Tough Battle to Stay Afloat

I m here to do business, not politics…and business is about bottomlines,"

Suzuki Motor chief Osamu Suzuki said on his first visit to India years ago. He

was talking cars and his joint venture with the Indian government–which gave

birth to Maruti Udyog, and to the redefinition of the automobile business in

India. Years later, as IT tries to emulate the feat and put India on an even

higher global pedestal, both segments face a common problem, in varying degrees.

While the auto sector has been through a churn of plenty, with big names

dropping out, the IT industry remains in the grips of a squeeze that refuses to

go away. While auto struggles back to its feet, IT stutters…the result–the

globe sits and watches, for in these two segments rest the fortunes of global

business sentiment.

And the stuttering of the IT sector has had a fallout on its sub-segments.

Software and services have been a casualty, with growth rates down to single

digits. Hardware has taken a fall, with signs of revival only becoming visible

of late. By far the worst hit have been beleaguered dot-coms and advertising,

the last being the mirror of the health of any industry segment.

Hit where it hurts most



The Internet was intended to bring advertisers and marketers face-to-face

using cutting-edge innovation, preventing wastage of advertisements and

maximizing budget controls. Media support services were designed to help

optimize the advertising process. For, by utilizing the highly-efficient

targeting technology (like DoubleClick and RightServe), the advertiser could

focus on the audience he wanted, at the right time and place.

The US-based e-Marketer’s reports on e-advertising predict that by 2003,

sales of traditional banners on websites would drop to 41 per cent of total

online ad spend, with strategic sponsorships growing to 31 per cent. Sponsorship

on the Web is more than merely evaluating the URL and backing it with money. It

depends on whether a site has content and marketing plans to make it memorable.

Intel, for example, had sponsored a festival section on Satyam Online, which

gave information on Indian festivals, with games and promos thrown in for good

measure. The aim was to drive registration to Intel’s personal technology

section. Tracking and accountability, facilitated through targeting technology,

helped advertisers on the Net assess returns on investment. These monitored

advertisements and allowed the advertiser to make necessary changes. Most

importantly, they could actually quantify returns on investment.

Two years back, the strategy worked. Today, there are no such success

stories. The same Intel is finding it tough to spread its education program in

India using the Web–content is simply not available. In China, Korea and

Japan, Intel has no such problem with local content. Bottomline–we may have

the numbers, we don’t have quality.

Quite clearly, mediocrity has become the order of the day. Imagine the plight

of a media planner at an advertising agency; with around 25 publications

nationwide to choose from... where would he turn when he has thousands upon

thousands of websites, each claiming to be comprehensive and the best? So where’s

the future? With the Net coming in over cables, instead of scarce phone lines,

and the PC being replaced by cheaper gadgets, portals will be the gateways of

eCommerce. With 42 million homes connected to cable television, the Internet

could, with new cables and equipment, be accessed at a speed 600 times faster

through cable modems. The effects will be palpable.

To sum up, a quote from a story by Mindtree’s Ashok Soota on the Internet

revolution–"eBusiness is not about selling on the Net, but building

eBrands. It is not just an infotech issue, but a strategic one that should

establish deep relationships with customers. It has to be business-led, not

technology-led."

Somewhere, in the mad scramble to clamber on to the bandwagon, we have

forgotten all the wise words.

Rajeev Narayan,in New Delhi