Traditional Marketing Vs. Digital Marketing? The Dilemma Of A Mass Brand

An FMCG professional with 13 years of experience in brand management, product development, consumer engagement, channel management, and sales & distribution management spanning across diverse categories & geographies.

Marketing is an ever evolving field with a core underlying objective - to create desire. Every now and then a new wave of change interrupts the market, pushing the marketers to rethink their strategies to reach out to the consumer. The latest wave on which the world is riding right now is the digital marketing. How relevant is it to India and how does it alter the scales of traditional mass marketing (TV, Radio, Print, magazines, and more), especially in the FMCG (Fast moving Consumer Goods) sector.

What is FMCG?

FMCG is the 4th largest sector of Indian economy at approx. 3.65 lakh crores of consumer spend. Growing at 7 percent per year(Source: IBEF'18), it is considered to be the backbone of consumption sentiments of an economy in a developing nation.

The products are characterised by frequent purchase, (relatively) low involve-ment during purchase, low price and quick (ready daily) consumption. These products are physically made available through kirana stores across India backed by a complex distribution network. Simultaneously, FMCG companies also create consumer pull through marketing across various communication mediums. So it is a fine balance between mental availability and physical availability. Due to massive scale and scope of its products, FMCG marketing accounts of 1/3rd of total marketing spend on traditional media. And that makes the views of FMCG marketing towards selection of a communication medium critical for its growth.

The Rise of Digital Marketing

Globally the marketing spend has noticed a shift from traditional mediums to the digital world. It is estimated that in 2019 at $333 billion, digital marketing spend will account for roughly half of the global ad spend. (Source: emarketer, Feb'19). Going by Marketing Charts report, digital advertising in the U.S. is now a $30 billion larger market than TV advertising.

India, which took the giant leap in its smartphone reach as well as the cost of internet (at $0.26 per 1GB of data, India has the lowest cost of internet as per a study conducted by across the globe), also seems all set to follow course. The internet is growing fastest among all mediums and now has a reach of 29 percent ahead of other conventional mediums like Magazines (5 percent) and Radio (20 percent) (Source: IRS Q2'19).

Relevance for Mass Brands

While digital is growing, TV continues to have the highest reach among all mediums in India at 76 percent providing high penetration in both urban 90 percent (against 44 percent of internet)as well as in rural markets 70 percent (against 22 percent of internet)(Source: IRS Q2'19).

The BI-2018 survey also notes that the number of individuals with access to television has gone up to 835 million. In contrast, smartphone penetration in our country is still at around 300 million. Moreover, the internet population is largely skewed towards male (60 percent) which makes it difficult to reach out to the female TG which is the primary TG for most of the FMCG brands /categories.

Digital marketing will play a bigger role but relevance of mediums and maintaining a balance between short term and long term objectives is critical

Barriers that a Medium has to Overcome

TV leaps over the barriers of literacy, digital literacy, affordability and gender skew. In fact, in most Indian households, control of TV remote is still in the hands of the housewife. So traditional media continues to be more relevant for mass FMCG brand marketers for most of the categories both from the TG relevance and cost per reach point of view.

E-commerce Driven Growth of Digital

The growth in digital can take leap once e-commerce starts playing bigger role in FMCG buying since digital marketing + ecommerce can ensure ad view to sales with click of a button. However, FMCG sales through e-commerce is still at its nascent stage (1.3 percent of total FMCG sales as per Nielsen). The underlying reason is the vast network of 1.2 crore kirana stores within stone's throw distance of a regular household. It is these stores that differentiate Indian FMCG from the rest of the world.

Add touch & feel experience, zero delivery fee, easy return/exchange, phone call based order, warm relationship with the retailer, credit offerings and it crystallizes as to why e-commerce still has a long road ahead.

The Growing Relevance of Digital Marketing

We are already observing a rise in digital marketing for niche and youth focused brands where there is an unfaltering departure of the TG from TV towards digital entertainment. Another case in point is affordability due to targeting. Since mass media is effective only beyond a threshold spend/reach, digital marketing is a great tool for brands to reach out to a specific set of consumers with optimum spend. This not only reduces the overall cost of the campaign, but also increases the chances of conversion due to better targeting.

Even for mass brands, digital is playing a critical role in bringing the brand story alive/extended through digital screens (beyond 20 sec TV spots) Brad Simms, president and CEO of Gale Partners says, "There's a real opportunity in 2019 for brands to tell sequential stories across different media platforms in a progressive fashion".

Progressively, digital marketing will play a bigger role but relevance of mediums and maintaining a balance between short term and long term objectives is critical especially when a marketer is answerable for return on investment (ROI) on each rupee spent.