While investment in the digital sphere still remains a fraction of total marketing spend on offline channels, it is fair to say that a slew of internet-based startups are rapidly changing the trend and forcing bigger, established companies to stand up and take notice or run the risk of losing their competitive edge.
One of the first entrants to the Pakistani startup ecosphere was the Berlin-based company Rocket Internet which started operations in July 2012 and focused primarily on capturing online customers. Their biggest venture and flagship investment in Pakistan, Daraz.pk, has a stated policy of investing only in online marketing as it is easier to track metrics such as conversions, page views and reach. This allows the company to tweak its campaigns based on those that are performing and those that are proving to be unsuccessful. Such tracking is simply not possible in the case of marketing campaigns which rely on television, print and radio advertising, which are more costly and do not offer an element of specific analysis. For a multi-brand and multi-label store such as Daraz, it is critical for the marketing teams to determine which products and categories are proving to be more successful in order to hone their campaigns further.
It is clear that the initiative by such early entrants is having a ripple effect across the digital sphere in general. One simply has to log on to their Facebook account or surf the internet to be inundated with adverts from several companies, selling products, services and even other categories such as vacation bookings and car rentals. Many new restaurants to set up shop in Pakistan have built pre-launch hype by promoting Facebook posts and continue to invest in online marketing. From a cost-benefit analysis it also makes more sense for small businesses to spend money on online marketing as it gives them more visibility and engagement at a considerably lower price. As competition heats up, it is likely that there will be even more visibility on digital networks.