Delivering his keynote address at Ad:tech 2015, the COO of Mindshare – APAC refers to various platforms like Google, Amazon and Facebook as walled gardens
Jagadeesh Krishnamurthy | Delhi | March 20, 2015
Stepping in for Rob Norman, Chief Digital Officer, GroupM, Gowthaman Ragothaman, Chief Operating Officer, Mindshare Asia Pacific, delivered a keynote address at Ad:tech Delhi 2015.
Starting his address by stressing that we are reaching a stage where we know the chaos, and also know what to do with it in a broad form, he structured it into three things – layers, devices, and consumers. Gowthaman observed that today’s businesses on digital medium were built on search, social and sharing. Referring to the walled gardens existing in the digital ecosystem, he elaborated, “Each of the key players are in their own gardens on the Internet, primarily because the consumers choose to be with Google, then they come out of the garden and go to Amazon and then go to Facebook. Each of these is, therefore, called walled gardens.”
He pointed out that this was the fundamental point that was keeping systems chaotic in some form of the other. “What’s happening with this is that there is tremendous value exchanged between the utility of each of the walled gardens are creating for the consumers and the brands that are consuming it as well,” he remarked.
“If you look at a company like Google, which has got $60 billion revenue, it is on the back of consumers’ willingness to pay, not really paying, but ‘willing to pay’. The consumer surplus is what’s really driving the ecosystem. This surplus is approximately $500 billion. What is happening is the tremendous value exchange. We can expect a business of a $1 trillion built on the back of this consumer surplus,” added Gowthaman.
According to him, our acceptance to be a part of an ecosystem was sending out massive data for brands to build their strategies on. He reasoned, “The reality is that the data that is flowing in the market today is nine times that of what was there ten years back. Fragmentation of market, developing algorithms, and consumers’ cry for efficiency are the biggest challenges we face today.”
Touching upon the growing significance of programmatic buying, he pointed out that recommendation engines like Netflix and Amazon would also drive marketing as they enabled consumers to choose as per their own choice, thus giving brands an opportunity to target the right set of audiences.
He mentioned that since content was being consumed through various platforms and mediums, there had been a decline in consumption of content through print medium, but again if the medium was used effectively, print could contribute a lot in terms of reach for a brand.
“Traditional TV distributed on non-TV devices will continue to dominate, because digital video news will continue to be as it is for some time. Today, we have a very deeply inefficient commercial model. But we have huge opportunity to build on native advertising in the print medium,” he said.
Gowthaman believed that the number of smart phones would increase going further down the line and would also do better than the growth of 3G and 4G. “Mobile has been a key growth driver for a lot of industries, including e-commerce. Consumers will continue to be elusive thus utilising the journey of consumer’s is the key focus for all the agencies,” he noted.
Summarising his address, Gowthaman said, “Going forward, large part of the population will begin believing that mobile is Internet. More than 60 per cent of e-commerce in India is through mobile. It is going to be a big play when it comes to managing the focal point. The trend is much more optimistic than before. The only barrier to growth is logistics. If that is fixed, we have big ray of hope for the future. So, in essence, in the next five years, whoever turns 20 would not have read a newspaper, would not have bought a CD, and would not have read any Encyclopedia as a book. All media will have an IP, and be connected to the social stream. Hence, any communication must be very broad, persistent, and distinctive. We have to cross the hurdles of relevance and engagement.”