Handset vendors biggest spenders on digital ads

NEW DELHI: Micromax, the nation's No. 2 smartphone vendor, used to spend about 10% of its marketing budget on digital media until last year. Now, more than a third of it goes towards online campaigns.
Rivals such as Karbonn, Lava and Microsoft too have increased their spending on digital advertising, as they target the fast expanding clutch of buyers who first do the research online to zero in on a product and they buy it from one of the e-commerce sites.
Digital marketing is more personalized, which allows direct interaction between the brand and the consumer, and the response is easily measurable, unlike those on mass mediums like TV, radio or print. Digital marketing offers data that industry experts say put them in a better position to make informed decisions.
"We try to find out what people are talking today and if there is a scope or an insight to convert it into a marketing and advertising campaign," said Shubhajit Sen, chief marketing officer at Micromax Informatics.
The company spends about 2% of its sales on advertising and marketing. In 2014-15, it posted sales of over Rs 10,000 crore.
Handset vendors are among the biggest spenders on advertising in India. Market leader Samsung and Sony didn't respond to requests for comment. Homegrown Karbonn and Lava, as well as Microsoft Mobile Devices said they have all significantly boosted spending on digital marketing in line with changing market trends. Some others such as Xiaomi, OnePlus and Motorola, which sell products only through e-commerce sites, do most marketing through digital media.
The handset vendors are tapping all the digital channels, be it search, display or social media. With India's increasing internet usage, the spending on digital advertising is set to only grow, say industry experts. A surge in sales via e-commerce is becoming the main driver behind the increased digital spending of handset vendor, said Faisal Kawoosa, lead analyst at CyberMedia Research.
"Every brand try to establish its presence in online space, since a majority of sales in future is going to happen through online portals."
According to Hong Kong-based market research firm Counterpoint, as much as 30% of the smartphones sold during the second quarter were through online channels and online-only smartphone sales contributed to more than 20% of the total sales. Companies can also fetch out insightful analytics from digital channels that help improve marketing strategy, Kawoosa said.
According to Karbonn Mobiles executive director Shashin Devsare, the efficacy that can be measured on digital medium is pretty strong. A brand can do segment targeting far more accurately than any conventional medium, and this leads to enhanced return on investment and better planning of marketing campaigns, he said.
Solomon Wheeler, head of marketing and communication at Lava International, said content consumption of users has shifted from mass mediums to digital.
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