Direct-to-consumer or D2C marketing is going to take a big leap of faith in 2023 as brands are now focusing more on this channel and they want to get deeper insights while trying to understand their audience better, said Rupak Ved, Chief Operating Officer, LS Digital.
"Brands are now focusing on D2C. They want to understand more about their audience. That only happens when we are interacting directly with the consumer and hence, D2C is going to take a big leap of faith in 2023," Ved said and went on to add that the Metaverse is another trend which is going to be big in 2023.
"Brands have started exploring Metaverse more as consumers are moving towards that area. Marketers always want to be where the consumer is," Ved added.
Furthermore, he said that from the perspective of the media, video ads have also gained a lot of traction and it will continue to happen in the future. Ved also stated that while we are talking about media and video ads, connected TV space is also coming up really well.
"Transition from channel level performance to digital business performance is also a big area that we look at. Now the change is also coming about looking at digital marketing operation tools. This is the next area where change could come," Ved added.
LS Digital's growth since its inception
According to Ved, LS Digital has consistently grown over the past decade. The agency started as a small team and today it has become an independent digital marketing and transformation group.
"Growth is also about how our position changed over a period of time. We started primarily as a media agency and then recalibrated and learnt along the way. Then, our thoughts changed and we focused on how we can help brands and clients to deal with marketing and business challenges," Ved said.
Furthermore, he said that the agency has now integrated different skill sets - including media, creative, data, websites, UI/UX, customer experience and technology and innovation - under LS Digital’s marketing transformation framework, in order to help clients deliver results further in digital business.
"Growth for us is also about evolving and working with best-in-class brands whether they are digital-first or traditional or legacy brands across digital categories. It is also about getting a lot of trust from brands, clients and industry over a period of time, which primarily talks about our capability as an organisation to be able to work with brands and clients and deliver results," Ved added.
He also went on to state that the agency shall continue to invest in talent in terms of growing further, build its capabilities and also look for strategic acquisitions to accelerate their operations.
Highlights for LS Digital for 2022
The year 2022 is where LS Digital changed its gears as prior to this year the agency had primarily focused on organic growth, but last year it changed and it started looking at inorganic growth as well, Ved said.
"We have some big investors that believed in our vision and came in together to help us in becoming the first Indian digital marketing transformation group with global aspirations," he added.
Ved also went on to add, "2022 was all about looking at an accelerated growth and strategic calls saying that we are going to look forward to digital marketing transformation for the industry and the brands that we work with."
Strategy for 2023 to move forward in the industry
Speaking about some of the strategies to grow further, Ved said that the starting would be to continue doing the great work that LS Digital has been doing historically for brands and to do it consistently.
"What we have also worked on in the last few years is constantly working and consulting the brands that we work with on how digital is not only a channel but a catalyst as well. We shall continue to educate and consult the industry around it," Ved added.
LS Digital is also looking forward to expanding its reach not only in India but across the globe, Ved stated.
He further threw light on the long-term objectives of the company, he said, "I'll define a long-term objective as how we are looking at a decade or so moving forward. Within a decade or another 10 years, we see ourselves as a $10 billion group and as a global digital marketing transformation group.”
Speaking about another long-term objective, Ved said that LS Digital will also look forward to bring more talented people on board from across the globe.
Commenting on the short-term objectives for the agency, Ved said, "We are looking at three primary things. First is having brands working along with us on digital marketing transformation. Second would be to focus on integration within the group for all brands that we have worked for and having seamless experience for them. Third would be to make sure that as a group we grow 50% on CAGR YoY with good profitability."
Ved believes that the consumer journey has always been non-linear and it's just that over a period of time, with the advent of tools and technology, the people have started realising that more.
"We have always been a digital-first and digital-only organisation. Now we have realised that as an industry we are all trying to work towards looking at non-linear online and offline journeys. There are tools and platforms that allow us to do that to some extent. But more than that it is also about building data infrastructures and for the brands to be able to understand that there are non-linear journeys," Ved said.
Furthermore, Ved stated, "What we did for one of the largest life insurance companies in India was to identify using their offline data and offline consumer base and integrate that with online data to understand that 56% of the online customers have at least one digital touch point. This is basically an infrastructure that we helped the brand to build," he added.
As per Ved, while there has been an influx of agencies but the challenge is posed only by a select few. He stated that only some agencies managed to scale and while most perished.
"I will not comment about others but what we have done over the last decade when we started small and till today as a large group is that the starting point for all of this has always been focusing on the customers' problems and working towards solving them,” Ved stated.
Being agile as an organisation helped LS Digital to scale sooner and faster at times, he stated.
Ved added, "Another important aspect that has brought uniformity and connectivity in what we do as a team and as an organisation is looking at frameworks within frameworks and focusing on processes."
Ved mentioned that investing back into the business is another aspect in order to stay relevant as a digital marketing agency.
"We have always had a long-term vision of what we do and with that we have always looked at building new areas and capabilities. We started as a media agency and then diversified by looking at solving customers' problems. So, we have always invested back into the business over a period of time in terms of new capabilities. Also, we look towards investing into new talent," he added.
"What we also realised in the recent past is that we cannot build all the capabilities and that's when we started looking at working along with founders and their organisations with strategic partnerships and acquisitions," Ved added.
How can agencies increase their margins?
According to Ved, margin is a function of how much higher value work the agency does.
"Consulting services within the organisation allows us to have focus on higher margins and partnering with brands solves large business problems. Then, it is also about building new services and capabilities," Ved stated.
He also went on to state that agencies should also focus on bringing efficiency, in terms of what they do, with minimal investments, looking at automation, having a process around it and increasing profitability and margins.
He also spoke at length about the major challenges faced by the agency in 2020, during the Covid-19-induced lockdown, and later when legacy brands shifted to digital channels of marketing.
"This year we moved on to a hybrid model where people started coming back to the office which actually helped us bring back a lot of tempo and rhythm in regard to what we were doing in terms of collaboration," he added.
Speaking about industry-specific challenges, Ved said that clients and their changing needs have become extremely dynamic. New entrances into the industry have increased competition and differential expectations.
"A lot of traditional and legacy brands moved into the digital space for survival following the lockdown. So, expectations of brands also started changing. Consumers also expect an uber experience in terms of what we get from brands, apps and websites. So, digital brands would understand this, while there would be legacy brands that have just shifted to a digital channel of marketing, are trying to understand and cope with working in the industry. So, helping them in building this was another area that gave us sleepless nights," Ved added.
Speaking on the topic of whether too many brands these days just focus on performance marketing and don’t give enough attention to brand building, Ved said that this is a factor of how one looks at performance marketing.
Citing an example, Ved said, "Media is not only about performance and branding. It is actually a full-funnel marketing. There are tools that can help us with attribution with which we help our brands to focus on digital business goals."
"Digital is not just media and advertising spends, that's not the only parameter. By having the right communication, website or an app that gives a fantastic experience, ensuring what we are measuring in what we are doing or focusing on having better connect with our audiences, all of this coming together is where we deliver for performance marketing," Ved stated.
On a concluding note, Ved said that quality of work is the gap between expectations and what is being delivered by agencies to brands.
"Quality is all about setting right expectations and working towards delivering it as partners together. If the expectations are set right and when everyone is on the same page, there will not be any gap in terms of what the expectation is and what is to be delivered," he added.