Godrej Appliances.
Consumer insights play a major role in crafting a perfect marketing plan, but in the Covid era, face-to-face communication is an issue. "Consumers are not coming out of their houses, or meeting unknown people at their homes. We are asking agency partners to come with virtual models to test ads with similar accuracy as in a physical interface model," says Kataria of Godrej Consumer.
Covid has also made businesses far more agile. George Koshy, Chief Marketing Officer, Marico India, claims that most of the company's recent digital campaigns have been made within 10-12 days. "In a normal cycle, it would have taken one month, but right now, speed is of essence," says Koshy. Marico has set up its own digital studio. "Having an agency within our own team reduces the response time. Each time we launch a new product or campaign, we need to come up with 500-odd creatives. Having an internal team gives me the flexibility to make alterations. I can change my creative three times a day," he adds.
M.A. Parthasarathy, CEO, Mindshare, agrees that the pandemic has brought about rapid behaviour and habit changes, forcing brands to be on the edge all the time. The media agency has created a dashboard that constantly throws up data on consumer behaviour. "The dashboard gives diverse and disparate data on advertising trends, air pollution, mobility, search patterns and social buzz. It enables us to study trends in one market versus the other. We kickstarted this because of Covid-19, because the pace of change each week is so different."
So, how will the role of a traditional creative or media agency change? After all, it is consultancies such as Deloitte, Accenture or EY, which are known for cutting-edge digital marketing solutions. "We earlier called ourselves communications consultants or marketing investment consultants, but now we have to think about the business at large," says Parthsarathy of Mindshare.
For instance, at the beginning of the lockdown, when the distribution network of most brands had come to a halt, Mindshare, claims Parthasarathy, had helped clients partner distribution platforms such as Swiggy and Dunzo to ensure their products reached consumers. "Enabling of distribution is something we wouldn't have done pre-Covid," he says.
In fact, Ashish Bhasin, Chairman, Dentsu, says it is high time agencies bring in consulting efficiencies, and ensure they get paid fairly for their time and services. "Large consulting companies or even lawyers don't do anything for free. In advertising, we never thought that way, and as long as the market was growing at 10-15 per cent year-on-year, it didn't really impact us. But with pressures on costs increasing by the day and growth slowing down, we as an industry need to be more prudent."
Aditya Kanthi, CEO, DDB Mudra, admits remuneration is a challenge and contracts with clients are getting revised. "All good agencies need adaptability and agility in order to thrive. Clients do value scale, yet they expect agility."
Kumar of Deloitte believes building a tech capability for an ad agency is going to be a big shift, for which they need to make bold moves in terms of acquisitions. Over the years, Deloitte has developed products such as Rapid Commerce, which can get any business online in a few weeks. In the past few years, agencies have gone shopping to add to their digital capabilities, essentially in the space of marketing communications.
Marketing and Branding Expert Alpana Parida expects consulting firms and communication agencies to merge going forward. "There has been a lag between business consultants who are mostly product-centric, while advertising and branding agencies only understand consumer behaviour. If the two merge, they can offer far more holistic services."
There is no doubt that coronovirus will bring about a huge shift in the way brands are being built. Digital will surely take the driver's seat. Shashi Sinha, CEO, IPG Mediabrands India, however, has a word of caution. "This is the time for digital to look at measurements, else it will be a short-term gain," he says.
The disadvantage that digital media currently has is the lack of a uniform measurement tool. If the industry doesn't put its act together, brands will be sceptical to invest in digital. After all, in the end, it is all about returns.