The Hindu Business Line : `The Internet needs its proper cultural tweaks'

He describes his journey as one from the IIT in India to the IIT in the US. Yes, a product of IIT Madras, Prof Paul Prabhaker is currently Associate Dean and Associate Professor of Marketing at the Illinois Institute of Technology's Stuart Graduate School of Business; in short, a journey from technology to business. It's thus hardly difficult to guess what this academician specialises in: technology-driven business strategy.

En route to his second IIT, he completed his MBA from the Indian Institute of Management, and then went abroad to do his MS and Ph.D. from the University of Rochester.

Prof Prabhaker teaches e-commerce marketing, marketing research and strategy. Researchers such as him bridge the gap between the academic and the corporate worlds, he tells Catalyst in an interview. He also has futuristic views about how the media will evolve in the time to come.

The professor, for whom Chennai is the first home, was in the city recently as a representative of the Stuart Graduate School of Business, which is providing academic support to the Great Lakes Institute of Management, Chennai.

Read below his views on technology, marketing, media and the future:

How a marketer looks at new technologies

From the eyes of the consumer, quite unlike an operations person, who only wants to know how a new technology would help the company's bottom line. While choosing a technology, the marketer should see how it benefits the consumer. And in this, he doesn't have too many options: the technology should either help reduce the consumer's spend on the product or should create higher value.

The issues that Prabhaker looks at while advising companies

Corporate research is always closed — there is a concern for the bottom line and there are deadlines. There's, thus, tremendous pressure to meet the goal within the time. No such hassles for academic research, which is more fundamental and open. There's no time limit. So, people like me try to bridge the gap between the two different worlds. The advice to companies is not regarding how to use the Internet, for which they already have experts. When I talk to companies, I talk to them about things such as what is the call centre of the future, how do you take caller phones and marry it to a PC, or take that combination and marry it to a laptop or a PDA. What I tell them is based on what's happening in the academic world.

Cultural issues in Internet marketing strategies

Internet can't be put in just like that. You have to surround it with proper cultural tweaks. The need to automate processes in India isn't as huge as in the West, as there's a lot more human capital available here. Also, people can do certain tasks much more efficiently here. In the West, however, they necessarily have to automate, for cost reasons. Questions such as `Is online banking a luxury or a necessity?' are more pertinent in the Indian context than there. The answer for such questions won't be the same in Chicago as it is in Chennai.

Effectiveness of advertising

Of course, ads are effective. There is only a finite number of ad slots on television, or any other medium. But the demand of an ever-increasing number of advertisers for access to people's minds is growing. They are competing for scarce resources. However, some types of advertising work more than the others.

Has advertising on Internet recovered?

The bubble may have burst a few years ago but the market is slowly starting to find its more natural level. The industry, knowing only print and broadcast advertising till then, classified Internet advertising into print, which was a mistake. So, measures that were used to evaluate print advertising, like cost per thousand readers, were used for Internet too.

Only now, people are starting to realise that the medium is a hybrid of broadcasting and print. In order to make online advertising more effective, I am developing an `index' that will indicate, at a general level, how effective the medium is for different sectors.

There are different technologies but not all of them would be equally effective for all sectors. For instance, not many would go online to check out about food products (Kraft or Sara Lee) but they would like to find out about cars of other high-ticket items. A food products company, on the contrary, can use online to build a virtual community of customers.

The online medium can be used to sell, build relationships or virtual communities. But you have to know the nuances of the fit between the various technologies and your product rather than blindly jumping in and asking for this many banner ads, which will only be a waste of money.

The industry is already realising the limitations of some its formats; for instance, pop-ups, which Internet surfers are increasingly getting irritated with. We are learning what will work and how much acceptance there will be. You have to be careful about what to put, and how to put it, in order to capture the interest of your customer.

How mass media's faring

In the US, three big television networks — ABC, NBC and CBS — together accounted for 95 per cent of TV advertising, 15 years ago. Today, they don't even account for 50 per cent. Smaller companies that have very specialised skills are now being valued. If you want to know how to place a banner ad, or how to get your name up on the Google list, or how to send an electronic coupon, there are specialist companies that you can approach.

There are numerous new ways of personalising your messages, which is a sign of good advertising. Good advertising should appeal to each individual depending on what mode they are in, how much money they have, the demographics. Everything should be customised at that level.

For instance, you are walking past a car dealership. The building will sense your presence, the company will come to know who you are and will send you a message: this will be the future of advertising. The downside is lack of privacy. Information will become a public good from being a private good.

Integration: cutting-edge marketing

Direct marketing, mass media, sales promotion and PR have to be integrated. Direct marketing has a role in addressing a message to target market. But it's weak in capturing demand. So, you have a call centre. That's a simple example of integrated marketing communication. Each technology, individually applied, can only play a limited part. You have to combine all.

Seller, psychologist, sociologist and technologist, all in one, that's the future marketer for you!

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