dnaunion moving forward to attract new businesses
The dnaunion group held a press conference on August 4 on “Innovation in Marketing - A Strategy for Business Growth in Recession". The event was attended by Managing Director of the dnaunion group and holder of the Medal of Excellence in entrepreneurship Nasser Pashapour Nikoo, member of board of directors of the dnaunion group and Managing Director of Certius Company Gerhard Barcus, and member of the board of directors and Managing Director of Eshareh Advertising Agency Mohammad Mousavi.
Speaking at the meeting, Nasser Pashapour Nikoo said: “In recent decades, developments in digital technology have changed the image of businesses around the world. These developments have created new brands or eliminated some of the most powerful brands in the world. These developments, which created the Web movement, started in 1990 and are projected to last five decades and follow a growing trend till 2040. At present the digital age is located in the middle of Web Three: An age when although the audiences live in the real world they spend hours in the digital world. Such developments have created a planet in the world in which all the audiences are connected to each other through information. In 2018, the average number of communication devices connecting the audience was 2.9, which will double in 2022. Therefore the audiences in the contemporary world are easily connected to each other.
In such a world, the content still plays a key role. Of course, the meaning of good content will change dramatically. The good content is the content that has bigger numbers of viewers. Being increasingly viewed will connect us to a vast source of information. Such information helps the audience to be analyzed based on the likes and the content they see. Such an analysis would lead classification of the individuals on the basis of demographic features towards their classification based on analyzed patterns. Accordingly, the behavioral patterns of the individuals would be identified and divided to different classifications. Such a trend would be known as human hacking in 2030, a time when the machine knows itself better than the human. Meanwhile, the topic of personal web will be raised.
The impact of the personal web in the marketing world creates the DNA marketing. In fact, in the future world, people who have similar patterns will also demonstrate similar behaviors. Based on personal behaviors, different marketing programs can be tailored and predicted. Such events are similar to an exercise. But it will soon be realized in the marketing industry. In such a world, advertising campaigns will become more personalized and will be tailored in accordance with each individual’s needs.
Trend of Changes and Transformations of Online Businesses
Pashapour added: “At present, there are seven thousand companies in the world operating in the same field we spoke about.” He added that the wave of such developments has reached Iran as well. “For example, there was no talk of the online businesses such as the Snapp, Divar, Digikala, and so on up to a few years ago. Soon other businesses will be affected by these developments. Businesses in general need innovation to survive, and to move along this path they need to use experts. Each business in every area of the market needs innovation.”
In this regard, Emrooz Market Research Company (EMRC) has conducted a research study on the trend of changes and transformations of the online businesses from 1394 to 1397 (2015/16 – 2018/19). This survey has been analyzed in terms of the status of the business in view of the audience.
The data of this research shows that the 92 percent Internet and 85 percent mobile phone penetration in 1397 (2018/19) had an increase of 49 percent and 70 percent, respectively, as compared to 1394. Dependence on the Internet in that period increased by 38 percent and the fact that without mobile Internet people could not live increased by 84 percent. People’s exposure to the cyberspace messages increased by 192 percent. Meanwhile, analyses in 1397 (2018/19) showed that 75 percent of the people in the society are influenced by the social networks. In addition, under the status quo, impact of the social networks is increasing and Instagram with 56 percent of the users of social networks has a higher penetration rate. The high penetration of this platform and its easy access to the target group has encouraged investment in advertising in this area.
According to the survey, 74 percent of the citizens have made online purchase at least once in the past 12 months. About 16 percent of the community has made at least one purchase (offline or online) under the influence of the advertising in the cyberspace.
Such an event has paved the way for penetration of apps into the people’s lives. Currently, 51 percent of the people use social networking apps. 51 percent use music apps and 49 percent use messengers.
In the trend of environmental changes towards the online space, online businesses have had a suitable opportunity to grow. The use of online shopping platforms with a growth of 2 percent as compared to the year 1394 (2015/16), followed by the online taxi service with an increase of 16 folds compared with 1395 (2016/17).
Also, the tendency to use online services is increasing day by day. For example, in 1397 (2018/19) research showed that 56 percent of the people staying at a hotel booked their accommodation online and of those who traveled by air, 41 percent bought their tickets online. In this regard, about 48 percent of the people have made online payments by using financial app services. About 40 percent of the society has made online shopping and purchase of cultural and artistic products (books, concert tickets, cinema, etc.) recorded the biggest number of online buyers with 39 percent during the past 12 months.
In addition, the data obtained from the survey shows that 74 percent of the population use one type of online service. In 1397 (2018/19), those who used payment application and the users of the Internet banks were about 21 percent. Overall, in the past year with regard to the economic recession people have shown more willingness towards the online businesses in order to manage costs.
Asked about the changes the banking system will make with regard to the current developments, Pashapour said: “The online services that are provided by the Iranian banks are beyond those offered by the banks in other countries. But in Iran there is no place for the hundred percent virtual banks. Banks need to move away from the cost of their branches and move towards hundred percent virtualization. Fintechs can provide this capability for the banks. Of course, banking goes beyond Fintech technology. At present the banks enjoy the required technology for converting into full (hundred percent) virtualization.”
Innovation Has Changed Business Models
Also speaking at the press conference, Gerhard Barcus said: “The fully online banks in Europe started their operation twenty years ago. The audiences in Europe completely trust the online banking system and have been using it for years.” As for the innovation in the field of marketing, Barcus said: “Innovation has redefined the business of business models. For example, brands like Snapp and Ober have been redefined in their business area. All the businesses in the world now consider online businesses as their competitors and are working with them. Banks are thinking of online system and trying to get closer to the European system. Currently, businesses active in the fast moving consumer goods (FMCG) in Britain have all activated their online segment. These businesses are trying to persuade the audiences to shop online. The dnaunion group, by launching the AVV Innovation Center, also helps the businesses to compete with other businesses in the digital world: Businesses that can deliver their features digitally to the market.
For example, every owner now wants to combine the behavior of their consumers with that of the online consumers and get accurate information. Therefore, every owner needs accurate information on the consumer behavior both offline and online. The AVV Innovation Center of the dnaunion group conducts three activities for its customers: 1. Helps businesses to present digital services to the market and receive better feedback. 2. Redefine characteristics of the businesses for being present in the digital world. 3. The center helps design business models in the digital space.”
Barcus added: “In the digital world, competition for pricing is right. Such an event made it easier for the audiences to easily choose the services after comparing prices. Therefore, people can make better use of the businesses, and business models will be more optimized. Of course, all the businesses have problems while getting started. But no business can stop this event which will take place willingly or unwillingly.
“The sanctions, of course, have restricted access of the Iranian businesses to many cyberspace capabilities. Now, businesses should also take advantage of the possible capabilities with regard to the circumstances.
“Overall, the market where shoppers have the final say will return. In this market, those who complete the supply chain are the winners. The most important point is that, the market size has decreased as people’s purchasing power declined. Businesses under such circumstances are thinking of gaining more shares and such businesses will grow even larger after sanctions.”
Significant Growth of Digital Advertising In Iran
At the meeting, Mohammad Mousavi talked about the impact of recent currency fluctuations on the decline of people’s purchasing power and said: “According to the EMRC research, some of the goods have been removed from the household baskets and others have been replaced. Meanwhile, people are trying to purchase form channels that provide cheaper services and goods for then. The online businesses play an important role and are growing day by day.”
As for the status of the digital advertising in Iran, Mousavi said: “If you look at all the media outlets, the amount of money spent on digital advertising is about 4 to 6 percent of the total advertising budget.”
Mousavi added: “Online advertising is popular and growing due to the multitude of channels among businesses. This growth is enjoying remarkable speed. Of course, because there are no precise instruments for measurement in this space, digital capabilities have not been widely used yet and the big businesses have not increased their online advertising budgets.”
Commenting on the growth of the Iranian brands at the time of the sanctions, Mousavi said: “Keep in mind that at the time of the sanctions some brands leave the market. In the meantime, some brands that are more productive are entering into the market for new products. This start-up covers both the brand vacant capacity and the market vacant capability. Such an atmosphere has opened the door to the Iranian brands. This has also happened during the sanctions in the past. Of course, the Iranian brands are keeping an eye on this situation. Such a look has made the Iranian brands which emerge in this era to be short lived. However, if they have a longer look, the Iranian brands will be able to appear in foreign markets in addition to the Iranian market.”
Multiple Regulatory Authorities Pose Problems for Online Businesses in Iran
About the barriers of online businesses in Iran, Pashapour said: “The multiplicity of legislative authorities is one of the problems of online businesses in Iran. The influence of online businesses on advertising is also increasing. For example, tariff value of total advertising has increased from 182 billion tomans in 1395 (2015/17) to 2,471 billion tomans in 1397 (2018/19). (Six nationwide networks, Nasim, Namayesh and Ifilm have been surveyed in the calculation of the rial value of tariff advertising and contractual discounts and overplaybacks have not been considered). In this regard, survey of the online businesses active in advertising in 1397 (2018/19) showed the volume of TV ads of these brands; Rubica application with 79 percent of the advertisement volume in 1397 (2018/19) was the record holder and Iran Seda application accounted for the most value of the tariff advertising. If we want to compare these percentages with 1395 (2016/17), we will reach the advertisement for the App application with 27 percent of the advertising volume and 31 percent of the value of tariff advertising (6 nationwide networks which have been surveyed since the beginning of 1395, and Nasim in the second half of that year, have been considered in the calculation of the rial value of tariff advertising while contractual discounts and overplaybacks have not). It is predicted that the online advertising will account for 30 percent of the total budget for the advertising of the businesses in the next few years.
“Of course, currently and with regard to the prevailing recession, many big businesses are after creating new products and securing their previous products. Older brands do not feel any need for advertising and are looking for supplying the raw materials and production. Powerful brands, meanwhile, present their products to the market. Therefore, the current situation has led to the emergence of new brands. Such a trend has created a new capacity in the advertising and marketing.
“When the market becomes competitive, the market will be in the hands of the buyers. In such a market, brands that have a strong marketing base will grow. Currently the market is not competitive and the market is only for sale and suppliers have the final say. The nature of the market has changed. In such a market, any brand that can supply the products will survive.”
Pashapour further elaborated on the recent actions of the AVV Innovation Center and said: “There are currently six ideas at the AVV Innovation Center. Of these ideas, two have entered the market. Hyperad and hypermail have entered the market. These two ideas are automating the giving and receiving ads in the online space. These ads include any type of the online advertising. Four other ideas are on the way and will hit the market by the end of this year. These ideas are in the area of influencer marketing and organizing influencer advertising and celebrities. Another idea in the field of monitoring offline advertising is in the online style. All of these ideas are in Adtech, Martech, and Market Research. In the field of fashion, automotive equipment and household hygiene, we have helped some businesses for entering into the digital arena, news about which will come out soon.
“The AVV Innovation Center will introduce ideas that have been designed by university talents to the businesses. Therefore, one of the tasks of the AVV Innovation Center is to discover the ideas of talents in the field of innovation. One of these ideas is called Smart Lightning that has been processed by three young people. The idea has been suggested to investment companies in the area of lightning and is one of the successful projects of the AVV Innovation Center and has reached the production line. Overall, despite the fact that we have left behind a difficult year, still there is room for growth and businesses have grown in this field. This growth is due to the decrease in the competitive space. The competitive space that will come back and businesses should use that space to build their infrastructure to return back to the competitive space.”
At the end of the press conference, the dnaunion group thanked media reporters on the occasion of the Reporter Day.