Allies In The Digital Ecosystem

Published by MBA Skool Team, Published on October 09, 2015

We see technology everywhere. We have adapted smartphones, social networks and online commerce very well. In the context of the Digital India initiative, we have to ask ourselves. Have we crossed the tipping point of the digital age, or have we not reached there at all?

To answer this important question, we need to look at the elements of the digital revolution. We need to see who are lagging and who are leading in the race to adapt the digital opportunities.

Image: pixabay

The four stakeholders for the digital age are Customers, Businesses, Advertisers and Infrastructure providers. A truly digital India would see all these stakeholders coming together and creating the new Media Ecosystem. Let’s see how they are positioned.

Are the customers ready?

The consumers’ adoption of Internet services has been rising steadily over the past five years. The total user base has climbed to more than 250 Million. Out of these, only 14 Million people have fixed broadband connections, whereas China has more than 190 Million broadband subscribers. When you look at the proportion of broadband users per hundred, you see that India has ranks much lower than other emerging nations (See Figure B).

However, when you take into account the rise of mobile internet usage, we see a different picture. An average Indian subscriber uses 680Mb of 3G data per month. With over 70 Million 3G subscribers, there is a huge opportunity to expand to 130 Million 3G enabled devices in the economy. Increased usage for mobile internet signals that mobility will be the game changer for India.

Are the businesses ready?

Income Tax department is investing $2.3 billion on “Project Insight" which aims to use data analytics to identify tax evaders. It is evident that managing Tax obligations for such a large population renders search and seizure techniques obsolete. Increase in productivity due to automation has enabled TCS, Wipro and Infosys to shed over 100000 people from its ranks this year.

Indian companies are spending a significant part of their resources on digital transformation. They are also catering to consumers online.According to an IMRB estimate for 2012, Travel was biggest spendor on Display ads online, followed by Banking/Finance and Automotives sector.

Evidently so, rushing ahead towards the digital because everyone else is too may not be a good idea. Digital strategy should flow outwards from the business objectives. The senior management should carefully map Business Key Performance Indicators (KPIs) to their digital strategy. These KPIs should ultimately be mapped to metrics for the digital performance.

Are the advertisers ready?

Indian advertisers have been in the business for a long time. Boasting decades of experience in creating content and buying media, they are surprisingly good at it. We have seen several acts of creativity, right from Cadbury’s “Kya swaad hai zindagi ka” to Surf Excel’s “Daag Ache hain”. Advertisers see vast opportunities in the digital space. Access to over 200 million internet users, infrastructure for a two way communication, tools to measure reach and effectiveness are some of the salient features. The stage is set for the next successful and contagious brand campaign that will be remembered for a long time to come. But has that really come to fruition?

The challenges for advertisers are inherently internal and systematic in nature. The first issue is that of managing communication across several channels and deliver content to an audience that can be stirred by a mere act of unauthenticity. Take a Lowe Lintas’ Idea Internet Network campaign for instance. The second concern, as the internet becomes the primary source of entertainment, users are more likely to switch off advertisement. Just like the remote control tested advertisers patience in the 1990-2010 period, proliferous usage of ad-blockers and spam blockers means the target consumers are distant and hard to reach.

The solution is to come up with entertaining content and manage interests of stakeholders (telecom operators, Internet platforms, content creators).Exploiting Media convergence would differentiate successful advertisers from the rest. However, measurement scales across the platforms vary a lot. Television viewership measured by TAM and aMap, newspapers readership are measured by IRS survey. The internet has its own measurements. Convergence in scale should follow media convergence as Internet becomes mainstream.

Is the infrastructure ready?

The European Union is all set to create a digital single market. Standard rules for buying goods online, cross-border regulations and reducing tax burdens on businesses.EU expects to generate $465 billion for its combined economy and produce 3.8 million jobs. To pull that off, EU needs to do structural changes to how it does business.It needs to be backed up by enterprise level networking capabilities,hardware and human capital.

In context,Indian Infrastructure leaves a lot to be desired.Telecom operators have pushed for deeper mobile internet reach. However deeper penetration of high speed broadband services is essential for a truly digital tranformation. Fixed Broadband enables continous connectivity and higher data speeds at affordable prices. Connecting the national internet backbone to smaller towns and cities may be the next step for digital india initiative.

Providing public services through digital media, will require enhanced digital literacy, improved connectivity and secure, enterprise level software tools.

As all these elements come together, we will see a truly digital transformation.

This article has been authored by Vinay Tyagi_IIM Ranchi


Financial times 3G usage



Figure A

Figure B

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