The growth of digital marketing can be gauged from the fact that the Interactive Advertising Bureau reported that in 2016, for the first time ever, digital advertising revenues ($72.5 billion) overtook TV ad spends ($71.3 billion).
However, the extent to which this global phenomenon has gained traction in Pakistan, if at all, remains a question mark as there are no data centres that track digital ad spends, e-commerce statistics or media consumption trends. Pakistan did not even have digital regulations until the announcement of the Digital Pakistan Policy 2017 in April this year, with the stated objective as being “development of a holistic digital ecosystem for the rapid delivery of next generation digital services, applications and content.” The policy is a welcome initiative, because it is expected to regulate and standardise the entire digital spectrum and further increase the rate of technology adoption in a country with significant untapped potential.
Of a total population of approximately 194.8 million, there are currently 35.1 million internet users (18% penetration) and 31 million active social media users (16% penetration). More than 40 million people have a smartphone out of whom 39 million use 3G and 4G services; almost 28 million people now access social media from their mobile phones (source: We Are Social and Hootsuite’s Digital in 2017 Global Overview).
These statistics indicate that technology is significantly changing lifestyles and customer behaviour. From a marketing standpoint, this raises two pertinent questions. First, are advertisers factoring in this ubiquitous influence of technology to reach out to, engage with, and sell to their target audiences? Second, to what extent is digital marketing understood and implemented locally?
The digital marketing professionals and technology experts to whom Aurora spoke for this story observed that most brands in Pakistan have a myopic view of digital marketing. Even now, they are focused only on maximising awareness and reach by exposing their brand to as many people as possible, usually through social media marketing. Roshan Ejaz, COO, Bramerz, explains that “although creating awareness may be the first step in the customer journey, the ultimate goal is conversion.”
Unfortunately, most brands clearly lack an understanding of what digital marketing has to offer. Amir Haleem, CEO, KueBall Digital, points out that “for the typical Pakistani client, the goal of a digital strategy is simply to acquire XX number of likes and followers on Facebook and Instagram.” In his opinion, although having thousands of followers on social media is a plus for any brand, it is wrong to use this KPI in isolation to determine how effective a brand’s digital footprint is. For Haleem, what is far more important is taking the customer to the next stage by bringing in engagement and so create opportunities for people to interact with the brand on different platforms so that a relationship develops.
Telenor’s #ShareYourMeal campaign is a relevant example of a brand using digital to create engagement. The mechanics of this CSR initiative were simple. People were asked to post photos of their sehri or iftar meals on their or Telenor’s Twitter, Facebook or Instagram account with the hashtag ‘Share Your Meal’. For every photo posted, Telenor donated to a fund used to provide food supplies to underprivileged people during Ramzan.
Surprisingly, as overused as the term engagement is, one element that is hardly ever talked about is how it can aid in lead generation. When planned correctly, engagement campaigns can help brands collect valuable data about potential customers (leads). A case in point is UBL’s recent digital campaign executed by Digitiz, where the objective was to identify, interact with, and obtain the contact details of potential leads, which the bank’s sales teams could subsequently use to make their pitch. Telenor and UBL achieved engagement to ‘target’ people in the ‘intent’ stage; the intent to help those in need during Ramzan in the case of the former, and the intent to experiment with new banking products in the latter case.
The lesson for brands here is that if they succeed in making their product or service relevant to their audience at this stage in the customer journey, there is a good chance of achieving conversion; that is inducing ‘engaged people’ to spend.
This brings us to e-commerce, which although has been a global phenomenon for decades, in Pakistan only in the last few years have brands started to rely on digital technologies to drive online sales (conversion). At one end of the spectrum are brands, particularly in the fashion and FMCG categories, that have set up online stores to make their products more accessible to people living in areas where they do not have physical retail outlets; at the other end are start-ups operating as web-only businesses that sell through their website, Facebook page, a mobile app or all three. Yet others have benefited from showcasing their products on e-tailer portals such as Daraz and Yayvo that enjoy massive volumes of web traffic.
The emergence of the new business models driven by digital technologies has led to an unprecedented growth in e-commerce and conservative estimates project that the total value of e-commerce in Pakistan will cross the $10 billion mark by 2020. However, there are several challenges facing marketers in optimising conversion and e-commerce in Pakistan, the most crucial of which is the lack of a robust digital infrastructure. Secure and easy-to-use online payment solutions are cited as the main drawback and this is why more than 98% of e-commerce transactions are still based on the cash-on-delivery model. Yet another issue is that user friendliness is not factored in website development; rather than enjoying a seamless user experience while making an online purchase, people stumble through the process of registering, browsing, placing the order and selecting the payment method. The added time and hassle defeat the convenience that e-commerce promises to deliver. What comes through is that as a late adopter of technology, Pakistan is still lagging behind in terms of having the latest technologies that are essential for e-commerce to take off.
In the context of conversion and e-commerce, Azam Jalal, COO, Digitz, highlights an important point. A digital agency first has to come up with a Big Idea and then decide how digital can help in the implementation. This not only requires creativity, but also awareness of current technologies and how they can be customised for a specific brand. In this respect, he cites a campaign Digitz developed for Unilever’s Magnum store in Dolmen Mall in Clifton. Despite the brand’s popularity, the store’s location within the mall was so remote that people would opt for ice-creams and candies available at more visible and easily accessible shops. The campaign objective was to increase sales without changing the store location. The Big Idea that Digitz came up with was to place NFC-enabled (a technology that allows portable digital devices such as smartphones to connect and communicate) coasters on tables near the mall’s entrance. All people had to do was to tap their phone against the coaster, select their order on the screen and the ice-cream was delivered to them within minutes.
The success of this campaign hinged on the technology awareness of the team handling the Magnum account. Jalal points out that “a digital agency needs people who understand how technologies work to execute innovative campaigns for clients. At the moment, lack of skilled and competent resources is a major problem that both brands and agencies are plagued with.”
The picture is not completely bleak. International players such as Alibaba are all set to enter Pakistan and the State Bank of Pakistan is in talks to implement PayPal payment solutions locally. Such initiatives are expected to strengthen Pakistan’s digital infrastructure considerably. In Jalal’s view, “as new technologies make their way into the local market, they will continue changing media consumption trends and subsequently broaden the scope of digital marketing as well.”
If ‘content is king’ was the mantra for 2016, then ‘video content’ has ascended the digital throne in 2017. Video content is having its moment and platforms such as Periscope and Facebook Live have made it easy for brands to connect with fans and followers in real-time by streaming live broadcasts. Industry analysts are unanimous in their view that the increased online video viewership is a classic example of digital technology driving customer behaviour change.
One of the reasons behind the popularity of video are social media platforms, such as Snapchat, Instagram and Facebook. Within the last 12 months, all three rolled out their ‘Stories’ feature that popularised visual and short-lived visual interactions on mobile. With billions of people hooked on to these platforms, it did not come as a surprise when the Influencer Orchestration Network reported that online video now accounts for 50% of all mobile traffic.
Pakistan seems to have caught the video bug as well. The Pakistan Telecommunication Authority estimates that 40% of all data is used for video uploads, streaming and sharing, while 55% of mobile internet users watch online video content. Several developments have contributed to this.
— The Pakistan Telecommunication Authority
YouTube officially launched in Pakistan in September last year and in almost no time amassed a subscriber base of millions. According to Jalal, this was because people began using the video platform as a substitute for TV. “Even my mother prefers to watch the re-runs of her favourite dramas, reality shows and current affairs programmes on YouTube; it allows her the freedom to choose a time, place and device that suits her.” Jalal’s observation is on point as the top five channels on YouTube in Pakistan currently are Hum TV, ARY Digital, Coke Studio, Samaa TV and Talk Shows Central, a clear indication of the changing media viewership patterns (source: socialbakers, 2017).
PTCL, recognising this change in media consumption patterns, forayed into the digital domain by bringing Netflix and iflix streaming services to their broadband subscribers. Taking things a step further, in a first, PTCL live streamed the matches of the recently concluded ICC Champions Trophy completely ad-free via its Smart TV and Smart TV App.
With the increasing availability of cheaper smartphones and declining 3G and 4G tariffs, the global trend of TV audiences shifting to digital for their entertainment, sport, news and lifestyle fix will continue in Pakistan, albeit at a much slower rate.
This raises the question that if most TV content is available online, then are brands not losing out by not advertising on these video platforms? To this, Urooj Hussain, Associate Director Digital, Brainchild Communications Pakistan, says that “brands have to formulate a video strategy for online platforms to ensure incremental reach for their communications.” This does not imply that brands stop advertising on TV. Rather, developing video content customised for the web will help them grab the required eyeballs. Customised being the operative word.
A common practice employed by most brands is to produce big-budget TV commercials lasting 60 seconds or more and uploading them on digital platforms with the view that this qualifies as successful video advertising. However, Hussain clarifies that “the practice of pushing the 60 second TVC on digital is not going to work.” Her comment is based on the fact that a video view is counted on most video platforms if it has been viewed for six to 10 seconds, after which the ‘skip the ad’ option appears. Therefore, if brands continue with posting long videos that fail to capture audience attention and deliver the message, then even while video views are counted, the content after the initial 10 seconds has more chances of being ‘skipped’ by viewers.
For an effective digital video strategy then, brands need to create short-form and engaging videos. “The problem,” according to Jalal, “is the availability of skilled resources with the technological and creative abilities to tell the brand story within six seconds. A successful TVC director may not necessarily be able to replicate the same effectiveness on digital and the industry at present, lacks specialised knowledge and production capabilities to create snappy video content with a wow factor.”
The buzz surrounding digital notwithstanding, there is a long way to go before it is allocated its due share of the marketing pie. In terms of ad spends, industry analysts estimate that digital accounts for a mere seven to eight percent of the budgets currently. They also lament the lack of a formal and consistent digital marketing strategy due to which there are fluctuations in digital budgets, depending to a large extent on the whims and views of people at the helm of marketing affairs in organisations.
Nonetheless, there are promising signs. A host of local start-ups established by young entrepreneurs are tapping into the benefits that digital has to offer. These businesses have dedicated almost 80 to 90% of their marketing budget to digital. “The reason for doing this is because digital offers better buying for the buck when you have limited resources and traditional media is too expensive and crowded. With digital, there are greater chances of a brand or campaign generating more exposure, engagement and recall,” points out Haleem.
Perhaps more importantly, in the last three years, digital spends for leading international brands such as Coca-Cola, GSK, Nestlé and Pepsi have almost doubled year-on-year. They are now allocating as much as 12 to 15% of their total budget for online marketing, a figure expected to go as far up as 20% by the end of the next year. Given the larger budgets that these brands have, overall digital ad spending in Pakistan will continue its upward trend.
This shift in the mindset of the big brands is based on two important insights. Firstly, TV has started to lose out as the go-to medium for creating massive and instantaneous impact, given that people are no longer glued to their TV screens for breaking news or entertainment. This is particularly true for Millennials who constitute 40 to 60% of the population in Pakistan and are estimated to spend more than 60% of their waking hours online (source: Toluna, 2017). Therefore, to create impact, brands have no option but to develop a digital video strategy. Secondly, there is growing awareness among media planners that it is extremely difficult to account for spending on TV due to a lack of tracking mechanisms to determine whether a brand’s target audience even saw the TVC. “The advantage of digital campaigns is that there is far more accountability because the number of people reached, as well as those who engaged with a piece of communication is easier to measure,” Hussain explains. What is required therefore is a change in the mindset of brands if they are to implement successful digital strategies. “The objective is no longer to reach the maximum number of people but rather to reach the right people,” added Jalal.
This is why Ejaz believes that Programmatic Advertising will have a key role to play in digital marketing going forward. Globally, almost 50% of all ad dollars spent are channelled through Programmatic, although in Pakistan this digital phenomenon is yet to catch on. Several digital agencies have acquired the software needed to execute Programmatic ad buying and are in the process of developing the skill set needed to implement it.
Programmatic works on the principle that by collecting customer data from different media, such as local publishers and Google Ad Networks, brands can target audiences on a granular level. “Programmatic helps optimise advertising budgets across digital touch points. It helps collate information about the customer journey, and thereby execute more effective and efficient ad campaigns, while having the option to readjust budgets in real-time, if campaign targets are not met,” says Hussain.
From this perspective, the hype surrounding Programmatic is justified. Brands are likely to be far more successful if they switch from mass advertising to highly targeted advertising and reach out only to engaged customers, more likely to make a purchase.
However, the digital resources and skilled people required to make micro-marketing a reality are lacking in Pakistan. Jalal is of the view that the absence of data centres, data scientists and real-time data collection on media usage and consumer behaviour patterns is limiting the implementation of digital technologies such as Programmatic (for more on the unrealised scope of data-driven marketing, read our story Making the Big Data big decision on page 30). What this means is that faster adoption of new technologies and an enabling environment are needed before the full potential of digital can be realised. A case in point is the increasing investment and attention that DOOH advertising is attracting since the ban on billboards by the Supreme Court last year (for more on DOOH trends in Pakistan, read our story Outdoors goes digital on page 10). The more novel aspects of digital marketing, an Augmented Reality (AR) mirror at your favourite cosmetic outlet that allows you to virtually try on blushers for instance, remain a distant reality.
It has been predicted that the ‘next billion’ people online will be from Pakistan and this represents a huge opportunity for brands. The average Pakistani is tech-savvy and well aware of international digital trends. It is more for the brands to recognise the fact that digital technologies will continue to reshape market dynamics and customer behaviour and they must therefore rethink their marketing and business development strategies to stay relevant in a digitised world.
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