Archive for June, 2015

Retargeted Ads Or Retarded Ads?

Friday, June 26th, 2015

B2C ad on B2B website

There are fewer things in marketing than retargeted ads on which my thoughts as a consumer are so diametrically opposed to those as a marketer.

For the uninitiated – or, in this case, the unchased – these are banner ads that follow you around on different websites after you’ve visited the advertiser’s website and left without signing up for a newsletter, making a purchase or otherwise failing to “convert”.

These ads are creepy, at least when you first encounter them. So much so that I once resolved to stop visiting websites that practised retargeting. That wasn’t hard in the early days when these ads were largely from B2C brands found on media websites, both of which I could easily avoid since there were dozens of alternatives in either category. But, over a period of time, as virtually everyone – B2C brands on B2B websites and vice versa – started doing retargeted campaigns, it has become impossible to keep my resolution.

Nowadays, I see Retargeted Ads even after I’ve made a purchase. This goes against the basic purpose of Retargeted Ads to bring back unconverted visitors. Therefore, they deserve the monicker “retarded ads” used by Ganesh Ramakrishnan, my ex-colleague and friend, to describe them.  

Now, that’s me talking as a consumer.


Amazon’s Retargeted Ad

In my professional life as a marketer, I find retargeted ads awesome. They consistently deliver excellent bang for the ad buck on many of my company’s digital marketing campaigns (click here to find out more). Quite often, retargeting gives us the highest ROAS of all digital channels we use (In case you didn’t know the term, Return on Advertising Spend is a very popular metric for measuring the effectiveness of advertising. For example, an ROAS of 30 means $1 spent on an ad campaign earns $30 in revenues). We’re not alone: Mr. Belson Coutinho, Vice President – Marketing, eCommerce and Innovations at Jet Airways, told us once that retargeting gave them an ROAS of 2X of their second-best online channel.

Given the awesome track record of Retargeted Ads, marketers will continue to use them even if many of their customers seem to hate them. I was even more sure of this when I saw retargeted ads used by Amazon, that pantheon of customer delight. That too, a mega-creepy version of it in which the banner ad got progressively updated with the picture of every new item I saw on subsequent visits!

That said, no brand wants to alienate its consumers for too long. Maybe it’s high time digital marketers finessed their retargeting campaigns in order to strike a middleground. I can think of at least two ways of doing that:

  1. With immediate effect, stop retargeting visitors who have converted. This shouldn’t be hard since all popular retargeting platforms like Google Remarketing, Bizo (now part of LinkedIn) and Vizury support this feature out of the box.
  2. In the medium-term, find ways to garner feedback on why consumers click or don’t click retargeted ads and use this input to enhance the IQ of their future campaigns. We’re working on developing a smart retargeting solution to help marketers do this at scale. Should you wish to steer the development of our product towards your specific needs and goals, please feel free to contact us.

I’m sure there are other ways for marketers to “have their consumer’s loyalty and eat their retargeting cake too” but, whatever they do, they need to ensure that consumers don’t confuse Retargeted Ads for Retarded Ads!

Dropping Price Is Not The Only Way To Sweeten A Deal

Friday, June 19th, 2015

Traditional retail aka kirana sell almost everything at MRP whereas modern retail aka supermarkets sell almost everything below MRP* (for the uninitiated, these terms are explained at the end of this post).

Since Indians are price-sensitive, modern retail should’ve totally cornered the Indian retail market, right?


Modern retail accounts for barely 7% of Indian retail sales. What’s worse, according to this Economic Times article, it “saw a sharp deceleration in growth rate to 5.4% in 2014 from 32% in 2012” whereas kiranas grew 7.1% during the same period despite a manifold higher size.

pharmacy01Even within modern retail, there’s evidence that price is not the sole purchase driver.

This was illustrated most recently by Wellness Forever and Religare Wellness, two pharmacies located bang opposite each other in my neighborhood. Wellness Forever sells at MRP whereas Religare Wellness offers a flat 11% discount. Despite the price difference, both attract just about the same footfall.

Day in, day out, there are ample indications on the ground that Indian consumers are responsive to offers, home delivery, free credit, mobile app ordering, etc., and that they’re not just swayed by price.

But, equally frequently, marketers make a lot of hue and cry that Indians only care about price.

This tendency is not restricted to B2C. Let me quote a couple of examples from B2B.


We were in the process of outsourcing our accounting process, which comprises of several steps from invoicing, payment, storing bills, submission of bank statements and entering the figures into a financial accounting software through to processing of ledgers, preparation of books of account, filing of tax returns and compliance statements.

We received 3-4 proposals from Chartered Accounting firms, of which we liked the one from the firm I’ll call “Acme Accounting” the best. While Acme’s price was a bit high, we were impressed by its professional approach and the feedback we received from its reference customers. We asked its Managing Partner if he could do something to “sweeten the deal”. The firm interpreted this as a request for discount, which it was not. Long story short, for no extra fees, Acme offered to carry out certain activities – collection of accounting material from our office, making a photocopy of the entire set, delivering the copy in a file – that were formerly in our scope.


telemarketerAfter completing the offering and content phases of our go to market work for a customer, we wanted to outsource the campaign execution to a third-party. We invited proposals from 3-4 leading appointment-setting companies. After a detailed evaluation, we selected a company that I’ll call Acme Campaigns. Acme offered 16 appointments per month and its price was way above our budget. Upon hearing our feedback, its sales manager explained the rationale behind the quoted price, which was a good thing and promised to get back with a discount, which was not a good thing. Because our customer had a small field sales organization and couldn’t have handled more than 6-8 appointments a month. The most appropriate quote under this situation was for Acme Campaigns to reduce its team size and deliver around eight appointments per month for a lower price than its original quote. Such a revised quote would have met our needs and helped us stay within budget.


Going by the above examples, price obsession is common to both B2C and B2B.

Which is a shame given that the seller’s arsenal has many non-price related tactics to sweeten a deal. As the above examples illustrate, these include:

  1. Free home delivery
  2. Deferred payment viz. free credit, longer repayment period to reduce EMI (Equated Monthly Instalment)
  3. Reduced price for reduced scope
  4. Higher scope for same price
  5. Rebalanced scope to reduce the customer’s total outflow.

As you can see, none of these alternatives are related to discount i.e. “reduced price for same scope”.

Despite that, since the din of “Indian customers are price-sensitive” doesn’t seem to be receding, I sometimes wonder if sellers are the ones that are more obsessed with price than buyers! Please let me know what you think in the comments below.

*: For the uninitiated:

MRP refers to Maximum Retail Price. This is the price above which retailers can’t sell consumer products in India. MRP is a more rigid implementation of the notion of MSRP (Maximum Suggested Retail Price) that is more widely prevalent in other countries.

Khirana is India’s version of mom-and-pop grocery stores.

DMART is India’s Wal-Mart viz. “Every Day Low Price” retailer. Other leading supermarkets are Big Bazaar, More, Spencer’s, Reliance, etc.

Wellness Forever, Religare, MedPlus – these are the leading members of the relatively new breed of organized pharma retailers in India – the equivalents of Boots, CVS, Walgreens, et al.

Will Millennials Bankrupt Neobanks?

Friday, June 12th, 2015

Many a neobank seems to be founded on the premise that Gen Y and Gen Z (collectively “Millennials”) are digital natives and prefer digital interactions to physical ones in everything including financial services.

Personally, I don’t find any serious shortcomings in the online, mobile or social media offerings from any of my traditional banks and, in sharp contrast, virtually every neobank offering I’ve come across is a little more than a leadgen tool. But that’s not the point of this blog post.

The point of this blog post is to do a reality check on the founding premise of neobanking.

First, a couple of personal experiences:

Example 1 

My tenant called me in the middle of the night, requesting me to pay his electricity bill immediately. He explained that he was traveling to the USA – where it was middle of the day – and hadn’t carried his credit card.

Example 2

I listed my apartment on, a leading real estate portal in India. Founded by a team of alumni of IIT Bombay, the startup bills itself as India’s first map-based housing portal. A potential tenant viewed my listing on Housing and called me to ask if my house was situated within 5 kms radius of his office and child’s school. (In case you’re wondering why I’m talking about a real estate portal in this context, Housing has been included in Finovate’s latest FinTech Unicorn List).


I was a bit intrigued with the aforementioned interactions. As Millennials, shouldn’t these guys know how to make an online payment without the plastic card in their hand or use Housing’s mapping feature to answer their own question?

Lest you think it’s only my tenants, let me share the following highlights from a few articles on this subject.

  1. Millennials are not as tech savvy as you think (Wall Street Journal article
  2. mwbn01Previous generations in India used to flock to “blade companies” offering 150-200 bps higher interest rates without bothering too much about the credit risks associated with informal and unregulated lending (see my blog post Calling B.S On Banking The Unbanked for more). While Millennials are attracted to tech-mediated versions of informal lending, they’re not able to get CIBIL – India’s equivalent of FICO – scores of borrowers and are reportedly pulling out of online P2P portals as quickly as they joined them. As a result, “borrowers far outnumber willing lenders” on these portals (Economic Times article
  3. An overwhelming majority of Millennials (73%) of Millennials wouldn’t consider a branchless digital bank (Converse of the finding “27% of Millennials would consider a branchless digital bank” from First Data’s report
  4. In some product categories, especially financial services, “consumers of all ages are still picking up the phone to talk to someone” (Digiday article

Millennials no doubt spend a lot of time on mobile devices. But that doesn’t mean that they’re savvy / comfortable enough to complete financial transactions or take financial decisions without some degree of physical interaction with objects or people. Some members of the digerati claim that banking is only data and can be completely digitized. Well, with my personal interest in fintech software, I wish that were true but a combination of personal experience and anecdotal evidence signals that customers see a lot more to banking than 0s and 1s. And, just because Millennials can do something digitally, doesn’t mean that they will do it digitally. mwbn03

Ironically, the very same demographic that neobanks are banking on – pun intended! – might actually prove to be their undoing.

Maybe it’s time they followed the advice of leading experts and widened their appeal to other market segments:

“There’s this obsession with millennials. The truth is millennials aren’t spending any money with anybody because they don’t have any.” (Forrester Research analyst Sucharita Mulpuru in Bloomberg article

Nimble as they pride themselves to be, this pivot shouldn’t be difficult for neobanks.