The year 2009 was a disaster of businesses across the globe. Precipitated by a financial crisis which began brewing at the beginning of 2008, it turned into a full blown financial tsunami by the beginning of 2009. The rest is history. Businesses found their credit lines dried up, budgets were slashed, people fired, and the consumer spending boom which was had lasted a decade was finally over. The Pakistani economy, though somewhat insulated, because of the fact that half the economy is undocumented and not linked to the formal banking system, suffered brutally as well. Hyper-inflation and the massive reduction in purchasing power by the consumer coupled with the death of consumer finance as we had known it under Shaukat “Shortcut” Aziz has hit the world of advertising severely.
As companies try to balance revenue targets with their wilted advertising budgets, the clear winner has been digital advertising. 2009 has seen most intelligent companies invest in human resources somewhat familiar with the digital advertising coupled with increased exposure to internet advertising through various channels. While there is an absence of statistics in Pakistan, a snap poll of companies in this space reveals a growth of about 100% in 2009 over 2008 on various internet channels. Slashed advertising budgets have meant that brand managers need to get the bang for their buck and the oversight from the CFO’s office is immense. Unlike the good old days brand managers are being held accountable for every rupee that they are spending and this is a good thing. For a change companies need to think about their strategy and how they are going to make every rupee count as opposed to using brute force. I recall meeting the marketing team at a FMCG to pitch a Customer Relationship Management (CRM) system five years ago and how it was important to capture customer data and understand what the customer wants. The Director Marketing stopped my colleague and myself during the presentation and asked incredulously, “Why do I care who my customer is and what he wants? I have a marketing budget and a sales target. I spend all my marketing budget and make my numbers”. Thankfully that was five years ago. In 2009 even if someone thinks these arcane thoughts they are smart enough not to say them in public.
2010 promises to be even a better year for digital advertising in Pakistan. I say this for a couple of reasons. The first is that while we may have hit the bottom of the global economic meltdown, 2010 will remain uncertain and there are more hits which will affect the global economy especially in the financial sector. This will affect what and how companies spend on advertising and marketing. The second reason is that once you start driving a better car it is hard to trade down. Digital advertising and marketing gives the “client” complete transparency and access to more metrics than they have ever had before. The results can be viewed in real-time through a series of dashboards which are as easy to use as your email. The third and most compelling reason is the numbers which are now pretty serious. Pakistan has an online population of 20 million which is significant. The recent move by PTCL to offer 1 MB DSL connections for 300 rupees a month are the first of several initiatives to jumpstart DSL usage in the country. The availability of several wireless solutions at reasonable costs will multiply the number of users online. The fourth factor is precision. Unlike other mediums Internet marketing can be targeted precisely to specific target audiences ranging from age, gender, geographic location, and several other factors. Multiple unique campaigns can be run simultaneously each targeting a specific group. The fifth factor is the flexibility that a client has with digital marketing. From personal experience we have run digital marketing campaigns for customers who wanted to spend 50,000 rupees to customers who have spent over 6 million rupees. Imagine walking into a traditional agency and telling them you have 50,000 rupees as a budget!
But 2010 will truly be a better year for digital advertising as clients and potential clients become more educated with the medium; and that, in my opinion holds the key. Already some clients are questioning why they need “middlemen” who are not very knowledgeable about the digital space to interface with digital agencies themselves. A lot of clients are working directly with digital agencies and letting them run with the ball from the inception of campaigns to the actual execution. Clients are now talking about long-term strategies, roadmaps, and significant investments in the digital space rather than the usual agency “turn and burn” approach which was synonymous with a child with attention deficit disorder. As a channel digital encompasses the Internet, social media, and mobile phone users (through SMS and applications) – all three evolving every day. This requires depth not only on the creative side but also technically. A web designer cannot always code a site. Someone who works on CSS and DHTML will not have the skills to build an Iphone application. A mobility developer will not be able to optimize your web portal for searches. In the same vein artwork used for print campaigns cannot be copy/pasted on digital mediums. What has made 2009 exciting is that we are in the midst of a transition, and 2010 will see this transition go further into the transformation of the advertising landscape in Pakistan and bring us closer to the “real” world!
