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BW Businessworld

How CRM Is Becoming The 'New Advertising'

Advertising will use more and more data intelligence as a foundation going forward. Hyper-personalisation will be how advertising will be deployed by brands

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Over 89 per cent of Google's $69 billion revenues come from advertising. That's the nature of transformation the traditional advertising business is going through with advertising spend mix undergoing a massive shift over the last many years. Advertising is moving into a 'data-driven precision marketing' business.

Let us put this in context of the some top three trends:

Trend#1: The global advertising spend is close to $579 billion dollars and is expected to grow at 4.6 per cent in 2016. What this means is that Google's share of global advertising spend is only just about 12 per cent and there is a huge headroom for growth. This is only expected to grow at a rapid pace outgrowing the traditional media. The way advertising will reach consumers is set to change rapidly with more targeted and contextual advertising media.

Trend#2: The overall mobile population is increasing phenomenally. There are about 7.6 billion mobile users out of which around 4.7 billion are unique users. More than 90 per cent of incremental 1 billion subscribers are expected to come out of the developing world by 2020. And the number of smartphones is expected to increase to 2.6 billion by 2020. This means the entertainment device of the past era - television, will be replaced by the mobile phone in the coming few years.

Trend# 3: The mobile internet subscriptions are expected to reach a whopping 6.4 billion by 2019. If you consider how this has shifted - about a decade back in 2010 - the number of mobile internet subscriptions was just about 0.50 billion and this is expected to reach 6.4 billion in 2019. The clear implications of this are in the way consumers will consume content and connect with each other, and this will undergo a huge shift. Advertising will feel the impact of the 'network effect' of this new paradigm.

Advertising is moving from 'Prime Time to My Time'
The past few decades of advertising was all about aggregating and reaching audiences around what was called the prime time. It was massively cost effective to reach audiences during prime time as effective reach and frequency builders helped build brand awareness and drive purchase intent. Today, with proliferation of multiple devices at homes, penetration of mobiles and internet, advertising is able to reach to an 'audience-of-one' - One person at a time, one message at a time and one engagement at their behest. This is where CRM techniques converge and meet with advertising. The world of technology has now made it possible. Therefore, the 'prime time' is shifting to 'my time'. What the consumer will access, watch and engage must be architected to the 'customer-of-one' eco-system.

In the past era, television aggregated audiences through their programming - at certain time slots, during certain hours of the day, on certain days of the week etc. In the coming era, the mobile and internet is disaggregating audiences through programming - at My time slot, during My hour of the day and on My day of the week.

Advertising - In the age of the dumb static devices to intelligent dynamic devices
The way we have always known television was - it is in the living room, and is pretty much static. The mobile however is very different - it moves with consumers in their pockets, it knows when consumers access it, it knows where exactly consumers are, and therefore, the way advertising messages must be delivered to consumers is way different from that in the era of a single message, repeated multiple number of times. Imagine if the customer was sitting at home vs the customer was in the mall or market - the advertising message can now be a lot more different, contextual and engaging. The advertising message itself is no more limited to large format single TVCs but builds around a lot more contextual content which combines the power of knowing the consumer and the various access points, thus creating engaging content based on consumer clicks and intent.

The world of CRM had known these tricks for many decades through customer data, customer purchase patterns and customer segmentation driven engagement. The world of advertising is now adopting these methods as this has now become scalable and is done in real time. The need to fuse offline and online data will become a game changer for many companies. The ROI on advertising will increase multi-fold when this transformation begins to happen.

The new CMO - Moving from unknown audiences to known audiences to known customers
The CMOs of tomorrow need to be an orchestrator of fusing offline and online advertising rather than treating the two as silos, and in addition, they must use and leverage customer knowledge, behavioural data for richer customer insights. They will need to allocate their marketing spends not just around customer acquisition but a lot more around audience and customer retention and engagement. They need to embrace technology and use technology in their marketing operations. They will need to move their advertising messages and customise them for unknown audiences to known audiences and known customers. They need to embed CRM thinking in their advertising. This requires a huge shift in mind-set and adoption of technology tools amongst product and brand managers, media and marketing research teams within the clients and agencies. The advertising of the past was 'Message-Repeat' but the advertising of tomorrow is 'Message-Know-Customise-Engage-Repeat'.

The New Advertising Manifesto - Datavertising
Advertising will use more and more data intelligence as a foundation going forward. Hyper-personalisation will be how advertising will be deployed by brands. Advertising will start to use richer data sets - email addresses, browser preferences, website history, mobile app preferences, social data, device data location and correlate these data chunks with consumer behaviour and purchases across channels to build actionable insight loops. In the future, brands need to think of advertising as services and content. Traditionally, advertising was used only as a pre-acquisition tool, but with data about customers becoming available, advertising will need to play a key role in guiding the purchase process as much as in post-purchase relationships. What advertising needs to learn to do is to make 'intangible propositions' for brands into 'tangible propositions'.

If brands want to build positive predisposition in the future, they need to learn to use advertising to influence one-customer-at-a-time. They need to learn the 'art of connecting' across media, build context through customisation, and create content to help the customer through their buying and ownership journey.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Tags assigned to this article:
advertising CRM company consumer opinion

S. Swaminathan

The author is CEO and co-founder, Hansa Cequity

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