Hype Cycle for Emerging Technologies in Digital Marketing

Businesses today have been extensively integrated with digitization, promising convergence of people and businesses, while disrupting existing business models. A new age of digital marketing has arrived where extensive campaigns are pushing new products through platforms such as websites, e-mails, apps and social networks. With over seven billion people and businesses, and a millions of technologies bringing a new world together, digital marketing plays a major role in empowering businesses with the much-needed edge to thrive with the competition.

Digital Business Development Path

 Rapid change is fueling digital marketing. Within the last decade we have seen technology giants driving businesses such as Facebook and Twitter. Mobile marketing and advertising marketers have begun focusing on consistent and contextual without being interruptive.  Change is the one thing that is constant, with changes being made faster than ever before. However, impact due to the change is highly dependent on it’s temporal context. For example, wearable technology like Google glass has gained a lot of news coverage when in fact, Steve Mann had already developed a similar device, ‘EyeTap digital Eye Glass’ in 1999. This is a prime example showcasing the importance of analyzing the visibility of a product with time for organizations to capitalize its technological and business resources to make the best marketing sense.

Hype Cycle

 The Hype Cycle is a branded graphical tool developed and used by IT research and advisory firm Gartner for representing the maturity, adoption and social application of specific technologies (See Figure 1). The hype cycle map how technologies move through different phases of hype and indicate whether certain technologies and products are good for the company in short term and long term. Marketers need to understand how and when to derive value from a product and also when to dispose of it when new things come along.

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Fig 1: Five Phases of the Hype Cycle (source: Gartner)

What’s new in 2014?

Marketing Talent Communities: Marketplaces have come up that support organizations and marketers to find and hire qualified freelance talent on-demand. A lot of time is saved in the process of recruitment of a variety of qualified writers, designers, strategists, data-analysts etc. Bloomberg Institute is one such example which financial employers approach to hire talented college students through a normalized screening test called the Bloomberg Aptitude Test.

Marketing Technology Integrators: The scope of digital marketing has expanded broadly. Digital marketers can’t claim to address the digital marketing needs solely through offering new Web Content and Experience Management or Portal platforms. As a marketer, the time and attention required to solving technological solutions takes time away from their focus on target customer. Thus, marketing organizations are hiring services and products that design and implement software and increasingly integration-oriented implementation data solutions.

Transactional Ads: This is an example trying to connect marketing with productivity and conversion. Online ad units that are activated by gestures, present a secure transaction or coupon. This reduces the time consumption of the viewer by enabling a person to request information or to buy the advertised product without leaving the webpage on which the ad appears. If old companies can figure out a way to associate more with transactions, they can boost their chance of surviving in the online market. [3]

Quantified self: It is a movement to incorporate technology into data acquisition aspects of a person’s daily life in terms of inputs, states and performance. Applications or services on mobiles and wearable technology that provide self-tracking analytics contribute to self-knowledge through self-tracking with technology. Biometrics have been identified that people never knew existed making data collection cheaper and more convenient than ever before. Recently, companies like Google and Zomato have begun to use location data of a user’s phone to recommend suggestions to buy things based on the proximity to various shopping outlets.

Social co-browsing: Collaboratively sharing of the web space with one or more parties from a social network, regardless of the physical locations of the partners. In real-time, multi-user experience isn’t just slapped on top of an application, it’s directly built into the core experience. Companies would have to redesign their user experience to support social co-browsing so as to provide a natural extension of for users to communicate and interact to enrich their real-time, collaborative experience. [4]

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Future Implications

Most of the technologies at the peak of their hype cycles today, will plateau in terms of productivity within the next two years. The window to gain competitive advantage in this fast-paced environment is limited. Thus companies must adapt themselves for speed, agility and rapid customer response.

Content marketing can be very resource intensive. Organization should use marketing talent communities and agencies as an escape valve for demand as a way to scale elastically as demand comes online.  The in-source and outsourced roles must be carefully mixed together in order to optimize productivity. Organizations should appoint strong leadership to ensure the success of their elaborate content marketing strategy.

Common view of digital-savvy customers should be kept in focus to ensure tight coordination of marketing activities in sync with the changing customer needs and reactions. Emerging architectures of digital marketing hubs should be carefully reviewed periodically to best utilize resources for most productive outcome.

With increase in social-marketing hype, the social marketing objects should be tied to the corporate vision of the companies. Analysis of how each social marketing activity will support that goal and provide a high return of investment. Gain from adapting to emergent technologies can lead to savings on media from improved efficiency or lift in sales from improved effectiveness of a company’s budget.

B2B management investments should be made into multi-channel, taking advantage of accessible areas in data mining, segmentation and behavioral analytics. Useful analytic results should be incorporated to the marketing strategy to further boost performance.

Criticism about Hype Cycle

Several disadvantages of Hype Cycle have been brought to light. Firstly, it is very difficult to objectively estimate the current location of a technology in its hype cycle. Secondly, terms such as ‘disillusionment’ and ‘enlightenment’ are misleading for people as they give a wrong idea about how exactly and to what extent a technology can be used for an organization. Also, there is no mention of how a technology transitions between phases and what all factors influence the shift. Lastly, several technologies are heavily correlated in terms of advancement through the different phases. The hype cycle does explain the cause-effect relationships between technologies and their impact on acceleration of technology progress and generation of excessive hype for a product.

References:

http://www.gartner.com/newsroom/id/2819918

http://www.theregister.co.uk/2013/03/02/steve_mann_on_google_glass/

http://techcrunch.com/2010/03/07/the-rise-of-transactional-advertising/

https://goinstant.com/blog/collaborative-customer-interfaces-and-social-cobrowsing

Will m-Commerce lead the way for e-Commerce in India?

As of now, India has 10 % population penetration in internet usage. This is in stark contrast to the global average of 35%, and much below the average of the developed world at 78%. Though the population base is big enough for a thriving e-commerce industry, India’s e-commerce potential at the moment is limited by a number of factors:

  • Infrastructure system – India still is a cash driven economy with very low availability of the credit systems. This is a bottleneck for many of the consumers willing to purchase goods online, and is the primary reason for India’s unique jugaad of payment via Cash on Delivery. However, many large players are wary of such a system that is manpower intensive, and requires time to collect the cash from the consumer’s doorstep.
  • Slow internet speed – India still has less than 5% broadband penetration among its internet users, compared to 30% globally. The slow net speed results in several payment gateways rejecting transactions because of the time lag in connecting to the server and getting confirmation. This results in poor user experience and discourages further attempts at shopping online.
  • Poor logistics infrastructure – For most of the e-commerce companies selling merchandise, the delivery of the good to the end mile is still critical. This requires excellent logistics and transportation infrastructure which has been a glaring concern in India.

To address such concerns, the government recently launched the ambitious National Broadband Plan with an outlay of USD 12 billion, which aims to bring 160 million households under broadband connection by 2016. This would take broadband penetration to that of the developed countries, opening up significant opportunities in sectors like education, business, entertainment and e-governance. However, it is feared that if we miss out on the intervening years, the Internet revolution could just bypass India.

This opens up an excellent platform for the private sector to contribute by pitching in and leveraging the strong telecom infrastructure already in place. With more than 67 million smartphones in the country and a ubiquitous 3G connectivity, high-speed mobile internet penetration far outpaces the broadband penetration. Though high speed fiber network is still important for organizations and institutions, mobile internet speed is sufficient for individual consumers – the main segment of customers in e-commerce.

Just as mobile telephony overtook the Indian wired telephone network thus revolutionizing voice-communication and sms, jugaad innovations in m-commerce are paving the way for a similar transformation in e-commerce. Mobile payments such as Airtel money and mobile to mobile transfer can circumvent the need for a credit card payment which has been so far unavailable to the mass public. Mobile e-commerce or m-commerce can really help capture the Fortune at the bottom of the pyramid. Already 45 % of the online users in India access so using only their mobile and contribute close to 3% of the e-commerce revenues. M-commerce is well established and trusted for small payments such as downloading ringtone and music. This suggests some trust is already established in the virtual mobile payment system.

Critics of m-commerce point to the small screen size of the handsets and suggest it would fail to gain momentum. However this argument fails to stand ground. Myntra is a leading online fashion portal and earlier had only 4% of its revenue coming in from mobile. However, they realized the advantage m-commerce offered in capturing the demand of Tier 2 cities and small town India, and after they redesigned their website to suit mobile screens they witnessed explosive growth in revenues generated from mobile purchases – they were able to garner 20% of their revenue from m-commerce last year. Additionally, 70 % of Indian e-commerce is for travel bookings and classifieds, which can be easily transferred to a small screen. The travel bus ticketing giant RedBus, attributes their success to presence in the mobile segment via apps that consumers quoted were its differentiating factors offering ease and convenience.

The m-commerce also offers other benefits such as geo-contextual shopping experience which is unmatched by any other media. Zomato and Justdial have shown leaps and bounds in their growth since they launched apps that use a consumer’s GPS position for better targeting of services.

To sum up, m-commerce is ready to take India’s e-commerce success to new heights. However it needs government and public support. The government should offer significant incentives such as promotion of FDI in e-commerce and telecom. High pricing of the 3G spectrum, and the failure to share 3G spectrum across competitors will only hamper India’s e-commerce growth story, and is bad for the consumer. Nonetheless, with year-on-year growth of 57%, m-commerce stares ahead for an exciting run.


Satvik Dudeja is a PGP1 student at IIM Ahmedabad, and a member of the Consult Club. 

Tablet computer: The new blue-eyed boy of India’s IT industry?

After a spectacular surge in the mobile phone segment, the Indian information technology (IT) sector is witnessing a new trend – the rise of the Tablet Computer. Tablet computers or simply, Tablets, are touch-screen operated mobile computing devices without a physical keyboard.

tablets_header_624x258

Tablet sales have recorded a robust growth ever since the introduction of the iPad in India, and if industry estimates are anything to go by, this is just the beginning. The Manufacturers Association of IT (MAIT) has estimated the segment to grow at a compounded annual growth rate of 40% from 2011 to 2015. In a country like India, where the penetration of the computer with internet in urban households is just 8 percent and as low as 1 percent in rural areas, this is nothing less than phenomenal.

The growth story

MAIT expects sales to grow from 0.95 million units in 2011-12 to 7.3 million units by 2015-16 [Exhibit 1]. A report by CyberMedia Research predicts an even stronger sales growth rate of 100% for the year 2013. While numbers may vary, there is a definite upward trend in the market. Global sales forecasts reveal a similar story, however the Indian market is expected to grow at a faster pace, occupying a bigger share of world Tablet sales by 2015 [Exhibit 1].

 

Exhibit 1: Growth Projections of Tablet sales and their share in global sales

Exhibit 1: Growth Projections of Tablet sales and their share in global sales

Usage Patterns

Due to their form, portability and weight, Tablets are primarily meant for internet consumption on the go. However, consumers now use Tablets for a variety of purposes ranging from the traditional uses like checking their e-mail and reading books to online social networking, accessing multimedia and gaming [Exhibit 2]. Due to the growing number of applications and other support features in the Tablet ecosystem, they have tremendous potential even in corporate houses, the industry and government offices. Various industries such as healthcare, public services and especially education, have already adopted the Tablet.

 

Exhibit 2: Popular activities on Tablet computers

Exhibit 2: Popular activities on Tablet computers

Consequently, companies have also altered their value propositions to suit this plethora of needs.  Reliance tabs, for instance, is focusing on the youth. On the other hand, Micromax is trying to penetrate the education segment through its FunBook. HCL Infosystems is trying to build applications for verticals like healthcare, pharmaceuticals, banking and financial services. By strengthening their marketplace, HCL aims to carve a niche for its Tablet computer. Similarly, Lenovo is providing content in vernacular languages, in an attempt to provide a local flavour to their Tablets.

 

Growth drivers

A major part of this initial demand has been fuelled by Government purchases. Kapil Sibal, the minister of communications and IT said, “This is our answer to M.I.T.’s $100 computer,” during the announcement of the Aakash project in 2010. Government efforts to subsidize the Tablet and also provide relevant training to teachers have gone a long way in boosting initial sales figures. However, the government does not plan to stop there. According to Suneet Tuli, the chief executive of Datawind – the company that supplies Aakash Tablets, the government ultimately aims to see an Aakash 2 in the hands of each one of India’s 220 million students. If this is true, Tablet sales will ride on the back of government purchases for a long time [Exhibit 3].

 

Exhibit 3: Share of Government purchases in overall Tablet Sales

Exhibit 3: Share of Government purchases in overall Tablet Sales

Affordability is yet another lever that has pushed Tablet sales upwards. Gartner analysts have identified three distinct price segments – the iPad, the sub Rs 25,000 Tablet and the Rs 10,000-Rs 15,000 Tablet. In addition, the prices of the low cost segment are expected to follow that of smart-phones which are currently expecting a downward trend in price. This availability at different price points has partly occurred due to tremendous fragmentation in the market. There are currently over 70 different models of Tablets launched by more than 10 companies and the number is only increasing.

Another important factor responsible for the growth potential of Tablets is enterprise adoption. Take the case of Bharti Airtel, India’s largest mobile telephony services provider. After presenting its directors with the Tablets, it has shifted from leather pads and files to a strict ‘iPads only’ policy in the boardroom. Other companies are also expected to realise their potential in the office and follow suit. In addition, the ‘bring your own device’ concept which is getting popular in companies, will also lead to greater acceptance of Tablets in these enterprises.

Availability of applications and multimedia consumption are other key elements that drive the growth in this industry.

Challenges

Despite portability, good processing speeds and a variety of applications at their disposal, the user experience is marred due to poor internet connectivity. Unlike in the west, 3G connectivity in India, is not robust and the Tablet has limited utility without a good internet connection. Scarcity of public wi-fi networks in the country also adds to the problems with connectivity. Tablet-makers like Samsung and Reliance have realised this issue and are taking steps to make internet access readily available. Reliance, for example, bundled their Tablet with 3G to observe an immediate impact on sales.

In addition, lack of consumer awareness about the potential of Tablets, as well as the inability of the existing application range to reach all segments within the country may pose as potential hurdles to the sales trajectory. To thrive in the market, producers will have to find solutions to these issues while not compromising on the overall value-proposition of the offering.

To sum it up, the same features of mobility, affordability of devices and low tariffs that have made mobile phones ubiquitous within the country, are expected to give rise to tremendous growth in the Tablet computer market too. Trends indicate that Tablets are here to stay. However, despite strong drivers like government procurement, corporate adoption and affordability, companies will have to find means to overcome the challenges caused by poor connectivity and lack of awareness. Only then will they be able to sustain the promising growth potential of Tablets in the country.

References:

  1. India tablet computer sales to double in 2013: research. (2013, January 7). Hindustan Times.
  2. India unveils tablet education initiative. Will the US follow suit? (2012, November 14). The Economist Group.
  3. Jayanth Kolla. (2011, August 8). Key Drivers for Evolution of Tablets in India. Convergence Catalyst Blog.
  4. Joji Thomas Philip & Gulveen Aulakh. (2011, August 27). The Economic Times.
  5. Pamposh Raina, Ian Austen & Heather Timmons. (2012, December 29). An Idea Promised the Sky, but India Is Still Waiting. The New York Times.
  6. Tablet market in India to grow 40%, to cross 1.6 million units in 2012-13: Study. (2012, October 19). The Economic Times.
  7. Tablet PCs have good growth prospects: Gartner. (2012, February 20). Business Standard.

 

– Sahil Patwa

Sahil is a PGP 1 student at IIM Ahmedabad and a member of the Consult Club. As an Associate Consultant at Ernst & Young, he was involved in the launch of India’s first domestic debit-card system and other projects in the electronic payments space. He is passionate about technology, new business development and Web 2.0. Sahil holds a B.Tech in Mechanical Engineering from IIT Bombay. 

Broadband in India

People can’t sleep because they have insomnia. I can’t sleep because I have Internet connection – Member of Internet Users Anonymous

Although there may not be an official group called the Internet Users Anonymous, the day is not far when this would be a reality. Internet has revolutionized the way we think and perceive the world around us, and it is still rapidly evolving and converging to a point where all forms of communication will be through data, and hence through the Internet. However, this day seems quite distant in India where Internet speeds still lag considerably behind other countries.

History of Internet connections in India

Internet services in India were first rolled out in 1995 by VSNL. However for the next 10 years Internet in the country remained very slow till 2004, when the Government formulated its Broadband policy, which defined Broadband thus –

An always-on data connection that is able to support interactive services including Internet access and has the capability of the minimum download speed of 256 kilo bits per second (kbps) to an individual subscriber from the Point Of Presence (POP) of the service provider intending to provide Broadband service where multiple such individual Broadband connections are aggregated and the subscriber is able to access these interactive services including the Internet through this POP.  The interactive services will exclude any services for which a separate licence is specifically required, for example, real-time voice transmission, except to the extent that it is presently permitted under ISP licence with Internet Telephony.

Internet penetration gained acceleration 2005 onwards, starting off with only PCs as the Points of Presence, and later moving on to mobile devices.

Broadband and 3G penetration in India

Source: Telegeography Press Release

Following the auction of the 3G spectrum and subsequently the 4G spectrum, the scene was set for the Indian market to move beyond the existing wired-line technologies to a more competitive and challenging wireless broadband market. As of December 2011, India has around 121 million users, which is the world’s 3rd largest Internet user base. Around 60% of these users access Internet only through mobile devices.

So what’s the problem?

Even though the growth of Internet users might look good, they are actually short of what the Govt. expected in its Broadband Policy, especially the growth in the broadband sector of retail customers and small enterprises. Typically the demand for Internet bandwidth within a country is driven primarily software exporters, information technology enterprise solutions (ITES), banking, software service providers etc. most of which could be classified under the BPO sector. However, it’s the retail customers and small enterprises provide the biggest source of access users that lead to voluminous growth and Internet proliferation, thus leading to an e-lifestyle. This has remained low in India, thus leading to a low level of penetration of broadband. Despite the Indian economy maintaining a 7-9% p.a. growth which results in a reasonably large market for Internet Service Providers (ISPs), the retail segment has not blossomed to entail creative, competitive, and cumulative business, mostly due to very slow Internet connections. According to 2007 statistics, the average download speed in India was around 256 kbit/s which was the minimum speed set by TRAI, whereas the international average was 5.6 Mbit/s during the same period. This implies that prevailing applications are restricted to e-mail and Web browsing with limited multimedia content. The pricing structure of broadband in India is arguably one of the highest in the world, making it an elite or luxury item. Which brings us to the main question – Why is there a scarcity of bandwidth in India?

Country Normalized price per Mb/s per month

South Korea

1

Sweden

1.91

Germany

15.68

United Kingdom

33.26

Poland

39.21

Luxembourg

55.79

China

68.18

Thailand

89.29

Sri Lanka

120.29

Slovakia

151.41

India*

260.62

Myanmar*

769.85

Source: On the State and Guiding Principles of Broadband in India – Ashwin Gumaste, Prasad Gokhale, and Asheesh Dhar, IIT Bombay

Where is all the bandwidth?

The scarcity of bandwidth in India can be attributed to multiple factors. One of the reasons could be the near-monopolistic policies which have been exhibited for the past decade at the landing points of submarine links. When it comes to bandwidth there is a near monopoly by Tata and Reliance. Attempts have been made to break this monopoly, with MTNL buying bandwidth from Tata and Reliance a few years back. How it came to be like this in the first place, even though BSNL was present is because the government thought that the submarine cables and the landing stations is a low profitability business. However, since then the Government and BSNL has built its own landing station in West Bengal. Indian enterprises use high orders of statistical multiplexing that cater to a large number of internal users with a minimum dedicated bandwidth, which combined with the monopolistic policies ensure that bandwidth remains either inaccessible or expensive, or both at the same time.

Another reason could be the usage-based pricing model which is currently deployed for retail customers in India, for broadband. It dissuades them from using Internet multimedia services extensively like voice over IP (VoIP), video sharing, streaming media, and social networking portals. Hence, retail users use less bandwidth-consuming services such as browsing, e-mail, and chat, because of which there is no demand for high speed Internet connections. This leads to next-generation Internet applications, content providers, and data centers that require more bandwidth becoming wary of putting up shop in India. This feedback loop creates the fallacy of local intranetworking, which explains the rise, penetration and success of cellular services for both voice and short message service (SMS) texting applications, significantly higher than other countries. In comparison, the flat-rate pricing has many advantages for both service providers and retail customers. Service providers save the overhead of deploying a system for tracking and billing usage. With a flat-pricing model, the ISP knows the amount of payments it will receive from its subscribers and can budget accordingly. For retail customers, this model provides convenience and a predictable fee. The flat rate pricing model has been an important factor in the growth of the Internet.

Growth of flat pricing model for broadband

Source: ICT Regulation  Website

To make matters worse, a unique provider-vendor business model has emerged, one that brings in the vendor to lease equipment to a provider, thereby sharing profits (between the vendor and the provider). This implies that the network is at the mercy of the vendor in terms of technology roadmaps, as long as the vendor can provide for the basic business needs of the provider. This also implies that the provider is more focused on its marketing and sales strategies than on the actual ownership of the network. In fact, most of the overhead is in sales and marketing, neither of which is directly responsible for good network planning.

Various telecommunication operators are deploying optical fibre-based national networks offering services like MPLS (Multi-protocol label-switched) core, IP-VPN and so on, but the benefit of this infrastructure isn’t reaching the end users because of poor “last mile” infrastructure (connecting the service providers to the end users) except in metropolitan areas. In select tier 1 cities, the incumbent provider has begun some basic deployment of fiber to the home (FTTH) and fiber-to-the-curb (FTTC). Although this is a good sign, at par with deployment in the developed world, the deployments are far too little to make a business impact. The key again is the absence of a comprehensive return on investment (ROI) model, due to the current broadband pricing strategy as a result of bandwidth choking.

What can be done about it?

We have seen that the growth of broadband in India has been severely impeded by factors such as prohibitive costs at the submarine links for service providers, a flawed pricing model, weak “last mile” infrastructure and a weak demand for high-speed Internet services. These should be tackled by unbundling the international cables, government stimulus for infrastructure development, and competition through regulation by employing a flat pricing model, thus fuelling the much needed rise in demand for broadband.

However, in the long run, the future of broadband in India is all about mobile. A rollout of fixed broadband will only be viable in high-density metros and not on a mass market and pan-India scale. As such, mobile broadband is the only feasible way forward and preferred by consumers due to the ease of getting a connection and the option of mobility. This probably explains the extremely prohibitive pricing displayed at the spectrum allocations of 3G and 4G. The entire world is moving towards an integrated device for all needs – phone, computer and entertainment, and hence mobile broadband will gain importance. Although India may be a few years behind schedule compared to the rest of the world, the situation is not going to be too different in India.

 

References –

On the State and Guiding Principles of Broadband in India – Ashwin Gumaste, Prasad Gokhale, and Asheesh Dhar, IIT Bombay

Broadband Policy 2004 – Govt. of India

3G Breaks India’s Bandwidth Bottleneck – A Telegeography press release, July 19th 2011

By – Achyuth Sanjay