Emirates Business 24-7
Jayesh Ravindranath, General Manager Middle East & Asia for AIS BrandLab interviewed in the Marketing and Media section.

Investment in advertising and brand communication continues to remain a positive preposition even in the downturn, encouraging retailers to maintain a steady investment in marketing, reported The Nielsen Company in a survey.

A global survey and research company Nielsen in its special report released in October said that on an average marketing ROI is about 1.09 globally, evaluated over the past 12 months. Return on investment is the amount of sales achieved for every dollar spent on marketing.

Nielsen Analytic Consulting found through numerous studies worldwide that the average short-term return on marketing investment (sales return within three months of media execution) is $1.09 (Dh4).

However, the report cautioned that the ROI for different marketing tactics varies based on the efficiency that tactic provides.

While emerging markets, including the Middle East, showed positive signs with an above average ROI, China, with the advantage of one of the largest consumer market showed a stronger ROI than most developed markets such as Europe and the United States due to its sheer population size.

“For each dollar spent on marketing, even if within one province, the number of people reached and potentially influenced is huge,” said the report.

In a global scenario, the report showed a very high return ($2.18) owing to a very vast presence of consumers on the web. In total, more than 81 per cent of the world internet users are in Asia, Europe and North America. However, the scenario in the Middle East is very different as net penetration is very low at only 2.9 per cent of the world share of net users.

“This number is growing very fast, but is still considerably very low in comparison to the rest of the world,” said Ranjit Kumar, CEO or Turning Point advertising company, as he explained his reason to count on print media, especially the newspapers in the region.

“Elsewhere, especially in the West, the newspaper industry has reached its peak while readers are still growing here. As a result, we recommend our clients in favour of print media, especially the newspapers,” he said.

According to Kumar’s estimates, the return on investment in newspapers in the Middle East is at least 40 per cent more than elsewhere.

Bejoy Thomas, Marketing Head of Abu Dhabi Co-operative, who is also responsible for innovative marketing of the establishment, voices the same sentiment. “We are consumers of advertising space as also we are the providers of the same in our publications [Capital Talk and Hadith Al Aseema], and we believe that an investment in print media is very responsive and generates very high results of ROI – anything between $1.5 and $2, in my personal and professional estimate.

“Shopping habits in the region are as different as reading habits,” said Thomas. “Perhaps that’s the reason we have a very high return on investment on in-store promotions also,” said Thomas.

Shedding light on the survey report, Jayesh Ravindranath, General Manager Middle East & Asia for AIS BrandLab, said: ” I am not at all surprised at what the Nielsen study has thrown up.”

He said: “The form of brand advertising and the means of communicating the brand’s presence and its benefits to consumers has changed radically in the past decade, with the past five years accelerating that information process change. The conventional approach of relying completely on ‘traditional mass media’ does not work any longer. This is true across most product and service categories, globally.”

On the question of local relevance and adaptation of the results, Ravindranath said: “The marketing ROI as indicated in the survey is at $1.09. This in itself can grow by another 40 per cent or more if brand marketers are truly and completely focused on a few key areas of their brand.

“In essence it is crucial for marketers to realign their brand’s offering to the consumer, around the unique and differentiated values it brings to the table, and then offering that to the consumer through a judicious mix of marketing channels – across distribution and communication. In doing so marketers have to constantly re-examine the essence of the brand, the portfolio if it exists, the need to keep the differentiated value offering strong and, the need to consider and use various forms of communication to keep the consumer engaged and the cash tills ringing,” he said.

The survey results said though the internet is dramatically changing how we access information, for a significant number of people, newspapers and magazines remain an important source of information.

“However, unlike newspapers that have a broad reader base, magazines have a clearly segmented target group that marketers can tap into through advertising. Newspapers are also, for the most part, considered disposable whereas magazines can be held onto and referred to well past their published date,” said the report.

Television plays the most important role in maintaining brand loyalty. The report state that the equity of a brand is the level of awareness and loyalty (expressed through sales and/or recommendations) it achieves among its target market. Fostering equity is a long-term strategy tapping into both the emotional and practical needs of the consumer. TV advertising remains the most valuable driver of brand equity due to its effectiveness at building brand awareness and subsequently sales.

Despite TV advertising’s short-term ROI being less than the initial investment due to the relatively high cost of advertising on TV, the residual effect on stimulating sales is greater than any other media.

Ravindranath elaborated his stand on the digital media saying: “The web and mobile telecommunications have revolutionised information dissemination and processing. Across the world and, across rich and poor countries, either the web or mobile telecom, or both, have changed the way people live and interact with one another and therefore with brands. The desire to check out a product or service is but a finger tap away.

“Look at the ‘explosion’ of the mobile telecoms business in developing economies of Asia, Africa & Latin America and you will understand why this medium is vastly important for any large brand marketer. This hold true for the web too.

“The other key opportunity is promotions, co-operative or joint programmes and PR. This has been borne out in the Nielsen survey too,” he said.

Social marketing networks are an emerging opportunity and the ‘viral’ effect of these networks can be phenomenal, of handled properly, said Ravindranath.

US survey

TV remains the most affective mode of watching video in the US, according to a recently-conducted research.

Nielsen’s A2/M2 Three Screen Report – a quarterly analysis from our Anytime Anywhere Media Measurement initiative – shows considerable year over year growth in terms of time spent for DVR (up 21.1 per cent) and online video (up 34.9 per cent) in Q3 2009. Given the consistent spike in usage among the three screens of television, internet and mobile, consumers are clearly adding video platforms to their schedule, rather than replacing them.

“Americans today have an insatiable appetite for not only content but also choice,” said Nic Covey, director of cross-platform insights at Nielsen. “Across all age groups, we see consumers adding the internet and mobile devices to their media diet — consuming media anytime and anywhere possible.”

For the first time this quarter, Nielsen reports how much time the average American spends in a typical week with TV, internet and mobile devices. Without a doubt, consumers of all ages spend the majority of their video time (nearly 99 per cent) in front of the television, while DVR and online video are becoming more widely used.

- In 3Q09, the average American watched 31 hours of TV per week, with 31 minutes spent in playback mode with their DVR

- In addition, each week the average consumer spent 4 hours on the internet and 22 minutes watching online video

- The average consumer spent three minutes watching mobile video each week

The TV and internet figures in this report are calculated using Nielsen’s National TV and Internet panels, which are measured electronically and reported on a regular basis.

By Vigyan Arya

Emirates Business24-7

This entry was posted on Friday, December 11th, 2009 at 6:19 pm and is filed under Business, Press. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.