Marketing through the recession:

is pay-for-performance advertising the silver bullet?

A Pinstorm-IAMAI Digital Marketing Roundtable

Pinstorm (and our partner, Lintas Media Group) along with IAMAI hosted their second event in a series of digital marketing roundtables titled – “Marketing through the recession: is pay-for-performance advertising the silver bullet?” on Wednesday, February 25, 2009, in Delhi.

This Digital Marketing Roundtable answered questions relating to the effectiveness of pay-for-performance advertising in these times of a slow-down.

Though Google started the trend of accountable search advertising, can it spread beyond that to all digital advertising, including banners? Should this be the model for TV and print? How do marketers see media spends in this era of unprecedented accountability? – These were some of the questions answered at the event.

This open-format discussion was led by prominent speakers like Hitesh Oberoi, Director & COO, Info Edge, Vineet Taneja, Head Marketing, Nokia India, Santosh Nair, Head, Strategic Marketing, NIIT, Parminder Singh, Business Head, Technology & Media, Google India, and Lynn de Souza, Chairperson and CEO, Lintas Media Group. The discussion will be moderated by Mahesh Murthy, CEO of Pinstorm.

During the digital marketing roundtable, the speakers talked about the various issues surrounding the advertising industry today, and how ‘pay-for-performance’ has emerged as a model of accountable advertising to give advertisers more bang for their buck in these times of a slow-down. Companies like Naukri have been continually increasing their digital advertising spends year-on-year to the point that their online spends are higher than their offline spending. The mood of the event indicated that digital advertising is going to take up a considerable amount of ad spend this year in India.

Vineet Taneja, Head Marketing, of Nokia India commented, “I think people search online, however, conversion to final purchase is offline. The theme that I am referring to is conversion at every stage of the market process. If we look at the first level of conversion, it is awareness to persuasion. At the second level, people go online, speak to their friends. In our category, people are experts, and word of mouth really counts, and this is the next stage of conversion.”

On the topic of using different advertising mediums, he went on to say that Nokia believed in exploring various mediums and making sure that those mediums deliver those conversions.

According to Santosh Nair, Head, Strategic Marketing, NIIT, any campaign that uses current news events for publicity must use information quickly and turn it around into results. “The shorter the gap between the advertisement, sales process, and turnaround, the better the results will be”, he said.

Lynn de Souza, Chairperson and CEO, Lintas Media Group talked of how the GoaFest of 2009 is concisely titled – ‘Don’t waste a good recession!’ She went on to say that there seems to be a mood versus a reality situation and we need to think about ways to combat – what we believe – is recession rather than sitting back.

She further stressed that the area of performance in online advertising needs to be looked at seriously in these times. “You have to focus on what you are delivering, challenge your current concepts of performance and only then can we debate on improving performance measures,” de Souza pointed out.

Parminder Singh, Business Head, Technology & Media, Google India observed that advertisers have started realising that the Internet is a multi-layered advertising and marketing medium, which one can experiment and mould. Different companies are exploring the medium in different ways – from user experience, to lead generation, and going all the way up to branding. According to him, “This will continue in the future, though there is fear of meltdown because the fact remains that the Internet is used by most consumers to do significant research.”
He further said, “In the last month, we saw 9 million searches just related to mobile phones and 6.5 lakh searches for DVD players in India.”

Hitesh Oberoi, Director & COO, Info Edge pointed out that on one side where television advertising brings visibility and credibility, the online medium is good for lead generation, transaction and inquiry.” He said that in 2005-06, they began spending almost half their marketing budget online. Print and TV had never really helped Info Edge get too many resumes, so they had to get aggressive on resume acquisition.

“We did a Rs. 5 crore annual deal with Rediff, which took a long time to negotiate. With that, our resume database suddenly went through the roof. The conversion rates were around 4%-5% of all traffic. It fundamentally changed the way we looked at advertising. Since then it has been at around 50% for the last three years.”

According to Mahesh Murthy, CEO of Pinstorm, one of Asia’s largest pay-for-performance digital advertising agencies said, “It seems pretty clear from the panel and the audience that pay-for-performance is here to stay. I am not sure how traditional agencies will take it, but change is upon us you can choose to evolve or be the dinosaur.”

The session was later made more interactive when the floor was later opened to the audience who participated in the roundtable discussion during the Q&A session. Sujata Datta, Senior VP, DLF Pramerica, Alok Bharathwaj, Senior VP, Canon, Mohit Heera, President, NIIT, and Cyril Mani of Sony were amongst the esteemed audience at the venue. The overall sentiment showed that buyers are looking at pay-for-performance seriously. The conference was well attended by CEOs and Marketing Heads with a mix of buyers and sellers.

The first roundtable, held in Mumbai on January 13, 2009 was led by Pradeep Shrivastava, CMO, Idea Cellular; Aekta Shyam, General Manager – Online Marketing and Technology, Taj Group; Rajiv Prabhakar, Vice President- Retail Business, Sharekhan; and Debadutta Upadhyaya, National Sales Head, Yahoo! India.

The press coverage for our earlier roundtable event held in Mumbai can be read on Afaqs!, Exchange4Media, Campaign India, AlooTechie or WatBlog. We have photographs and video too!

You may want to read more about the event on Exchange4Media or MediaNama or possibly view photographs of the event here or here.

Kailash Jain was an Ex-Pinstormer who quit Pinstorm when his family relocated to Bangalore. After having worked in a different company for a while, he has returned to us with a story to tell…

I came to Mumbai in September 2006 and joined Pinstorm: one of the fastest growing companies in India, where I worked for almost a year and half. It is here that I got to work on a lot of challenging work for the technical department. This was also the same place that gave me a 70% increment in my first ever appraisal. Having worked in other companies, I now know that Pinstorm is perhaps the only company that discusses business implications of the tools we develop in the Tech Department. We are also among the few companies that develop their own business tools internally on Open Source platforms.

In March, 2008 I had to leave Pinstorm due to my family relocating to Bangalore. Once there, I joined one of India’s leading online gaming portals as a software developer. During the induction session there, the CEO of the company was surprised to know I had quit Pinstorm.

From the time I shifted to Bangalore, I was always looking for new and challenging work, similar to what I did at Pinstorm. I planned to leave the company and was searching for other jobs in Bangalore when I realised that there is only one place I really want to be. I then spoke to colleagues in Pinstorm who agreed to have me back.

It’s great to be back in Pinstorm and I am happy to see that nothing else has changed apart from the number of people.

Here is wishing Kailash a very hearty “welcome back!!” from all of us here at Pinstorm.

The festival of lights – Diwali was celebrated across our India offices on 24th October, 2008 and in keeping with tradition, the workplace was decorated with traditional oil lamps, lanterns and rangoli – patterns made out of coloured sand.

In the Mumbai office, the day started off with teams enthusiastically decorating their corners; there was a prize to be won, after all! Everything from flower garlands to lanterns to festive lights was used and teams spared no effort in their prize winning objective to enliven the festive spirit.

The main draw of the day however was the Fashion Show, which everyone was looking forward to. The PinChicks and PinDudes were seen strutting down the ramp in all their traditional finery, even the bosses and the house-keeping guys got involved, which made the Pinstorm family event all the more exciting.

We have been on quite a recruitment spree since the last month and the new Pinstormers seized the occasion to entertain all who had assembled to dancing, mimicry and some more of the ramp walking. We must say that the current lot of new Pinstormers are quite sporty! All in all, it turned out to be a very happy day for all.

In keeping with this state of happiness, here is wishing all of you a very happy Diwali from all of us here at Pinstorm!

Images at gallery.pinstorm.com.

While in Mumbai, Guy Kawasaki graced the Pinstorm office today. Spoke about his most recent venture, his early days, and some tips among other things. According to him, “most US advertising agencies are just full of hot air”. He also said that he was “very impressed with Pinstorm’s Pay For Performance model” and that “most agencies in the US would go bankrupt if they adopted this model”. It was good to interact with you, Guy, thanks for all the fun. The Pinstormers will stay in touch!

Photos at gallery.pinstorm.com

Mahesh Murthy of Pinstorm will participate in a discussion organised by IAMAI on The Conference on Digital Marketing, to be held on 9th September ’08, at Taj Residency, Bangalore. His panel will discuss the allocation of ad spend between digital and traditional media.

You can find the itinerary for the rest of the event at http://is.gd/2lgF.