One97 Communications, which owns leading payments and financial services company Paytm, has launched a new ad campaign to enhance existing user engagement by showcasing the company’s payment products and experience. “Our ad campaign reflects our commitment: every time India plans its future, we’ll be at the centre of it, and as you move forward in life, Paytm will always be by your side,” emphasised the company. The ad films are set to go live across various media channels including television, digital platforms, and social media.
Fresh from the oven, the campaign promotes Paytm’s payment instruments including UPI money transfers, Scan and Pay, Soundbox, Paytm UPI Lite wallet, Credit Card on UPI, recharges and bill payments — reflecting key focus areas in Paytm’s path to recovery, as highlighted by its top management during the earnings call. For instance, UPI which earlier contributed to 70 percent of Paytm’s payment GMV, is now fuelling 80 to 85 percent of the GMV.
This is the first time the company has launched a campaign of this scale after the Reserve Bank of India (RBI) cracked down on Paytm Payments Bank, in January. Although the fintech company in the month of February launched a print advertising campaign to reassure users and merchants that its QR, Soundbox and card machine will continue to work ‘today, tomorrow, and always’ — but that’s about it.
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Paytm’s marketing and promotional expenses in the March quarter came in at just Rs 128.7 crore — as compared with Rs 275.2 crore in the preceding quarter and Rs 204.5 crore a year ago. The company paused most of the user growth spends in the months of February and March. However, this fiscal year, starting with Q1 FY25, the company plans to reinvest and has shared that the ad spends are higher than what they were in Q4 FY24, without revealing the percentage increase.
During the earnings call, Madhur Deora, CFO, One97 Communications, said, “In Q1, we expect our marketing cost to be higher than in Q4; we just launched a campaign. Q4 was abnormally low; the focus was on ensuring that the transactions were completed as opposed to our specific user campaigns’ stride.”
While the latest campaign of Paytm underscores its promise to be a trusted partner for all Indians — would these five films be enough for the company to reclaim the brand to be the safest or most trustworthy digital payment, as it tides past its rough times after RBI’s action against Paytm Payments Bank.
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Mohit Hira, Co-founder, Myriad Communications, thinks Paytm is at an existential crossroad in its journey. It started out with a clear USP but wasn’t taking off until demonetisation gave it a fillip. And then it becomes almost generic for mobile payments overnight. But an external intervention again impacted it – adversely this time.
The Reserve Bank of India (RBI) imposed strict restrictions on Paytm Payments Bank Limited (PPBL), an associate entity of Paytm, after an audit report highlighted persistent non-compliance and supervisory concerns within the bank. Paytm stock prices fell 39 percent within one week after the RBI crackdown and had a considerable impact on eroding the brand value of the organisation.
“I believe the brand needs to fix several things before it launches a campaign. Trust is the most critical KPI for a financial brand and, hopefully, Paytm will focus on winning it back before it splurges on advertising. It has no problem when it comes to recall or even distribution: it’s just the usage that needs to be fixed. Consumers may have short memories but a brand like Paytm needs to cement credibility permanently,” he said.
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After such an impact, to regain customer trust, Paytm can look at creating transparent communication and should issue clear, honest statements about the issues and steps being taken to resolve them by the stakeholders, said Smita Khanna, COO, Newton Consulting India.
Further, highlighting improvements and publicising enhancements in security and compliance measures is something that all investors would want to know and different media platforms can be used to communicate the same.
Since there will be a lot of doubts generated by the customers, enhancing customer support services to address concerns promptly and effectively can go a long way, she suggested.
“Keep customers informed with regular updates on the resolution progress and new measures implemented. The company can also offer incentives like discounts or cashback to retain and attract customers. And the company can utilise its social media pages and forums effectively to create a robust community engagement campaign to rebuild trust,” she shared.
While RBI-imposed restrictions, to a certain extent, did impact its reputation and erode brand recall, Paytm had been getting tough competition from Google Pay and PhonePe over the years. Data released by the National Payments Corporation of India, in April, showed Paytm witnessing a slight drop in Unified Payments Interface (UPI) transactions — it processed around 1.2 billion UPI transactions in March, down from 1.3 billion transactions in February and 1.4 billion in January; whereas PhonePe and Google Pay saw the volume count going up. In terms of the market share, (as of March) PhonePe has around 48 percent market share on UPI, followed by Google Pay with a 37 percent share and Paytm with a 9 percent market share.
So, Paytm will have to undertake major marketing strategies to keep the brand visible, instead of just showcasing ‘how it is a trusted partner’, noted experts.
Besides the brand’s visual and verbal identity consistency, Khanna urged the brand to regularly update customers about the resolution process and progress to keep the brand top-of-mind. Further, apart from the latest marketing campaign running across traditional and digital mediums, email marketing, content marketing, influencer partnerships, and SEO/SEM can help engage customers and provide updates. Integrated Marketing Communications (IMC) strategies, including public relations, events, sponsorships, and webinars, can enable direct customer engagement and transparency, the experts said.
Hira shared that perhaps Paytm should resist the temptation of clever, quick commercials and videos, and re-establish the brand via newspapers. But, only after everything else is fixed, he emphasised.