Saturday, September 03, 2011: 02:43:43 AM

Retail Guest Column

Increasing small retailer advertising by creating performance based advertising models - Kunal Jain, Buzzr

In spite of the growth of the retail industry, smaller retailers continue to shy away from traditional media for advertising and marketing purposes

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Retailing is a very popular form of business in India and accounts for 13% of the country’s GDP. However, majority of smaller Indian retailers do not conduct broadcast advertising on print or display media. With low barriers to entry, digital marketing and social media are gaining traction with even smaller retailers in India and performance based models like the one used by Just Dial have seen rapid adoption by small retailers around the country. This means that unless they innovate, traditional media channels like print are going to find it even harder to convince smaller retailers to utilise their inventories. One way that channels like print and outdoor can increase participation by retail advertisers is by adopting performance based models for utilising advertising budgets that charge on response rather than estimated impressions.

 
In digital advertising, an online retail store receiving traffic can implement analytics to track the source and performance of that traffic. Because of this, leads and sales can be attributed directly to exposure due to a marketing campaign and the advertising mediums can be compensated based on this performance. Performance based advertising in traditional media has not worked because of the lack of interactivity of the media. Since there is no direct link between a non-interactive advertising medium and the point of sales of a retailer, it is hard to attribute sales to a marketing campaign on traditional media.
 
Enter coupons
 
The usage of coupons by retailers in India, although not as high as in the US, is increasing at a rapid rate. A coupon code offering a discount displayed as part of the marketing campaign can be used to measure the campaign's effectiveness. This is achieved by using a unique coupon code for every campaign and then measuring the usage of that coupon code at the point of sales. This way, all sales with a particular coupon code can be attributed to exposure through the marketing campaign that displayed that coupon code.
 
With the aid of coupons, print and outdoor media can create performance based advertising opportunities. However, since redemption at a offline retail store is still a manual process, compensation based on coupon redemptions would be a logistics nightmare.
 
Enthrall’s role
 
Enthrall Media is leading the front in creating performance based opportunities for traditional media like newspapers and magazines. Using an innovative mash-up of print coupons and SMS, Enthrall Media's system creates an interest based accountable form of advertising that can be used by print publishers while avoiding the hassles of measuring redemptions. Retailers place their ads in a specialised section that displays campaign information as well as a code that readers, interested in the campaign, can send via SMS to fetch a discount coupon for the retailer. A mobile coupon is returned to them via return SMS that they can carry into retail stores and avail of the advertised offer. Rather than charge a fixed broadcast rate to advertisers, this system charges based on interest generated by charging based on the number of coupon requests avoiding problems with wastage due to wide range target demographics and bad estimates of impressions.
 

Kunal Jain is the founder of Buzzr.in, one of the leading e-commerce companies in the country


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