CMOs need to invest in marketing with caution for long-term profitability: Ashvin Vellody

In this interview with Adgully, Ashvin Vellody, Partner, Deloitte India, shares his thoughts about the current state of advertising and marketing in India, Deloitte’s advice to CMOs to keep investing in their marketing efforts, and the increased focus on sustainability.

Here, he is sharing his insights in the context of the report, titled ‘Deloitte Marketing Trends 2023: The India Story’. In the global report, to ensure a relevant, cross-topic understanding of marketing and the customer experience, Deloitte conducted two global surveys and 23 in-depth interviews with global executives.
“The advice we give to clients is to apply technology to the organisation based on its readiness to adapt to that change. Rather than cutting costs and going silent, it is advisable to invest in capabilities that’ll withstand the effects of a possible economic downturn,” says Ashwin Vellody. Excerpts:

What was the primary intention of Deloitte recommending CMOs to keep investing in their marketing efforts but with some caution in India?

Every inflection point is an opportunity based on how an organisation can leverage it to further its vision. For the CMOs, this is a good time to invest in bringing forward the initiatives that were on the backlog of things to be done. The advice we give clients is to apply technology to the organisation based on its readiness to adapt to that change. Rather than cutting costs and going silent, it’s advisable to invest in capabilities that’ll withstand the effects of a possible economic downturn. For example:

• By investing in AI/ML, customer data platforms & hyper-personalized value-based messaging, CMOs can dynamically tune their marketing and messaging to the evolving customer behaviours
• Being strategic with marketing investments allows for greater share of voice, eventually realising longer-term profitability improvement.

What are your thoughts about the current state of advertising and marketing in India and how is it similar to and different from the global scenario?

Every brand selling products and services to customers would like to get better at anticipating demand and designing an experience that really builds on the lifetime value for a customer. As we said in our Marketing Trends 2023 report, future-ready organisations in India are investing heavily to execute on this. M-commerce and e-commerce drive investments in search, video and social. The entire content creator ecosystem is exploding with advertisers, and regional macro/ micro influencers is a huge play in our markets.

Globally, it’s a mixed bag with mature brands holding on to their market approach, with a few cutting back and others investing more.

What are some of the areas wherein brands and marketers need to pay more attention to in your views?

Digital transformation and marketing are no longer optional expenditures, but essential investments if we want to understand our customer deeper.

Brands need to start investing in their customers and building their own differentiation, for example, introducing martech like customer data platforms, or implementing hyper personalisation strategies or becoming synonymous with immersive digital experiences to connect with customers where they are.

It is advisable for CMOs to build gradually as per the realities of the end consumer and the market, keep testing and focus on unlocking the human impact of the emerging tech, not the tech itself.

What, in your view, has made ‘sustainability’ a much-sought after factor in operations like production, packaging, etc.?

An increasing number of Indian consumers are finding sustainability to be a critical parameter for brand choice, making marketers recognise the significance of equity and environmental impact.
Indian CXOs are likely to have been personally impacted by climate events over the past year, with extreme heat, water shortages, and severe flooding emerging as top impacts, making it more real and a pressing issue to be addressed in India.

According to a Deloitte report, 88% CXOs agreed that with immediate action, we can limit the worst impacts of climate change. Some of these actions are: updating or relocating facilities to make them more resistant to climate impacts, requiring suppliers and business partners to meet specific sustainability criteria and even updating KPIs of senior leaders to include sustainability performance metrics.

How do ‘sustainability’ measures impact the consumer preferences in India in the short as well as the long run?

As awareness of sustainability grows, more consumers (led by millennials and Gen Z) are willing to pay a premium for sustainable products, even if they cost more as is evident with the rise of sustainable fashion, food and tech.

In the long run, sustainability measures are likely to have a more profound impact on consumer preferences. The demand for sustainable products is set to increase, leading to greater economies of scale and potentially lower prices. Convenience and cost are barriers to adoption, so affordable sustainability offerings will be instrumental in future growth.