Thursday, March 28, 2013

Hindustan Unilever Ltd forays into digital advertising space in a big way

In FY13, HUL is expected to triple ad spends in online and digital space, taking their share to 7% of its total ad spend.
Sometime in mid 2011, Nitin Paranjpe, CEO of the Rs 22,000-crore Hindustan Unilever, found himself taking some unusual lessons: on how to tag a person on Facebook, and tweet. Teaching the digitally challenged Paranjpe the ropes of social media was Karthik Perumal, the 32-yearold media services manager of HUL. "Today, there is a generation of consumers growing up only in the digital space," Paranjpe told ET in December 2012. "As the CEO of a company whose business revolves around the consumer, how can I not be clued in to it?"

Its learning — and in many cases, unlearning — that every HUL marketing manager is going through, though in less personalised settings. 

While Paranjpe has a personal coach, HUL managers have trainers from Google teaching them the vocabulary of the online world, acquainting them with technologies involved, and giving them a digital certification. That's at the back end. The back end is meant to pump the front end, which is fast changing in character. 

HUL is acquiring momentum in its online and digital drive. In FY13, it is expected to triple ad spends in those mediums, taking their share to 7% of its total ad spend, which was Rs 2,635 crore in FY12, according to analyst estimates. 

In FY14, this is expected to cross 10%. In HUL's media spend, online is now number two, after television. 

Hindustan Unilever Ltd forays into digital advertising space in a big wayIn 2012, HUL launched a massive India-specific initiative, BE Digital, which draws a complete digital road map for premium brands such as Tresamme, Sunsilk, Lakme, Close-up and Surf, for which the target audience online is high. 

So, against the old approach of thinking about digital after exhausting TV spending on a brand, HUL is integrating social media and mobile into the brands' marketing at the planning stage itself, as it did with Tresamme, a hair care brand. 

HUL created Tresamme Style Studio, a digital-styling website loaded with 100-odd videos on hair styling, a webcam mirror that lets women style along in real-time, and a tool that lets women test new lengths and looks on their own hair virtually. 

The company is also working on a semi-digital roadmap for its other brands, which will eventually be scaled up depending on a brand's requirement. 

"For some brands, the time has already come now, and others will catch up," says Hemant Bakshi, executive director — home & personal care, HUL. 

"Fact is, no brand can today escape being digital." According to Bakshi, young consumers say they spend three to four hours daily in the digital space, and there are more people accessing the Internet via the mobile than through computers. "The digital space has reached an inflexion point," he says. 

"A young girl I met in Bangalore said the phone was the first thing she checked every morning, and that she was more on the Internet than on television. The reality is that consumers in the digital space have moved on much faster than companies have." HUL, which has 35 brands in 20 categories, is pulling multiple levers in an attempt to catch up. It is training its brand managers. It has set up a 'digital experimentation fund' to encourage employees to pitch ideas for the online space, five of which have been rolled out. The company is seeking partnerships outside of its traditional advertising agencies. 

Marketing consultant Suman Srivastava says HUL still has to master the art of doing something unconventional to make an impression online. "Currently, HUL's digital strategy is complementing its television strategy, while the Internet is all about engaging consumers in a different way," says Srivastava, founder of Marketing Unplugged, marketing consultancy firm. Part of that re-orientation, adds Srivastava, involves HUL looking beyond traditional ad agencies. "A lot of real innovations are being done by smaller firms," he says. 

In HUL's case, Srivastava cites the example of Wheel's 'missed call' campaign as impact. In December 2011, an ad of Active Wheel on All India Radio in Uttar Pradesh and Bihar asked listeners to give a missed call from their mobiles. When they did so, they promptly got a call back with a recording of actor Salman Khan's dialogues from his film Ek Tha Tiger and his endorsement of Wheel. 

According to company estimates, HUL got 16-million missed calls in four months and that, by the end of the campaign, brand awareness scores for Wheel had increased 25% and sales by three times in the region. "We have a number of measurement techniques in place, but ultimately digital must lead to our brands becoming stronger and this should be reflected in sales," says Bakshi. An HUL internal research study showed thatYouTube delivered the highest return on investment (RoI) in terms of building a brand's awareness. 

Its hair care brand, Keratinology, recently launched a virtual hair studio on YouTube, which attracted over one-million views within the first week of going live. In some ways, HUL is following its parent. Unilever's digital ad spending rose about 40% in 2012-13, Jean-Marc Huet, its chief financial officer, disclosed in an investor presentation in January. 

Unilever, for instance, has struck global partnerships with Samsung, Sony's Arcade Creative Group and EA Sports. The Samsung partnership will involve advertising and content creation for smart TVs and mobile applications. Those pacts are in addition to those with Facebook, Twitter, Google and Apple. 

Back in India, Bakshi says HUL is benchmarking its digital efforts not just to those of FMCG companies, but also to other players such as Red Bull and Nike. "It is not just about quantity and spends, but quality, too," he says. 

According to an analyst with a foreign brokerage research unit, FMCG companies in India direct around 3% of their ad budget to online. This is a fraction of the 15% spent by auto and telecom sectors on the digital medium. HUL is taking big steps towards that.


No comments: