Jan-Mar 2014

Going Digital: Small and Medium Business Edition

The recently held Digital Summit at the Indian School of Business (ISB) was inaugurated by a special workshop that provided small and medium businesses with some useful tips on taming the digital revolution.

Small and medium businesses (SMBs) globally have been slow to catch on to the information technology (IT) bandwagon, whether it was due to lack of access, affordability (both financial and other risks) or ignorance. Digital marketing is a critical component for enabling SMBs, a leveller where David meets Goliath and small and medium are adjectives only in mind. Now, nearly a decade into the digital revolution, digital media, digital marketing, e-commerce and social media are no longer buzzwords within the professional reach of a privileged few but have taken root in the mainstream.

The Digital Summit, organised on August 30- 31, 2013 at the Indian School of Business (ISB) was inaugurated with a workshop on digital power for SMBs. Innovative in its concept as also in execution, the workshop intended to help answer the questions of how and where an SMB owner can go “digital”.

Understanding Digital Presence

Amit Mehra, Assistant Professor of Information Systems at the ISB kick-started the workshop by introducing the theme and providing a framework for the discussions and sessions that followed. Using the concept of the “purchase funnel”, a stepwise marketing decision-guide, he analysed how business goals of firms can be approached within the framework of digital media. Through local Indian examples like Kalyan Jewellers and Pal Dhaba, popular small businesses that are already implementing digital media strategies, participants were exposed to the nuances of the theme. In examining a range of media options such as email marketing, sponsored link advertising, search engine optimisation (SEO), social media and blogs, participants were made to reconsider branding and media strategies.

Professor Mehra offered interesting insights on commonly faced issues such as comparing payment options, viz, cash cards versus cash on delivery options. He shared tips for increasing collection ratio through email reminders, customer segmentation and also promotional techniques like coupons and rewarding brand loyalists on social media.

Marketers also learnt about other current practices in digital marketing, like the retargeting of customers through cookies and path dependence of advertisements online. Interesting discussions on issues of ethics in such practices aided comprehensive understanding among participants. The session also emphasised the power of analytics and design of experiments to enable good decisions in online marketing.

Professor Mehra concluded the session by focusing on opportunities offered by owned, paid and earned media. These avenues include privately owned media like websites, paid access to media space in the form of advertisements on portals and aggregator websites, and the media reach generated through customers and stakeholders willingly providing free publicity through social media.

Digital Landscapes in India

The second session was organised by digital media experts from Google. Google has designed various popular and free tools specifically for the benefit of SMBs. Mrinalini Chakrabarty from Google referred to the case of Tanjore paintings as an example of small, niche businesses going digital and reaping benefits. While emphasising the reach, precision and economies associated with digital marketing, she also cited various statistical trends as evidence of an exponential rise in web use, SMB presence and video content, indicating the potential of the opportunities that can arise.

In highlighting the contribution of the internet economy to the overall GDP, Chakrabarty pointed to a 2012 research study by Boston Consulting Group titled “The Internet Economy in the G20”, where India scores higher than the developing market average, though still much below developed countries. The Comscore report for 2013 put India as the fourth largest market for search engines and third largest for internet using population. It recently overtook Japan. With Google controlling nearly 90% of the search engine market, the experts recommended integrating SEO and marketing strategies and developing multiple device and multiple platform applications for optimal digital media utilisation.

Participants were also given a hands-on opportunity to interactively design and implement digital marketing strategies in the workshop. The Google team members Syed Malik, Pooja Srinivas, Saumitra Pant and Bhavana Moryani took turns to demonstrate Google’s easy-to-use yet powerful tools for digital marketing. Apart from a detailed overview of webmaster tools required by a digital marketer including SEO, AdWords, AdSense and TrueView, the Google team showed a suite of popular tools for marketers with live examples. Among them were Google Trends, Brand Impressions and Global Market Finder, tools that help marketers plan, design, execute, monitor, analyse and report on marketing campaigns.

Analysing Campaigns

If the proof of pudding is in its eating, the power of digital marketing lies in the numbers. The ability to track campaigns through their customer’s online footprints gives much power to marketers. Whether it is to design experiments to plan optimal strategies, or to fine-tune and implement mid-course corrections or to assess accurate return on investment on the marketing rupee, the control provided by digital marketing is unique and dynamic. But then how does one measure and track this value? Suman Ann Thomas, Assistant Professor in the Department of Marketing at the ISB, led the participants through the nitty-gritty of the calculations while keeping business goals in mind.

To perform such analytics, one needs to track metrics meeting well-established and tested criteria. Using the SMART – Singular, Measurable, Achievable, Relevant and Timely – approach, metrics are selected and designed to yield desired outcomes..

The objectives for digital marketing could be along the entire marketing value-chain. The first step is to benchmark the customer base and identify potential prospects. Digital marketing analytics could be used to identify new prospects, increase size of prospects’ base or to identify and reach existing customers for future sales.

Second, the engagement, activity and transaction levels or frequency could be increased or made more effective. For example, more frequent site visits, with more relevant messaging, could then lead to higher communication effectiveness. The next step is to track and convert higher activity to higher sales through an analysis of patterns and activities in the digital marketing data.

Last, it is not enough to end the marketing cycle at sale. Long-term customer engagement leads not just to repeat sales, but also a valued relationship increases brand equity, acts as a word-of-mouth marketing channel and build greater continuity of sales relationship-all important effects of digital marketing.

A representative case study on SEO by Air France puts the analytics of digital marketing in perspective. Built around pillars of customer analysis, competitor benchmarking and Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis of self and competition, the marketplace analysis helps set the stage for further analysis.

In the execution stage, one must build the elements for analysis. A sample list for these is shown in Figure 1. In order to get these finer details one needs to do exhaustive customer study and market research. Surveys or other primary and secondary data sources are required to extract the required information.

The intuitive metrics used for SEO analysis in internet marketing are:

• Cost per impression (CPI)

• Cost per click (CPC)

• Click through rate (CTR)

• Transaction conversion rate (TCR)


Figure 1: Elements for analysis Using these simple metrics, one can derive marketing outcome metrics. Return on advertising (RoA) spends simply captures efficiency in terms of revenue generated per unit amount spent on advertising. Another metric of interest is probability of booking – represented by CTR multiplied by TCR. This calculates the probability of generating a sale from a delivered impression. Mapping booking rates and costs per click along with volumes (represented in the graphic below) enables better and efficient decision making. There are other similar techniques to plan campaign level strategy and increase impact on key performance indicators. Professor Thomas concluded with her marketing analytics mantra, “An appropriate framework, right metrics and a comprehensive analytics toolbox.”

E-commerce for SMBs

The size of the Indian e-commerce industry is estimated to be around US$ 1.8 billion in 2013 with over 14.3 million online shoppers in India. Processes and features like payment, store location, in-store comparison, discount coupons and self-checkout, are fast changing with the increased use of mobile e-commerce.

Alok Agarwal, Regional Marketing Director, eBay explained how popular sites like eBay play the role of creating two-sided markets, simultaneously attractive to both buyers and sellers. On one hand, the market platform must promote low-cost entrepreneurship that is profitable and on the other, it should translate into value at lower costs for the customer.

Consumer behaviour in e-commerce is being shaped by increasing mobile penetration and the growing role of social media as a recommendation engine. As a sourcing destination, Indian e-commerce entrepreneurs are exporting among other products, natural diamonds, fashion accessories, homeopathic medicines and saris to the United States (US), China, United Kingdom (UK) and South-East Asia.


Large businesses were the focus of IT, telecom and other technological advances but SMBs have emerged as a segment – “the long tail” – that no one in digital marketing can ignore. The time of “the long tail” has truly arrived. There was a significant amount of business activity in SMBs that was hitherto untapped. However now, such businesses are increasing the scope and breadth of their activities through aggregator sites like Google and eBay. A roadmap, strategies, shared experiences from execution and a step-bystep evaluation of the journey all help prepare an enterprising SMB. The day-long workshop delivered exactly on that promise.

Sandeep Khurana, Fellow Programme in Management specialising in Information Systems at the Indian School of Business (ISB) contributed to this report for ISBInsight.

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