More Promos, less Ads; 'tis the future

I am surprised that it took a bout of depressed consumer spending for marketers to allocate a larger chunk of their communication spends to promos. Note, this comes at the cost of advertising. Promos deliver greater value to the consumer for the same buck.

Therefore are consumers now supposed to feel cheated about what they got for the price they paid in the past. In fact are they in the first place supposed to have contributed their money to the ludicrous payments that went out to Dhoni and company? Now that the consumers has cut back on spending, brands are willing to cut Dhoni and Co. out of the brand building act?

With the festive season round the corner, below-the-line (BTL) activities seem to be the buzzword in every marketer’s lexicon. Around 32-33% of the total promotional budget is slated to go towards BTL promotions this year, say analysts. In future, this, according to experts will reach a ratio of 70:30, where 70% of the marketing spend will be geared to promos.

The only good that's come out of this scenario for the consumer, is him getting to know what a brand's actually worth in terms of the money that needs to be spent, to possess it.

Well, three cheers to that.

Comments

Sean said…
Prof.
I dont know if you have read the book "The origin of brands" by "Al & Laura Ries".

In this book he talks about 2 theories of lauching a brand: -
Theory A - Also called the aeroplane launch is about brands like Microsoft WalMart RedBull who have gradually come to be the brands they are today.
Theory B - On the other hand brands that shoot up like a rocket-ship are usually turn out to be fads like Crystal Pepsi.

Both theories compare PR to advertising. I agree with you when you say that advertising is on its way out. Credible brands are built over time and in todays world where the consumer wants the best service and personal attention i think PR plays a very important role. Changing trends show that PR is the way of the future.

Unlike before where PR used to part of an advertising campaign the time has come to reverse this trend and make advertising a part of PR campaigns.

Please let me know if you agree with my views or not.
Vipul said…
prof.
i partly agree with your post that expenditure on advertising in India is reducing, but would also like to add that this reduction in advertising by companies is only as a percentage of their total spending on the various promotional tools. On an annual basis the advertising industry in India is growing at a rate of 10-12%. I agree that the emphasis laid on advertising by companies has reduced but advertising will always be a very important tool for creating awareness about the brand. i feel even big companies need to advertise quite heavily on a regular basis as there is an increasing amount of competition in the market and consumers, in the case of most products, are not brand loyal.

Your views on this would be appreciated.

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