No gaon for our desi ad boys?

24 Oct,2013


By Ravi Balakrishnan & Amit Bapna


A decade ago, rural India was going to be the next big frontier for the ad business. Specialist divisions were announced with great fanfare, case studies and PowerPoint decks bandied about. They said a lot more separates urban and rural India than just geography – there were different spending patterns, media habits and mindsets.


Today, rural India still remains the next big frontier. Except this time around, many agencies are missing out on the action. In some cases like SMG’s Xpanse, the unit has ceased to exist. In others like Linterland and Anugrah Madison, there’s a dilution in focus.


It’s a shocking lapse at a time when the market has never seemed so promising. A good monsoon in 2013, the NREGA and an increase in white collar jobs has doubled or even tripled the spending capacity of the rural consumer. According to Rakesh Srivastava, senior vice president sales and marketing at Hyundai, “Rural sales helped us increase our market share to the highest point in the last 15 years even when the industry is declining.” He reckons rural markets will account for 20% of sales by 2014.


But Hyundai and many other marketers will try hitting these targets aided by a different set of partners (see Box: No Agency? No Problem). Barring infrequent salvos like GroupM’s Dialogue Factory, agencies regard the rural markets with a guarded wariness, or maybe weariness of an entirely different sort.


For one, they are tired of investing. In the heady days of the early and mid-2000s, it was easy to get funding from parent agencies or holding companies. Today, they expect returns. A tough call given the size and scale a good rural operation requires. For instance, Geometry Global (a combination of Ogilvy Action and G2) works out of 13 offices with 100 employees, 300 supervisors and 5,000 field operatives. Its president Rahul Saigal says, “You need to reach tens of thousands of villages. You need satellite offices in small towns, technology for monitoring, vendor connections and the ability to manage thousands of feet-on-street. An agency that cannot offer this has nothing to offer!” The investment has to be upfront and one cannot ride on a single client. And then there’s the cost to the marketer.


A rural marketing veteran says, “A two-plus reach (connecting with the consumer twice a year) would cost me nothing less than `18 crores to Rs 20 crores.” Ashish Bhasin, chairman and CEO, Aegis Media believes an equally serious problem is agencies not knowing how to run rural. He contends, “You have to recognise it as an ecosystem playing by separate rules and dynamics.” The ones who managed to make a success of it, according to RV Rajan, founder of Anugrah (later Anugrah Madison) are: “A few vendors who evolved into specialists with backward integration. They have their own fleet of vans, godowns and a dedicated staff.”


Also in short supply: insights and planning. And firsthand insight mining doesn’t come cheap. The lack of planning nous further alienates marketers. Anisha Motwani, CMO, Max Life insurance, observes, “Rural marketing has become synonymous with activation. It needs to focus on connecting the brand and the target consumer.” Agencies on the other hand claim they get paid not for the idea but only implementation. In their eagerness to merge with activation divisions, many have almost willingly relinquished ideation, even as they hire local vendors for their assignments. It’s not too great a leap for a marketer to reach out to these suppliers directly.


Some traditional agency folk argue that with increasing urbanization, rural marketing is getting less relevant. Even a firm believer in the rural markets like Sunil Kataria, COO sales and marketing Godrej consumer products contends, “There’s a top end progressive rural segment which contributes to a large part of consumption. It behaves a lot more like small town India.”


Finally, a large number of rural agencies have failed to come up with a model that can deliver a positive return on investment. Sandip Bansal, chief client and field officer at Dialogue Factory, says ruefully, “When you talk of rich experience, a marketing manager will flirt with it, but when the CFO says ‘no more money’ it collapses.” Dialogue Factory claims to be working on a new approach, one that its head – experiential marketing for Apac, Dalbir Singh describes as “physical, digital and social.” An assignment for one of its clients involves physically connecting with people, relying on digital technology to make them aware of a problem and finally engaging with an influencer to permeate the message into society.


WPP’s country head Ranjan Kapur believes, “Reaching people effectively will be less of a challenge with digital and mobile. You will see a spurt all over again.” Even Aegis is apparently readying to launch a rural practice. As Mr Bhasin puts it, “The approximate industry size is Rs 25,000 crore. I believe there’s Rs 15,000 crore spend that is incremental to this, accounted for by promotion and on ground which agencies don’t have even a .01% share of.” That’s the sort of money that should get the thinking caps on in a hurry.


No agency? no problem The dont’s of rural

Agencies may not like it but marketers from Ford to Karbonn are relying on their distributors and channel partners for rural marketing. These distributors work with local agencies and spread the brand message. Says Vinay Piparsania, executive director, marketing, sales and service, Ford India: “We do not rely on any agency and leverage Ford dealerships to grow closer to rural customers. Using the hub and spoke approach, more than 40% of our sales and service outlets help us target these markets.” Karbonn Mobiles built distribution from the district level up as opposed to MNCs who start with metros and Tier I towns and then go further down. Says Shashin Devsare, executive director, Karbonn “The 90% plus district coverage that we boast of today is a result of this strategy. Our key partners are over 1000 plus micro distributors who have extended the reach to even a taluka level today.”


The ideation on often comes from within an inhouse rural sales and marketing department. This is the true of, among others, Hyundai and LG (which admits to its rural sales outpacing those from the urban segment). These departments with a sharp focus on rural marketing and sales generate ideas that are implemented either by agencies or distributors.


Faced with the challenge of keeping the brand top of mind long after the activation is over, Hyundai is relying on positive word of mouth via Village Champions. These are typically influential people in the village who engage with potential customers beyond the inflection points of harvests, festivals and weddings.


Direct selling from home to home is in vogue again, according to Pratap Bose, COO, DDB Mudra group. While not the easiest option, given the demands it places on stock and cash flow management, some marketers believe it does better when compared to a rural promotion since it involves a direct one-on-one outreach.


Regional media have been quick to capitalise on the rural opportunity, with radio channels and newspapers offering marketers a package deal of media exposure and even starting activation agencies of their own.


Don’t Patronise

The tonality of communication needs to be right for rural audiences. Hyundai’s Mr Srivastava recommends it be simple direct and more social than aspirational: “They don’t prefer communication that says ‘you are the best’ and respond better to something that talks about spending time together.” This insight powers programmes like Hyundai Ne Bana Di Jodi a special wedding themed offer for the marriage season.


Don’t Make Assumptions

Several years ago, Kodak’s KP 100 slim camera was underperforming in Maharashtra. Mr Bose (who was then with Ogilvy) recalls, “When we visited we found they didn’t know how to take the film in or out! We spent two months educating them and sales went through the roof. A lot of rural is about touch and feel and seeing is believing.” Even (or maybe especially) in this day and age of high tech and apparently intuitive products, a demo could still go a long way.


Don’t Be Impatient

Godrej’s Mr Kataria cautions against expecting an immediate sales impact from a rural activation. He believes the seeding takes time since it is happening on ground and not on TV with a readymade reach and frequency plan. He recommends a medium term point of view of six months or so before one can gauge the impact. He says, “You shouldn’t get into rural if you want to do it for 30 or 50 days. You are just wasting your money.”


Don’t Flirt. Find A Larger Cause

Shankar Nath, head – marketing & direct, ICICI Lombard General Insurance recommends that brands integrate themselves in the rural ecosystem rather than merely adapting. Ms Motwani from Max Life adds, “To build long term sustainable models, brands need to find ways of adding value to communities. A rural initiative around a social platform helps significantly. Some such initiatives that come to mind are HUL’s Lifebuoy programme that focussed on prevention of infection and diarrhoea.”


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