For some reason, December gets your mind working in this manner. Thinking about what went by, thinking about what’s coming up. Though this is something you can potentially do any time of the year, there are these December triggers.
You’ll take this kind of a stock for yourself, and then perhaps larger issues, like the world at large!!
So I got afflicted too. And rather than look backward (more of an analysis and research task), I choose to look ahead. Crystal ball gazing on where the digital space in India is going, in 2012.
The good part about this effort is that you can only prove me wrong, after 12 months, by which time, if I have gone horribly wrong, you’ll not remember, and if I have struck gold with my predictions, I will ensure that you don’t forget that ‘I told you so’! So it is a win-win for me, and hence, here goes.. my 10 predictions for the digital space in India, in 2012:
1. E-commerce or more specifically, online retail of goods, will continue to show fabulous growth: the hockey stick curve has started, perhaps 12 months back. This will continue on a sharp, upward trajectory, right through 2012. The growth is on account of various factors:
- Internet user base growth
- Better bandwidths
- Mobile penetration
- More focused online stores doing awesome job of merchandising, logistics, etc.
- COD and other easy payment options
But besides all of these, I believe that there is one very significant factor here. I believe that a new consumer generation has come into the marketplace at this time, and they are shopping online. And they are digital natives. And not digital migrants. Like the folks who shopped before.
Those who are 20-21 now, on their first jobs, earning their first salaries, and having disposable incomes, these guys never wrote letters, only emailed. They used computers at schools and shared homework with their friends on email. For them, texting and tweeting are like air and water. They were just there. They did not migrate into these from some other planet of letters or faxes! So for this new consumer generation, shopping online’s also as natural a step.
It is my belief that the coming of this new generation has been the biggest contributor in this significant upward swing in online retail. And that being the case, this will only continue to grow, in 2012.
Because Flipkart and Infibeam and few others, are investing so well into logistics and other fundamentals, they will continue to establish themselves as leaders here. But the space is very very young still. These are no permanent leadership positions. You could see challenges, especially in specific categories, emerge in 2012. Perhaps a different brand for lifestyle products, another for household items, something else for motherhood, and a different one for kids maybe.. watch the space. It is about to change!
Amazon should be entering India for sure, in 2012. And even while they are building their own team, and deny rumors of acquisition plans, they WILL acquire. But it may not be Flipkart. Flipkart on the other hand, will use the large sums of money it has raised to make 1-2 niche acquisitions of its own. And most certainly, amongst the rest of the pack, some consolidation will happen. Perhaps driven by the common VC investor!
India’s retail majors will NOT acquire yet. They will continue to be in huge debt burden, and FDI will only reduce their debt, but the economy will not allow them to venture into online retail via acquisition routes, especially at a time, when VCs have driven up the valuation of online retail, and they will not sell cheap. At least not so soon!
2. The Group Buying / Daily Deals space will crack: Yes, while e-commerce / online retail will be hot, some of the ventures which have pretended to be e-retail, but were actually deals’ sites only, will have challenges to face. I have been a verbal critic of the group buying model. I have been a believer that group buying is good for certain categories only, and for certain times (like for liquidating perishable / excess inventory), but the direction that the industry took, and the way everything was being sold at deep discounts, was a dangerous trend. And not sustainable, in any case. And the valuations that these sites have commanded have been a function of numbers, that are unsustainable too. So we will see the model crack. We will see some Deals Snap, and some Groups On fire.
3. Media Buy Spends for digital will increase: Well, the marketers have been talking the talk for a while now. Check out one marketing conference after another, and all they want to talk about is, how digital is becoming big and exciting. And yet, on the ground, the talk has not been walked. Enough. And we still see fat cheques written out to television, and loose change dropping the digital way. Multiple things are happening that will make for big shifts here.
First of all, a lot of marketing is getting integrated now. So while the bulk money may be spent on traditional media, because a contest or some call to action is integrated into digital, there is digital spend too (perhaps an application on Facebook, say). Then again, due to the slow economy, larger mainline budgets may be hard to come by. And yet, the brand has to reach the consumer, and at a lower outlay, digital may be the way for a brand to do so. And the marketer can finally walk his talk then, no matter if it was forced to him, due to his budget constraints.
One way or the other, digital agencies will see increased billings as a consequence.
4. Marketing will get more integrated: We are already seeing a lot of this. Like a TVC having a call to action that goes to a Facebook link. Or when bloggers are invited to brand events, along with press, and there is amplification of the communication sought to happen on social media spaces too. Some of these are already here. 2012 will see a lot more of these happening, and in fact, integrated marketing will become commonplace.
So if there is an iconic TVC campaign, and you have run out your television media budgets, you could create a set of sequele, to continue to ride the popularity, on YouTube maybe. Or where more and more flash mobs are seen (God help us.. !) just to create content that a brand may expect (“hope”?) to viral thereafter. Live tweeting of your on-ground event, a story that begins on Twitter and takes wings on mainline media, etc. are all examples of media merging. So from media spaces like television, print, digital, social, mobile, to Above-the-line, Below-the-line, etc. all combining, are realities that we will see more in 2012.
As Nikesh Arora of Google said, there is no online or offline, now there in just the one line!!
5. Brand Pages on Facebook will have to fight clutter: A Facebook page for my business, then one for my housing society, and then one for my Walking Group, and one also for my pet dog, and oh, one for my bonsai plant, etc. etc. Just because these are so easy to make, there will be tons of brand pages on Facebook. Everyone and their uncle will have one. And names will be misleading. Confusing. And brands that got excited by a Facebook presence, will now realize that the presence is only a starting point, and means nothing by itself.
Creativity will be at a huge premium, and brand pages that stand out for creativity, a unique approach, will emerge victorious.
6. Google+ will get an honorable mention in history: After Orkut, Wave, Buzz, Google+ was yet another effort by Google, to get into Social Networking. Perhaps Google’s best effort till date. Got a lot of initial buzz, many diehard Google fans swore by it, were happy to see competition to a dominating giant. But after a few months, we are already seeing a larger registered user base for G+ (curiosity got people to register) but very little traction in terms of usage. Yes, some of the geeks are there, and love their own private network. There are also some interesting features, like Hangouts, for example.
But it is no challenge to Facebook. Not now, and unlikely to get there. And because people only have so much time in a day, their ‘social media hours’ will most likely go to Facebook and LinkedIn, and not shift to G+ anytime soon. And that’s the reality, like it or not.
So while the fizz has already gone down, 2012 will see Google+ take its rightful place in history, as another commendable effort in the space, by Google. But an effort that was at best, a good also-ran!
7. Social Media embarrassments will happen: Inspired by Anand Mahindra and Ratan Tata, CEOs and other top management are getting tempted by Twitter. Except that they don’t always spend so much time to ‘get’ the medium. And they could make costly mistakes! Likewise there would be others in the organization, who could make some boo-boos. There are organizations who like to keep their social media efforts lean and mean in costs. “An intern could take care of this”, they figure. And they hand over their brand worth thousands of crores to that intern. And yes, they’d save a few thousand bucks each month. Except the intern could also mess up one day. Or for that matter, the social media agency could make a mistake too.
We have not heard so far, terribly embarrassing situations, but I suspect one will happen, in 2012. And the sooner we have it, the better, so that it draws everyone’s attention, and everyone gets a little more careful from that point onwards! Nothing like an incident to make people acknowledge the risk! Oh, and by the way, I hope that the embarrassment is not with any of OUR clients.. lol. I don’t mind learning this with someone ELSE’s experience, rather than mine!!
8. Online Reputation Management will be part of a brand’s budgets: People will cuss brands on social media. Why? Because brands are there, and because social media is there! And cribbing and cussing is so easy to do. Then there will be some mean competitors who think it is easy to use fake accounts and malign a competitor’s brand. OR a disgruntled employee wanting to run down his ex-company. Only because he reckons that he can do it, and get away with it.
So all this was already happening, and so how will 2012 be different? Well, for one, more people will discover how easy it is to malign brands. Secondly, as the base of users increases, and more people use the web and take decisions based on the inputs got from these media, the impact of such negativisms about a brand, will be larger.
For few brands it could be loss of market share. For others it could mean a loss of market cap! And for yet others, it could mean the filing of legal suits and / or a large PR budget to clean up the mess.
The later in the reputation loss that repair is initiated, the more difficult and more expensive it gets. Which is where Online Reputation Management (ORM) comes in. While ORM will also NOT prevent from bad news showing up for a brand, ORM will detect, and enable a fix faster, before more damage has happened.
With that consideration, I’d expect more and more companies to make ORM a nORM in their business!
9. A killer case study will happen, on Social Media, in India: While India has got some brands with very large Facebook fan bases, and there have been some moderate YouTube views, we have not yet seen a thunderous success, like an Old Spice or a Blendtech or something of that level. I think we have come close now. The year 2012 should see a few large Social Media successes in India as well. It will give a well deserved respect for Social Media, amongst marketers.
And yes, in this aspect, I would hope that it is one of our client campaigns, which makes the cut ‘from good to great’ 
10. We should see some M&A in the agency space: We have many agencies in digital and social media spaces, that are either boutique or small enough, and not part of any big agency group. Between all of these smaller and independent agencies, they manage a large part of the digital and social media businesses. And ad and PR agencies, much bigger than these independent agencies, often do not get a share of that business.
As explained in an earlier prediction, the spends on digital wil increase, and there will be more number of integrated campaigns, too, where the mainline agency and the respective digital agency would probably work together.
It would be time where the larger agencies start thinking of ‘owning’ this piece, and not just renting it. And while ‘build’ is always an option for them, some will look at a ‘buy’. Here is where before end of 2012, we will see some M&A activity amongst the agencies.
We may also see some smaller agencies consolidating in parallel, which wil add steam to the M&A movement in the industry.
So those are my ten predictions. What do you think?
Agree with few, disagree with others? You have any other predictions? Share them as comments. Love to do the discussion.
Meanwhile, here’s wishing everyone in the digital industry, and then everyone else also, a Very Happy and Prosperous 2012.