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.
https://www.youtube.com/watch?v=GVsypQYpTmo
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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