Free! Ok, sorry, almost free!

One of the hottest attractions in a trade show is the free popcorn. But it isn’t truly free. You don’t have to pay any money to get it, but you will have to barter something - a few minutes of your attention. Depending on how much 5 minutes is worth to you, the popcorn is either free or expensive.

Memories of that yummy popcorn were triggered not by hunger, but by Malcolm Gladwell’s (author of Blink and Outliers) review of Chris Anderson’s (author of The Long Tail) new book, Free: The Future of a Radical Price. Gladwell’s review starts with pondering what will happen to newspapers and journalists when information is supposed to be free. Well, they were founded on the premise of “news”, being defined as fresh information. When everyone newsworthy or in possession of information can “tweet” their own updates in real-time, clearly there isn’t much value for information. The role performed by newspapers, should then be closer to that of aggregators – bringing together material of interest to a particular target audience and exercising some judgment on its credibility. This is still a very valuable role, so why should it be done for free?

In the 90s, when India liberalized, the Iron Curtain came down in USSR, and China decided to be more market-savvy, over 1 billion people entered the global work-force. This exerted a downward pressure on real wages in many countries – more people vying for the same pie. Something similar is now taking place in the communications industry – so many people on social media like blogs, facebook, twitter, are competing for the same eyeballs that used to earlier be glued to the newspaper and TV. All these mini-broadcasters can afford to do it for free because they make money elsewhere. Given the ever-growing pool of such people, obviously it is going to be extremely hard to make social media a profitable venture. A very,very few people, those who can add either a lot of insight or aggregate really well will be profitable and might be fully employed by this business.

But as Seth Godin points out in his blog people will be willing to pay for souvenirs of news. So you’ll see a lot of these micro-broadcasters making money on speaking tours, books, consulting sessions. (Though, frankly, just because you’re a good blogger doesn’t mean you’re a good speaker or trainer!!)

Anyways, if the content is free, what about the hardware? Here, I agree with Gladwell that even a fraction of a cent adds up to a lot when there are billions of such transactions. Many of us are addicted to blogger, facebook, twitter, youtube and consider them as ubiquitous as the telephone. But phone companies charge and social media ones don’t. At some point the big money that is keeping them going is likely to want payback, and that is going to be the next big disruptor in this space. The monetization may not be in the form of money, but in terms of time. Like the good old booth popcorn.

Since stuff IS free for now, how can you benefit? Here are my fractional cents worth:

1. Think of yourself as a broadcaster. Understand your audience, scout around for stuff that will interest them.
2. Information is cheap. Try to propagate insights too. Otherwise your audience will not be sticky.
3. Look at whether social media is an end in itself or whether you can sell souvenirs.
4. Keep a back-up copy of your valuable content. That way you can switch mediums if the current one moves to a monetization model that you do not like.

My book is titled “No Money Marketing”. It’s about how you can substitute time and intellect for money and build a brand, even against much larger competition. Perhaps that’s the souvenir for this blog!!

Build Sticky Relationships with Stakeholders

In this interview to Alokananda Chakraborty of FE, Jessie Paul, chief marketing officer, Wipro Technologies & Wipro Infotech, discusses the strategies the Indian software industry can formulate to emerge stronger and more profitable when global spending on IT gets back on track. Excerpts below. Full interview
FE: The West associates India with outsourcing. Has that changed or does India still conjure up images of a low-cost back office?
JP: The West may identify India with outsourcing, but the days of India being seen as purely a low-cost destination are gone. Let me give you an anecdote to illustrate this. When I first visited the US, cab drivers would not accept tips from me because they assumed that I was poor because I was from India. Then after the dot-com boom, they assumed I was rich because I was in technology. Now, when I say I am from India, total strangers say, “You must be smart!”
This is because of two things— one, the outsourcing industry has moved into higher value areas such as consulting and business solutions, and two, India is increasingly seen as a profitable market by the global companies.
FE: In your book No Money Marketing, you’ve talked about your experience as a “challenger” marketer. What is your marketing advice for companies that are not leaders in their industries?
JP: To succeed, a company must have a superior value proposition relative to incumbents. It needs to focus on increasing market share and building sticky relationships with clients and other stakeholders. The window of growth available for the upstart to achieve a threshold market share is the time taken by the champion to successfully react to the new business model.
From a marketing strategy perspective, keeping in mind the relatively-low budgets, the best plan is to drive focused communication to potential clients and other elements of the ecosystem. Once a threshold level of revenue is reached, one should communicate aggressively to consolidate position and rapidly acquire market share. The brand levers I recommend for a challenger are price, executive branding, country of origin and sustainability. The channels that are most effective are thought leadership, media relations, awards and online marketing.
FE: But organisations seem to be using new technology to reinforce the old marketing habits...
JP: In old media, companies could buy the attention of the audience. The audience tolerated this interruption because it was subsidising their television or radio, which were expensive channels. The internet, on the other hand, is almost free and subsidies through advertising are not required. So now companies have to be interesting in order to get the attention of their prospects, and that is much, much harder. The newer channels also force immediate and personal responses—for example—CEO blogs cannot be outsourced. This is a big transition for marketers and CEOs, and yes, many will not make the leap.

Advice for domestic techs interested in India's market

My last few posts have been about trade not just between the traditional partners like US, UK, France, Canada, Germany, but about them and the emerging markets like Brazil, India, China. I've also made a couple of trips to Delhi and met with institutions like CII and NASSCOM that further such growth from an India perspective. I also came across others like Organization for International Investment (www.ofii.org), a US Think Tank that documents the value added by non-US headquartered firms to the US economy. (They say around 5% of the US workforce is employed by such firms). Great stuff, but I still think there is lots of scope for more forums to promote such trade - a market opportunity, in fact :)

Meantime, I got interviewed by Sean Callahan of US-based B2B magazine on how challenger brands can use new media to enter new markets like India. Here's an excerpt:

ITM: What one thing can a U.S. b-to-b marketer learn from your experience as a marketing executive a Wipro and Infosys?
Paul: You should narrow your target audience because in a recession—or in any time—you know who exactly the buyer is likely to be. To give you an example, we rarely advertise. We don’t need reach. We go to media we think reaches our audience, and we’ll pay for a cover wrap and zone it so it only reaches the audience profile we want.

ITM: In your book, you talk about your experience as a “challenger” marketer. What is your marketing advice for companies that are not leaders in their industries?
Read complete interview.