Trends in India

New media outsourcing to India gathers steam

Mumbai: It's being touted as the new outsourcing wave with foreign companies beginning to outsource new media work like online reputation management, data mining, influencer identification and crisis management directly to small and mid-sized Indian social networking agencies. This, even as big agencies continue to sub-contract work to smaller agencies in India. Mahesh Murthy, Founder of Mumbai-based social media company Pinstorm, prefers not to call it outsourced. He would rather call it "in-sourced" work. "This is work for marketers handled directly by our own offices outside India. There are other firms that sub-contract work from agencies overseas - the difference is that we work primarily with our own clients," he says. With overseas offices, Murthy's company has done marketing work in India for overseas brands for over five years. What is new is that his company is now doing a lot of social media monitoring and responses for global brands in addition to the search and display advertising that it has been doing so far. Murthy's company is just a case in point. "Customers talk in real-time on the net, and foreign companies realise that the suite of online monitoring tools are not enough. You can have programs search for conversations. But you will still need people to manually look for context. Social media data are not structured. Automated programs are not intelligent enough to understand sarcasm on the net, for instance. We need human beings to extract juice out of a conversation," notes Hareesh Tibrewala, Social Media Strategist and Joint CEO at SocialWavelength. The business opportunity is huge. There are over 1 billion users from all around the world who log onto sites like Facebook, Twitter, Orkut and YouTube (and now Google+). India, it is estimated, has over 50 million such users. Worldwide spending on social networks will reach almost $6 billion this year, amounting to $3.1 billion in the US and $2.9 billion in international markets. Moreover, the average revenue per user of social networks are expected to touch $3.50 this year, according to Deloitte. And while social networks may still account for a negible pie of the global ad spend, eMarketer estimated Facebooks ad revenues alone at almost $2 billion in 2010 and over $4 billion in 2011 (with $2.2 billion of that in the US). Cost arbitrage is the primary reason that foreign companies, especially those from the US and UK, would want to outsource work to India. "By outsourcing social media activities (in part or full), a brand can cut its social media spend by anywhere between 25 percent 60 percent and still achieve the same, if not better, results," asserts Adhvith Dhuddu is chief executive officer of AliveNow, a social media agency based in Bangalore. Other agency players like Tibrewala concur. For instance, an online monitoring project which could cost around $40,000 in India would cost just around $15,000 if done in India. "These are ball park figures," says Tibrewala who has around 3 US clients. "This will be a focus area for us next year. We hope to crack more deals." His optimism is shared by the likes of Rajiv Dingra, CEO & Founder, WATConsult and Moksh Juneja, CEO of Avignyata. "We have seen interest from foreign companies since 2008 but now the momentum is picking up," says Dingra. Juneja concurs that he has been seeing interest even from companies in Malaysia. However, unlike IT outsourcing, social media outsourcing poses many challenges in the form of price undercutting, cultural differences and skilled manpower rather than just wage arbitrage. "This is not about cheaper manpower but about manpower trained in using advanced technologies and tools as well as people who can understand sentiments across cultures, and draft responses in a brand's tone of voice," notes Murthy. For some of his global clients, Murthy's team needs to track, tag and determine responses to online mentions more than 10,000 times a day and do so seven days a week. He adds that "the biggest challlenge is actually in sensitising the client that they need to make changes to their

organisational chart to respond effectively". Most marketers have silos for corporate communications, investor relations, brand marketing, product marketing, HR and customer service. Mentions in social media need to be handled across all these silos and unless it's done with rapid and effective coordination between these departments a marketer is bound to fall short in their efforts. The second challenge is price, explains Murthy. "As always, we Indians have been heroes in steeply undercutting each other - we've seen quotes from smaller companies where they promise an unthinkable level of service for Rs. 7,500 a month. It is a challenge to convince a client that they are not going to be well-served by anybody who earns as little as this. Language and culture are lesser challenges, in comparision." he rues. Dhuddu, on his part, advises his clients on "what can be outsourced and what is not to be outsourced immediately". He believes that backend work for managing social media such as developing an application or custom tabs on Facebook; having a content writing team help with Facebook status updates or blog articles; assistance in uploading videos and helping in tagging, titling and optimising them; assisting in data collection and data mining of keywords (or some kind of social listening to conversations on Twitter, Facebook, YouTube and other sites); getting design options for landing pages, blogs, apps, etc., can be outsourced. "What should not be outsourced is creating and establishing a social media strategy for the brand. A company in India, Vietnam or the Philippines, cannot and will not be able to assess your brand, what you stand for, your customers and your market, and therefore cannot help in coming up with a strategy for the brand on social media. This must either be done in-house by the companys social media team, or by the brands domestic agency," asserts Dhuddu. Dingra concurs somewhat when he says that the "chalta hai" attitude of most Indian will not do in this space. He concludes: "They're willing to give business but are very particular about timely exectuion."