Pinstorm’s Mahesh Murthy spoke at the 140Conf in Los Angeles last month and we covered the reactions of his talk in an earlier blog post. While you can view his presentation there, checkout the video of his talk below:

We suggest you crank-up the speakers to max or listen in with headphones, the volume is a tad low on this one.

The festival of lights – Diwali was celebrated across our India offices on 16th October, 2009 and in keeping with our yearly tradition, some interesting events were planned.

Pinstormers in the Delhi and Bangalore office ushered in the Hindu New Year with a celebratory lunch. In our Bombay office, everyone was dressed in their traditional best. Desks were cleared and enthusiastically decorated with everything from flower garlands to lanterns.

The main draw of the day however was the Treasure Hunt, which everyone was looking forward to. The office was drawn into teams of 5 with clues at every turn. The team to crack all the clues first stood to win a prize. Food and much laughter was the order of the day.

Like we mentioned in an earlier blog post, this year has been kind to Pinstorm and we are seeing some interesting business opportunities coming our way in the next few weeks. All in all, the Diwali spirit has only sweetened the atmosphere for us all.

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

Here are some memories from the day:

It was five years ago this year that Pinstorm was born and a lot has happened since. What started off as an SEO/SEM firm has now moved on to become a full-fledged digital advertising company across 3 continents, and a family of 120 pinstormers. In the last five years, we got Red Herring’d as one of the Hottest Companies in Asia – all the three times we participated! We have been invited to speak all over the world – most recently at the 140Conf, the first twitter conference of its kind in the world. Some of our bigger clients include a telecom provider, arguably India’s largest private sector bank and a reputed educational university in Singapore among many others. We are building a brand and more importantly a culture which inculcates pay-for-performance, honesty and integrity.

The last five years have been kind to Pinstorm. We are perhaps the only digital advertising MNC in the world to be headquartered in India. After our offices in Singapore,Kuala Lumpur, New Delhi, Santa Clara and Bangalore,  it brings us great pride to launch Pinstorm’s first Europe office in Zurich, Switzerland this year. We are at Feldeggstrasse 49, so if you are ever in the area, drop in for a bite of chocolate :-)

Here are some of the photographs of the new place. That’s Christian Funke and Marion Walz you see in the pictures below:

It was nice to read about advertising firms cautiously moving to pay-for-performance advertising in The Economist.

At Pinstorm, we started out just over 5 years ago, on May 1, 2004 as a pure pay-for-performance advertising firm. Today, we’re probably the leading practitioner of the craft, with 8 offices across the US, Europe, India, Singapore, Malaysia and China. And we’ve worked  with HSBC, Jet, HP, Dell and other global brands.

We think there is simply no option to an advertising firm offering pay-for-performance. The other models are broken.

If an advertising agency charges a commission on a media spend, you know they have an incentive to get you to spend as much as possible. So they can earn as much as possible. But today, brands are built by outsmarting, not outspending. So you’re not likely to be the winner in this relationship.

But, hey, you say, we pay our guys a retainer. We’re not sure that’s any better. Paying a team a fixed price for their time, regardless of what they do with it is just as big a recipe for disaster. You’ll end up with with an agency that tries to just keep you happy, so it can retain the retainer. There’s no reward for great work that moves the needle, so to speak – and no penalty if an agency’s asleep at the wheel. This can’t be an inspiration to either party.

Pay-for-performance is the answer – one that many agency heads have fought for decades. Quoting from the article: "Some agency executives are sceptical about being paid for value, because it is so subjective. They interpret talk about value as code for cost-cutting." We completely disagree.

When asked to present credentials, most firms will talk about how much value they add – but when asked to measure that very value, you hear the bugles of retreat. And we don’t think it’s about cost-cutting – but quite the opposite, but more on that later. More importantly, marketers don’t have subjective measures of effectiveness. Their jobs are on the line if they aren’t able to convince their bosses and their boards that they’re objectively, measurably adding value.

The problem is different: with agencies fighting furiously to get business, commissions have dropped from the 15% level to about 1.5% today. And retainers aren’t going up – they went down in many cases in this downturn. With all this, the advertising persuasion has become an even more terrible business to be in. It’s not strange that after all these decades, there are no advertising billionaires, no ad agencies in the Fortune 500 – and because there’s really so little money in the business, it’s crazy difficult to attract great talent.

Pay-for-performance can change all that – it can bring MORE money into the business, not less. For starters, it helps advertising spend go from a fixed marketing budget to part of a variable cost-of-sale. And when that happens, the spends get uncorked. One look at why people have thronged to spend money on clicks from Google is because marketers love to pay for advertising performance of any sort on a variable basis.

More so, pay-for-performance lets you break away from creative straightjackets – your client isn’t likely to interfere with your ads as much, as long as you’re on brand, if you’re being paid for how your ad works. And you’re less likely to think first of what will impress the judges at Cannes, and more of what will impress your consumer, on pain of not getting your salary and bonus. Of course, sometimes, you might end up doing both, which is a fine thing.

Three, to repeat the point, it’s not subjective. All of us in the digital world have learned to live and die on the sword of how our ads perform. You may claim that you don’t have that power of objective measurement on TV or Print. We think you’re somewhat right here – but not for long. Soon all TV and all print – not to mention all radio, outdoor and other media will be delivered digitally, and there’ll be mechanisms to measure effectiveness in each of these – if there aren’t already.

And it’s not just about clicks, leads and sales. There are sufficient measures already to measure all these supposed intangibles when it comes to brand awareness, strength and perception. And for ad firms  to be paid according to these.

Comes the final argument – "Oh, we’re okay to take some part of our compensation as a variable, but hey we can’t walk away from our fixed income". Why so? This is probably more about your confidence in your art and craft than anything else.

At Pinstorm we’ve been 100% pure pay for performance from day 1, and we’ve managed to fund our own growth around the world over these years based on the monies we’ve earned. We go to more insane lengths than most agencies can imagine – we even pay for all of the media spend from our own pockets – and we bet every single day that our media investments combined with our strategy and our creative – all paid for by us, if you please – will make money for our clients and for us. And truth be told, often it does, though sometimes it doesn’t.

(We’re big believers in bundling, not unbundling media from creative. But that’s perhaps a different article, a different blog post.)

We’ll end this with an analogy – the traditional world of media commissions is like the world of stock brokerages – a commodity offering where growth comes from buying market share by offering lower fees. The creative side of agencies, paid on a flat-fee basis are the stock-recommendation analysts, on salary with no responsibility for the success or failure of their recommendations. Both these segments are but a small part of today’s financial landscape. Right for some investors, but not all.

In that vein, we’re probably the mutual funds, the portfolio managers, the hedge funds or even the venture capitalists of this world, if you will. And I posit that it’ll be firms like ours or those after us that can open up this landscape and bring a lot more growth, vibrancy and innovation into the world of advertising and marketing. Yes, we will have our market crashes; yes, we will have our boom and bust cycles. But marketing and advertising are far too important activities to be left to some combination of media commissions and flat fees.

Of course, I’m curious now how the people at The Economist think they’ll charge for advertising now and in the future. :-)

Mahesh Murthy
Founder, Pinstorm.

We created a questionnaire to find out about users views about the mobile phone operators in India. We wanted to find out what according to the users were the strengths, shortcomings, and opportunity areas for each operator.

We posted the survey on Twitter and were glad to receive 151 responses. We believe the responses are a fair indicator of the questions asked in the survey.

What we found surprising was that 46.6% would keep the current phone number but change the operator if they could!

As promised, here are the unedited results of the survey, ‘Indian Mobile Phone operators: Your views ’. Click on the images for a larger graph:

Also, thanks to the following people for helping us spread the survey on Twitter: @Maheshmurthy, @Netra, @Asfaq, @Digimouth, @sandiipporwal, @premsankar, @crucifire, @rajamanohar, @Sumeet, @pujamadan, @shefaly, @sachinuppal, @PixTV, @tanushreebaruah, and @rahulvarshneya. You can follow us here on Twitter: @Pinstormer.

For more details, feel free to write to us at info@pinstorm.com.

*While the data from 151 entries suggests that half of them will switch to a different provider when Mobile Number Portability is introduced,  the data cannot be extrapolated.