Tuesday, March 10, 2009

You are not your car

The DJIA(Dow Jones industrial average) going under 6600, bailout not making any difference, homeless increase and jobs disappear as US goes down the hole of recession. The cash crunch has hit India, RBI opening gates with lowering ratios and rates, Banks skeptical to pick up more debt, as NPAs rise, still more loans are on offer to get the economy back on track. Could this be counter productive, in case loans are not paid back, like in the US? As Buffett announces “this is the pearl harbor of recession, and we have fallen off a cliff”. The fear in the customer’s mind is unprecedented, and its spreading like the bush-fires, the corporate needs to come out with honest and lower offerings, and marketers across the world have the tough job of renewing customer confidence. Is social media marketing, where millions of customers are converging, the right medium to convince customers of new offerings, that too only when corporate is giving some good schemes, as in India, greedy auto firms are raising prices, airlines not dropping prices even after government sops! Complicated, Yes, that’s the life in one of the world’s worst crisis. I will use the quotes of fight club to make it interesting.

“You buy furniture. You tell yourself, this is the last sofa I will ever need in my life. Buy the sofa, then for a couple years you're satisfied that no matter what goes wrong, at least you've got your sofa issue handled. Then the right set of dishes. Then the perfect bed. The drapes. The rug. Then you're trapped in your lovely nest, and the things you used to own, now they own you.”

What is the reason of recession, as per Dr. Ron Paul “We spent too much, We borrowed too much, and Fed printed more to facilitate this”. Basically the spending was out of control based on debt, and the debt was made easier and easier by Fed, the people drove expensive SUVs, got big houses and they couldn’t pay back. Is RBI not doing the same thing, reducing CRR each month, printing more money, pushing more money supply, as NPAs of banks rise, does it make sense to give out loans, when current loans are not getting paid out, that is what has created this global crisis, and I think in India we are following the ways to doom. People are buying sofas for 1 lakh, cars for 8 lakhs, and house for 1 crore, and we know it is out of capacity, its due to the availability of debt, this is bound to crash. Now even bathrooms and kitchens need to supremely ornamented, the tiles, the Italian kitchens, the expensive appliances, its going out of the window. We are spending too much, which is based on debt, this is modern India, going on lines of Japan and US, into the recession.

The government budget, is far more adventurous, instead of conserving spends, and taking money out for sops, decreasing income tax, they have increased the spends, the pay package for government employees, the rural schemes for 1,00,000 crores, I have put the zeros intentionally, we know where that money is going to go, as poverty in India actually stays constant. Slumdogs are staying slumdogs, and richdogs are becoming richerdogs. The budget deficit looks at a mounting 3.5 lakh crore, on which giving sops is suicidal, and sops keep coming, and spending keep rising, result S & P has rated India negative, I said the same thing on budget day, but no one heard me, but when S & P gave out rating, that was on front page, but that is obvious, I am not complaining. Bottom line, with this budget government is not in a condition to help us pay back installments of the big car, while RBI is working hard to get us that loan.

“Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don't need. We're the middle children of history.... no purpose or place. We have no Great War, no Great Depression. Our great war is a spiritual war. Our great depression is our lives.”

Warren buffet has warned that the fear in the consumer is unprecedented, he puts it very well, that you can install the gravest fear in five minutes and confidence may not be installed in the same manner. The fear maybe unreal, but what about demand, that is also driven by fear, advertising and availability of debt. As the dollar departs from world markets, the domestic demands has to facilitate the economy, while the export market markets crash. In India, the best part is retail consumer demand still on a good level, But as exports fall, and demand relatively falls in infrastructure and retail sector, the manufacturers and wholesalers, are experiencing overnight losses, one of my friend, who deals in copper, told me that copper rate plummeted within a week, and his inventories, were worth half. He no longer holds big inventories, but that has lead to loss of customers who want the material the same day. Please get it right, that means, everyone wants Just-in-time inventories, only when order is there, which manufacturer cannot do, obviously, so he is cutting down production or smaller units getting closed. In China, these problems are bigger, as it is highly export oriented, but the old tide is in their favor.

"It's only after you've lost everything," Tyler says, "that you're free to do anything."

Still India looks good on consumer demand, and that is what we need to push. The RBI measures are risky but happening. The service tax reduction is one good move, but now it is up to corporate to give special sops to consumers. post which it is the marketers job to install confidence and promote good purchasing for consumers. As media spends dry up owing to high pressure on costs, the marketers are looking at newer options.

I bet social media marketing and video advertising on internet is the way to go, but it has got to come intelligently. The connect, the evangelizing, the continuation of communication and the value delivery on ground has to be the order of the day. What it means is this, the social media has millions of people entrenched, you got to be part of the media, entertaining these people, without blowing trumpets of your brands, so entertain first, introduce second, give a humble introduction, not in their face, as most of the media planners and brand managers want “It needs to be seen”, so that they can impress their idiotic Heads, who have no head or tail of internet marketing, and it is for their bragging, since it is technology and digital, or maybe since his son is on Facebook. Do not, and I mean it, Do not bring the term ROI here, and please understand what that means, it is been some time that this term is abused. It is a financial term, just ask your finance guy for the firm's P & L, and check the EBIDTA, calculate the operating leverage for the year, then lets talk ROI. So Entertain, Introduce, and next impress him enough, for him to leave his contact info, contact quickly within 24 hrs, surprise him with more value, and service him well when he comes to your outlet, MARKETING IN ACTION!! Do not make it inaction…

Video advertising is really going to be the future, with video publishing and ad-serving technology getting stronger. Creativity is the name of the game, and entertainment has to be the starting point, same walk way as I explained for social media marketing. But creativity and customization do not go hand in hand, so do not trust the agencies looking for mock-ups for the clients to clear, that will kill creativity. The creativity will come out of “loosing all fear and hope of appreciation” from the client, the creativity is about you, your own stamp, it is like the great Sergio Leone movies, once upon a time in America. As responsible internet media owners and marketers, lets crack it for the brands, increase consumer demand, get the spending in the right direction, and beat the crap out of recession. Then buy that 1 lakh sofa, may be not……

“...you're not how much money you've got in the bank. You're not your job. You're not your family, and you're not who you tell yourself.... You're not your name.... You're not your problems.... You're not your age.... You are not your hopes.”