My background in product marketing makes me ambivalent as I write this post. On one hand, I have always felt that one problem many Indian web startups face is the over emphasis on the technical aspects of their product and lesser sensitivity to understanding actual usage behavior and how to cultivate the product, its positioning, its pricing, its promotions etc. (this is to be expected, as most of the startup creators are typically techies, and given their training and orientation, they are less sensitive to product management issues). But when I read about the ibibo Blogger Hunt Contest and the way it is progressing, one can’t but wonder how could MIH, a mid-sized, fast growing internet company of international parentage, (and which undoubtedly must be having its own team of thoroughbred product managers), launch a marketing promotion, as ill conceived as this.

Without getting into the specifics, let me point towards a bunch of blog posts, that should give you a good idea of what’s cooking. Rashmi Bansal, who writes the immensely popular blog Youthcurry, says in her blog post (Rs 1.5 crores for this crap?) – “..you can’t stimulate blogging by paying out huge sums to people who don’t care about blogging in the first place…”. ContentSutra’s earlier post (MIH offers Rs1.50 crores to bloggers..why?) questions the company’s motivations in running this contest. Rajiv in his blog post (Junk blog leads Indian blogging contest!) chronicles the farcical way, the contest is unfolding. To me, the contest is reminiscent of the controversial startup Payperpost, that pays bloggers to write about advertisers products (Payperpost comes up for discussion frequently on TechCrunch).

I am all the more surprised, because this contest comes against the backdrop of the podcast interview, I had recorded with the CEO of MIH for Podtech’s India channel, a few weeks back. He had shared his perspective of the Indian web space and MIH’s plans for India, which had seemed quite remarkable.

There is nothing wrong in running promotions for popularizing your product. And there is also nothing wrong in incentivising your top performers. Every company does that (we are ourselves contemplating a promo for our product). But this contest’s underlying mechanism, its duration, its quantum, cash incentives etc raises inherent questions about the very spirit behind it. The quantum of the incentive is eye popping (inspite of being spread out over an year). Every marketing promotion will have some kind of manipulation (or pilferage). In fact, it is common for seasoned product managers to actually write off a small part of the promotion expenses (3- 5%), in anticipation of malpractices. But the rules of the ibibo Blogger Hunt Contest are so obviously flawed and open to manipulation, that one can’t but question the wisdom of its creators.

That apart, what bothers me MOST about this contest, has little to do with the contest itself. It relates to the erosion in the long term equity of ibibo, which appears to be MIH’s flagship brand. One of the lessons you learn within the first few months of a product manger’s stint is that, for marketing promotions, cash incentives (while being effective) don’t add anything to the brand’s long term equity. In fact, they decidedly lower the perception of the brand in the consumers’ mind. That’s why cash incentives are usually reserved for the intermediaries (i.e. agents, dealers) and seldom used for end consumers (this factor may vary with the product type, but pretty much applies to online web products). Surely the marketing team running this promo, is aware of this reality. Their decision to launch this promo, thus flies in the face of conventional marketing wisdom, besides displaying a complete lack of imagination on their part.

I think MIH is a company that we are going to hear a lot about in the coming years. Their move to acquire Bixee & Pixrat earlier, seemed a very prudent step for them. But while this promotion might win them some brownie points in the short run, it is likely to devalue their brand equity amongst the Indian Web community at large. I hope this is the first and the last such endeavor from their side.

I’d like to share this interesting personal experience that indicates the growing penetration of the internet in India. Uzanto (my startup) uses ICICIBank for corporate banking and every month, along with the account statement, the bank sends a bunch of promotional mailers. Usually the mailers pertain to free debit/credit cards, discounted foreign holidays blah, blah, blah… Needlessly to say, they all land promptly in the dustbin.

Last week I was pleasantly surprised to find the following mailer from the bank. In its attempt to incentivise corporate clients to use its corporate internet banking facility, ICICI bank is offering Google ads worth 1K. This is what the mailer reads “Get premium advertising space on Google worth Rs 1000 free; all you need to do is to make 2 online financial transactions on your roaming current account. Thousands of prospective customers could reach you through Google”. The mailer campaign is obviously targeted at the bank’s SME customers, many of whom must be in the software/internet space.

Its a novel idea and could work well for the bank. This must also be music to Google’s ears, for its Adwords program is being used as a standard of exchange (almost like currency). Buts thats not why I am writing about this on Webyantra. I mention this as a proof of the growing influence of the internet (in India) in not just the way we run our businesses, but also various aspects of our daily life. The internet will help propogate products/services that make things simpler, faster, cheaper, more widespread etc. This mailer is just a pointer to the shape of things to come in future.