Opportunities for the Indian technology industry

Holy Alliance

Marketing Disrupted

CMO

Technology Opportunities

Report

Indian Technology Industry

In this age of digital deluge, one of the most drastic changes has been in how people interact, choose, engage and buy. Today, these changes in consumer behaviour are redefining the brand-consumer relationship.

Marketers are responding to this change and finding new ways to engage with the new digitally empowered, always-on consumer. This has led to increasing technology spends by the CMO. By the end of 2017, the CMO is predicted to buy more technology than the CIO. For the Indian technology industry this represents a huge opportunity.

In the first ever research on the challenges of global marketers and its implications for the Indian technology industry, this NASSCOM- Offshore Insights report supported by SapientNitro, analyses the disruption that the digital environment has created in marketing.

The report was conducted to understand the new dynamics and prepare the Indian technology industry to leverage this huge opportunity by delivering value to the new stakeholder – the Chief Marketing Officer. It identifies new avenues of growth and calls out some imperative actions required by the Indian technology industry to take full advantage of the new opportunity.

Key highlights of the report:

The technology share in CMO budget is increasing- Over 50% respondents said spend on digital marketing and brand building will grow between 5-10% over the next 12 months and over 70% respondents find that their role in the CIO spends is growing.

The continuous evolution of the digital world has resulted in the creation of a phenomenal opportunity worth US$37 billion for the Indian technology industry by 2020, 17% of which will be purely creative in nature.

The share from creative services alone is estimated to create an impressive 1,00,000 job market by 2020

Growth of creative work is estimated to increase from 8% in 2012 to 35% by 2020

In a nutshell, the continuous evolution of the digital world presents a world of opportunities waiting to be explored by technology providers. While this hints at brighter prospects, the opportunity differs from the traditional IT services. To leverage this opportunity, the Indian technology industry needs to take a holistic view and think outside the ‘technology box’.

synopsisAn estimated US$37 billion worth of CMO opportunities will be created by 2020, 17% of which will be purely creative in nature.

8 9

CMO’S SHARE IN CIO SPEND INCREASING

2

3

Marketers think technology has a significant impact on the marketing organization

70% of CMOs feel their role in CIO spend is increasing

Over 50% of CMOs feel that they will spend more than 11% of the marketing budget on technology-based initiatives

Significant Increase

Considerable Increase

ModerateIncrease

NoChange

21%

14%

34%

31%

Economic instability

Technology factors

Change in customer preferences

Shifting consumer demographics

Growth of multiple channels

Increasing competition

Growth in emerging geographies

69%

48%

41%

34%

31%

28%

24%

4

1

6.8 billion mobile subscriptions - now equal to the world’s population.

2.7 billion people (almost 40% of the world’s population) are online.

More than1 billion people use social networks.Data is doubling every 18 months.

Mobile-broadband subscriptions jumped to

in 2013 from 268 million in 2007.

The world is going digital

2.1 billion

38%

21%

41%

5-10 (% increase in tech spends)

11-15 (% increase in tech spends)

>15 (% increase in tech spends)

CMOs

CMOs

CMOs

Source: Marketing, Disrupted. Research conducted by Offshore Insights.

10 11

Changing consumer behavior has transformed the CMO’s role

WORlD Of THE NEW-AGE CMO

1 CMO’s changing priorities

Critical priority

28%

17%

21%

10% 21

%

21%

10%

Analytics, social and mobile are as critical to the CMO as brand awareness

Shaping company’s public profile on

the net

Increase market reach through

Digital Marketing

Increase brand

awareness

Improve efficiency of marketing operations

Customer analytics

Increase and improve use of channels like social media, mobility etc.

Marketing automation

3Increasing use of social media & mobile apps 55%

52%

41%41%

38%

38%

34%

34%

31%

17%

Data explosion

Proliferation of digital engagement channels

Pricing demands across multiple channels & geos goes

Increasing marketing and tech connection

Need to develop technical skills

Speed of changing customer expectations

Need to develop digital marketing capabilities

Demand from CEO for analytics

Increasing number of partners

What is impacting the CMO’s business environment?

2

Digital marketing

34

48

10

Brand building

41

52

7

Data analytics

34 34

17

Social Media

24

45

24

New product introductions

3438

14

Customer relationship management

52

31

3

Traditional advertising

38

21

7

(Figures in %)

About the same/No change Increase 5% -10% Increase > 10%

CMOs are re-prioritizing their budgetsMaximum increase in CMO spends will be on social media & data analytics

Source: Marketing, Disrupted. Research conducted by Offshore Insights.

12 13

Multi-channel integration has become crucial for marketers, thus creating opportunities for the Indian technology industry

OPPORTuNITIES fOR INDIAN TECHNOlOGy PROvIDERS

2 Technology component in marketing spends is increasing

INDuSTRy vERTICAl

TECH-DRIvEN/DIGITAl MARkETING OPPORTuNITy

Huge Moderate Limited

3Size of the CMO opportunity Conservative estimates peg the opportunity for the Indian technology industry from marketing engagements at uS$18B

uS$18B

uS$37B

2020

- S

cena

rio

2

2020

- S

cena

rio

1

1

41%

31%

31%21%34%

10%

14%

Ineffi cient business practices

Increased skills required to manageNew

tools/

technology investm

ent

No

cust

omer

beh

avio

r

know

ledg

e in

dev

elop

ing

geos

lack o

f ven

dor ex

perien

ce

CMO held accountablefor business results

lack of budget

fu

nct

ion

al s

ilos

lack of intern

al

collaboration

lack of digital marketing

capabilities

38%

38%

21%

Insurance

Retail

Telecom

Technology

Banking and Financial Services

Auto and Manufacturing

CPG and Consumer Electronics

Energy and Utilities

Pharma & Life Sciences

Media, Leisure & Entertainment

Business Services

Others (including Public Services)

What are the top issues concerning marketers today?

Source: Marketing, Disrupted. Research conducted by Offshore Insights.

Really understand your consumers’ technology needs. Today, there are a plethora of new-age technologies to choose from. Precise insights into your consumers’ need should guide which ones you choose.

3

Take baby steps before the sprint. Invest in technology by all means, but with a bit of caution. Start with small, yet focused initiatives before investing in larger marketing systems.

Be a keen observer of the technology landscape. Innovative technologies like mobile, analytics and personalization are fuelling the development of new-age applications and devices. Identify industry-specific frameworks and applications that can be calibrated to enable easy and efficient deployment.

Can they walk the talk? Most agencies have a tendency to promise and project much more than what they can actually deliver. Take these claims with a pinch of salt and keep an eye out for the new breed of agencies that have a deep understanding of how technology & creativity merge.

37

success mantras for the new-age CMO

6

Leverage your own CIO. Marketers today have a deep understanding of technology’s role in marketing, but lack the skills to access it. Engage in healthy and regular interactions with your CIO and his technology network with an open, positive mindset.

2

4

6

5

Hone your ‘marketing and creative’ expertise. Creativity begins at home. With CMO organizations looking at a one-stop-shop for their diverse marketing requirements, invest in and build creative capabilities in-house. To begin with, invest in labs and studios. This will help deploy the CMO’s digital strategy effectively.

Sharpen the tip of your spear. Empower your sales & front-line staff by giving them an understanding of how to be marketing-friendly. Use your partnerships with marketing agencies to learn how to interface with the CMO organization.

Develop sector-based insights. This is the age of customized digital marketing solutions for specialized industry verticals. Identify data-focused sectors, get insights into how these sectors adopt technologies and develop relevant products, platforms and services for them.

37 success mantras for the new-age

technology provider

62

5 6

Don’t miss the forest for the trees. There is an immense potential that exists for the CMO’s technology spends. Understand the competencies and partnerships required to help achieve that potential & then empower your company to utilize the opportunity.

1

Strengthen industry ties. In addition to developing in-house creative capabilities, forge seamless & symbiotic relationships with marketing agencies.

3

Boost marketing technology capabilities. Technologies like big data, mobility, analytics, visualization, personalization, web and digital assets management are redefining the way enterprises work. Set your sails in alignment to the winds of change. Endeavor to constantly upgrade technology capabilities and develop new products and services.

4

Develop a technology mindset. Don’t get sucked into the technology-vs-creativity vortex. It’s now technology + creativity. Technology is a powerful enabler of larger business benefits. A new-age marketer is tech-friendly.

1

Source: Marketing, Disrupted. Research conducted by Offshore Insights.Source: Marketing, Disrupted. Research conducted by Offshore Insights.