Companies like PepsiCo, LG, Cadbury's, HUL look beyond conventional advertising to market products
In a tough market, cash flows are an imperative. "So, they are putting their big bucks on BTL.
NEW DELHI: PepsiCo is organising seven-a-side soccer tournaments in neighbourhoods, LG is showcasing its durables in residential complexes, Cadbury is standing outside super markets with its cookies, Hindustan Unilever is standing with a shampoo to assess the state of your scalp...These are some of the biggest companies, with hefty advertising budgets. Yet, to market their wares, they are increasingly looking beyond conventional, passive advertising and spending more on marketing activities where the connect with the target consumer is active and direct.
In marketing lingo, such on-the-ground events and promotions are called 'brand activation', and they generally form the largest chunk of a company's non-advertising activities. Spurred by brand activation spends, such non-advertising spends, called below-the-line (BTL), are gaining share over advertising spends at several leading consumer companies.
According to LK Gupta of LG Electronics, 60% of the company's marketing budget is going towards BTL activities, against 35-40% three years ago. "With increasing choices, the consumer has become more discerning," says Gupta, vice president-marketing. "Therefore, ground activations are gaining traction due to the added impact they give beyond the media clutter."
Elsewhere, Homi Battiwalla, category director, PepsiCo India, labels the increase in his company's BTL spends as "significant". "Today, consumers have started saying, 'show me something real'," he adds. In April, in its advertising, PepsiCo India switched from cricket to soccer, and launched a campaign, 'change the game'.
Alongside, it hit neighbourhoods with 'T-20 Football' -- a seven-a-side, 20-minute soccer tourney. "We realised plain advertising wasn't enough," says Battiwalla. "We wanted to build the idea, and create an experiential engagement that is grassroots with our target audience."
All this is translating into more business for firms like New Delhi-based Candid Marketing, which helps companies with their brand-activation strategies. Its managing director Atul S Nath says its business is growing 25% a year. "Clients are questioning the delivery from plain advertising," he says. "Delivery from brand activation is almost immediate, though the latter has its limitations." Nath predicts that, in the next five years, the split between BTL and ATL (above-the-line, or advertising) spends will be equal. Currently, companies spend more on mass-media advertising than on events and promotions. He, however, feels, advertising budgets will not fall in absolute terms, but more of the incremental allocation will be to BTL activities. "Overall spends on BTL will significantly rise as people begin to see its impact," he says.
Gupta of LG agrees, and attributes it partly to the rise of online marketing and social media, which conveys details of a product quicker than conventional advertising. "The influencing touch points are shifting," he says. "The customer comes armed with his own research. So, conversion with demo and explanation has become an area of great focus."
It's also the current tight business environment, says brand consultant Harish Bijoor, who sees advertising symbolising 'theme' and BTL representing 'sales'. In a tough market, cash flows are an imperative. "So, they are putting their big bucks on BTL, and money is certainly moving from theme to scheme," he says.
Mayank Shah of Parle Products says the idea is to engage with the consumer despite the higher costs. "In case of traditional advertising on television or print, cost per contact is very low," says Shah, group product manager. "BTL activation is costlier, but it's the quality of engagement with the consumer that makes a lot of sense. He feels, it is very important to generate trials in food products, which is the company's main product category. "Sometimes it's necessary to make consumer sample your products," says Shah. "And where there's a big rural and semi-urban opportunity, we need to go BTL."
Dabur India too has been relying heavily on BTL activities in tier-II and tier-III towns. "With rural consumers increasingly moving towards branded products, just leveraging mainstream media is not enough to connect with them," says George Angelo, executive director-sales, Dabur.
The company has the Dabur Amla 'banke dikhao rani pratiyogita', a rural beauty and talent hunt where rural women are groomed by trained beauticians. Another of its recent BTL activity was the Dabur Gulabari Miss Rose glow contest -- a regional model hunt from state capitals, with the eventual winner receiving a wildcard to the Femina Miss India contest. "A BTL initiative involving Vanya Mishra (a wildcard who was one of the winners at the Miss India contest) resulted in Dabur Gulabari reporting its highest ever monthly sales in April," says Angelo.