Monday, January 2, 2017

Is Paytm better poised to leverage the digitisation push?

Paytm seems to be a company that is bold, innovative and unafraid to take risks
Marketing has often been described as being in the right place at the right time. One company that might appreciate the wisdom of that statement might well be Paytm. The Paytm wallet was launched as recently as 2014. So we are essentially talking about a brand that is less than three years old!
And yet, the fact that this company has spent over ₹600 crore last year probably explains why it is at the top of people’s minds not just in mobile wallets but across categories. Apart from running huge ads in the daily newspaper, viewers are also subjected to Paytm ads as a constant reminder during cricket matches, as Paytm was the sponsor of the India-England test series that India won so easily. The brand’s good fortune continued in this sponsorship deal as well. In my view, test cricket is a format that relatively fewer young Indians follow, but India’s superior performance, and the fact that the sponsorship coincided with India’s highest test success record all helped superior recall of the brand.
But let’s step back for just a second and examine the advertising strategy in greater detail as advertising has been an important constituent of the brand’s success.
How much should you spend on advertising?
There’s always been a debate on what is the right amount to be spent on advertising for a brand. While there is divided opinion on this, the important thing to remember is that advertising is an investment and not a cost. Brands need this, much like vehicles need fuel to move ahead. I remember an interesting strategy that BPL, the leading consumer electronics brand of the 1980s and 1990s that I used to work on, followed.
BPL would consciously and strategically outspend its competition and at that time I didn’t see the value of this. “Why are they doing this?” I would ask myself, even though no one at the agency was complaining! But it did help them get disproportionate share of the voice, which eventually led them to be the market leader. In fact, they kept spending even in recessionary times, to the bewilderment of industry and competition; and the results were there for all of us to see as the brand became the #1 brand in colour televisions. This is precisely what Paytm has done. Its first ads seemed more about Narendra Modi than the offering.
I personally feel that some level of controversy can actually help a brand in the early stages of its success. 

Spotting trends
One of the greatest challenges brands and companies face is their ability to spot trends that are likely to impact business. I am not sure how many people spotted the dramatic and sudden moves to demonetisation, but a brand that definitely benefited from this move that has caused a major impact in other sectors has certainly been Paytm.
If you look at some of the brands that have achieved phenomenal success over the years have been brands like FedEx and Google. “Can you FedEx it to me” asks the consumer. “Have you tried Googling it?” asks the professor of a student. Who can forget “Xerox” and its generic rise?
Paytm too has been consciously trying to make Paytm a way of life and its slogan of “Paytm Karo” is slowly but surely getting increasing traction. It is not uncommon to find small juice vendors or bakeries with the Paytm signage. The brand claims to have more than a million merchants, with 12,000 individuals selling the service and the company says that five million transactions are being facilitated every day.

The road ahead
Paytm strikes me as a company that is bold and innovative, with risk-taking built into its DNA. I am quite sure the cynics can talk about the mounting losses and the fact that all this visibility is built on VC money, which can often be initially cheap. It is also likely that some of its competitors, such as FreeCharge and Jio Money too could capitalise on the tremendous interest in the category.
While the brand has succeeded in reaching out to more establishments than the competition, we must also remember the depth and width of this country, and all these brands are merely scratching the surface. As more and more people start using Paytm and credit cards, I am sure the stretched networks of India might further struggle, and the honeymoon period of subsidies and discounts too might not last.
But let’s not forget that India is one of the few economies that is actually growing. Whatever the predictors of doomsday might be saying, brands like Paytm with their funding, investment in advertising and visibility might reap the benefits — most by virtue of being “top of mind”.
Yes, advertising works! Use it sensibly and reap the benefits!

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