1. Know your audience: This goes almost without saying. I do mention it because some advertisements I’ve heard seem to miss this basic point. If your podcast has a largely international appeal, for example, an advertising pitch that highlights “all American” as the potential benefit of consuming the product is missing the point.
2. Know how your audience listens to your podcast: While the podcast format derives a large part of its popularity due to the freedom it affords users in terms of how and when they listen to your podcast, a quick survey might give you an overall picture of consumption milieu. This could give you crucial insights into what kind of products that you can effectively advertise. One fiction podcast, for example, realized that a large portion of its audience listens to its podcast at bedtime and made a concerted pitch to sell fuzzy headphones that you can wear when you sleep.
3. Keep the advertisement relevant to your podcast and, if possible, to the particular episode: While this seems very basic too, I’ve seen many business podcasts miss this! An automobile advertisement that talks about style and comfort is not exactly the thing you would like to sell in a podcast that is talking about green-tech or clean-tech.
4. Know just-tolerable-length: Remember, most of your audience is listening to your podcast on an audio player that can easily skip ahead. If you make a advertisement small, then there is a good chance that the annoyance of skipping ahead is greater than having to listen to the ad itself. If you make it too small, your advertisement may not be effective. The key is to realize how small, exactly your pitch must be. The exact length that an ad should be is what I call just tolerable length.¹ This is going to depend a lot on the factors I’ve listed above. If your advertisement is relevant, humorous or informative, people may be willing to spend more time listening to it than otherwise.

In conclusion, remember that in this medium, the listener has a lot of freedom. Hence, all the principles that apply in traditional advertising may not apply and you need to be creative to get your message across.

To further complicate matters in podcast advertising, the metrics that are applicable to mainstream media such as TV and radio may not be very useful here, both because it is very hard to measure them and because may not be amenable to meaningful interpretation. On the other hand, advertising metrics of the web also are not relevant to this media. It appears to me as thought this medium is amenable more to niche marketing with direct measurements of results rather than to build awareness or top of the mind recall.

1. This is inspired by a consumer behaviour concept called just noticeable difference or JND. Just Noticeable Difference is the minimal apparent difference between two products as observed by the consumer. Otherwise we can say -”The just noticeable difference (JND) is the smallest difference in intensity between two stimuli that a person can detect.”

Here a SimpleViewer Flash gallery should be displayed. Click here to open the post in your browser to see the gallery.

You can download the presentation by clicking the following link. Research presentation on Sunil Bharti Mittal.

In most companies, the IT department also handles telcom assets.  I also see that most big companies tend to outsource their IT needs. These companies also usually have water-tight SLAs¹ with their service providers. Hence outsourcing merely their telecommunications requirements may not make sense for such companies.

For smaller and medium sized companies, however, outsourcing IT may not be feasible or even necessary. In such situations, does it make sense to outsource the telecom management? Telecom asset management can be a chore for most companies (unless they are service providers). This is not just due to plethora of devices a mid size company would need to service their telecom needs, but also due to the pain of having to keep the devices updated (having to deal software versions of various devices etc.). Given these factors an intermediary like an outsourced telecom management firm akin to outsourced IT firm may be of some value.

1. Service level agreements

Correlation & causation

The incident is funny to us because we realize that the correlation between the elderly gentleman’s mouse gestures and the video buffering is spurious. We also realize that one does not cause another. In other words, we clearly understand that, in this case, correlation does not imply any causation.¹ Any confusion between the two can be a genesis of a new superstition.

We are exceedingly good pattern recognizers! We see them everywhere. We see faces in clouds, letters in tree barks and whatnot. Not to say that this is bad, though: all our accumulated knowledge is mostly about patterns, how things & people behave.

So why is it we tend to overgeneralize and find more patterns than there seem to be? Why do we develop superstitions? Why do we mistake correlation for causation? After all, it is not very rational, for it is true that small correlation exists between almost any two sets of data.

One poignant example of this is in the stock market where we rely so much on patterns to help us make money. The commentary for Ben Graham’s “The intelligent investor” succinctly warned us of perils of doing so :

If you look at a large quantity of data long enough, a huge number of patterns will emerge—if only by chance. By random luck alone, the companies that produce above-average stock returns will have plenty of things in common. But unless those factors cause the stocks to outperform, they can’t be used to predict future returns.²

Wired to be superstitious

Research seems to suggest that we are wired to be an overgeneralizing, superstitious species. ³ The idea is surprisingly simple. Pardon my use of a simplistic analogy to demonstrate the logic. Imagine there are two people, one who overgeneralizes and sees a lion in the grass when there is none and another who doesn’t overgeneralize and sees a lion only when it is truly staring down at him. It is more likely that the former will survive to reproduce than the latter. Hence, over the eons, we have evolved to overgeneralize.

Science to rescue

While it may be true that being superstitious is better when the there is a large cost for missing something with a relatively small cost of getting it wrong⁴, in our current lifestyles as comfortable denizens of concrete jungles trying to live off the gullibility of others, superstition is more of a hindrance. How do we go about reducing its effect?

I think we can do so by using scientific method, in general. The beliefs we want to adopt should be falsifiable.⁵ We need to test those beliefs in a strictly empirical (observation and experiments) and skeptical (with proper controls⁶ ) fashion to ascertain their validity.

Philosophical underpinnings

The philosophical underpinning of the whole argument, however, rests on a principle called Occam’s razor. It is a principle of parsimony which can be simply stated as “when you have two competing theories that make exactly the same predictions, the simpler one is the better” or as Einstein is often quoted “Everything should be made as simple as possible, but not simpler”.⁷ I’d like to conclude with a question to my readers. What makes Occam’s razor tenable?

1. The confusion between the two, however, is very common. Check out the Cambridge 2000 memos page on Correlation and Causation to see how much the issue confounds you.
2. Commentary on chapter 1, pp45, The intelligent investor, Ben Graham, Commentary by Jason Zweig.
3. Foster, Kevin R., and Hannah Kokko. 2008. “The Evolution of Superstitious and Superstition-like Behaviour.” Proceedings of the Royal Society of London, Series B.
4. This argument is the same as Pascal’s wager, by the way. Pascal’s wager states that since the cost of not believing in God is infinitely higher (an eternity in hell) than the cost of falsely believing (some wasted rituals, perhaps) one should always try to believe in God. An exhaustive treatment of the idea can be found here:  Pascal’s Wager, First published Sat May 2, 1998; substantive revision Wed Jun 4, 2008, Stanford Encyclopedia of Philosophy
5. Karl Popper, regarded as one of the greatest philosophers of science, held that falsifiability, i.e., whether a theory can be shown wrong with evidence and observations, as the criterion for demarcating science from non-science. A theory which is compatible with all possible observations is, by definition, unscientific. You can read more about Sir Karl Popper at the following page:  Karl Popper, First published Thu Nov 13, 1997; substantive revision Mon Feb 9, 2009, Stanford Encyclopedia of Philosophy.
6. A control in a scientific experiment is something that is held constant to provide base values to compare observed experimental data against. Here is the dreaded Wikipedia link where you can read more about this: http://en.wikipedia.org/wiki/Scientific_control.
7. Much better treatment of the idea than mine can be found here: What is Occam’s Razor? Updated 1997 by Sugihara Hiroshi, original by Phil Gibbs 1996, physics FAQ.

I chose to study the small passenger cars segment and apply the concept of reference price on it. This seemed interesting at the time since Tata Nano had just been launched and its effect on existing cars especially with respect to their price perception and reference price seemed novel and relatively unexplored.

Hence, I started out with the following objective.

Main point of interest in this study is Nano’s category membership. Will it be perceived to be a member of the A1-A2 category? While the question is very interesting, the study assumes that without strong efforts from the other brands in the segment, it could be perceived as a member of the category. There is also some categorization research which suggests the same.² If so, it throws up interesting questions on the price perception in the category. How will the reference prices be impacted? What would brands in the category have to do to ensure price acceptability? These are the main considerations of the study.

I did manage to find some interesting literature on reference price and apply it to the category. Although, the report is a bit pedantic, if you like the subject, you may find the report interesting. You can download the report by clicking the following link. BDMS – Study on Reference Prices in Passenger Cars.

1. Sequel courses, like sequel movies, are often inspired by the success of the first one and are burdened with expectations
2. Moreau, C.P., Markman, A.B. and Lehmann, D.R. (2001b), “What is it? Categorization flexibility and consumers’ responses to really new products”, Journal of Consumer Research, Vol. 27 No. 4, pp. 489-98.

Credit default swaps is a contract in which the buyer makes a series of payments to the seller in exchange for the right to payoff if there is a default in respect of the reference party. The market for credit derivatives became larger than the underlying assets themselves¹, and it is often alleged that these instruments catalyzed the meltdown². The term paper aims at exploring the instrumentality of these instruments in precipitating the current financial crisis.

After an interesting analysis of what these financial instruments actually are and how they were used, we concluded:

Although the jury is still out on whether credit derivatives catalyzed the financial meltdown, evidence so far seems to suggest that they could indeed have played a crucial role. However, they may not deserve all the vilification that was heaped on them – from “financial WMDs” as Mr. Warren Buffet called them, to disowning of them by their former cheerleader Mr. Alan Greenspan. The genuine benefits of derivatives such as ability to hedge and price discovery of credit risk may in fact be fine-tuned in the future. However, it looks imperative that derivates be brought under the ambit of a regulator and probably a standardized and exchange traded form introduced to eliminate counterparty risk.

If you are interested in this topic, you can read our report by clicking the following link - role of Credit Default Swaps in precipitating the the current financial crisis.

1. Demystifying the Credit Crunch: A Primer and Glossary, July 2008, Arthur D Little, Private equity council, by Jonathan Cheng, Matthew Walsh and Simon Flax of Arthur D. Little’s New York office. Pp 5.
2. The Monster That Ate Wall Street, How ‘credit default swaps’—an insurance against bad loans—turned from a smart bet into a killer, by Matthew Philips, newsweek, published Sep 27, 2008, from the magazine issue dated Oct 6, 2008.

The election commission of India collects various data on candidates of Lok Sabha elections. This data includes such variables as age, assets, liabilities, number and nature of criminal cases registered against the candidate, educational status etc.

The authors were interested in studying the effects (or the absence thereof) of these variables on the outcome of the election.²

There were two parts to the analysis. One part was analysis of data collected for 2004 elections, which was the actual data. The second part was analysis of data collected through a sample survey of IIMB students³. Although not very surprising, the preferences of the two were markedly different. Here are some examples from the report.

It is interesting to note that the IT sector people prefer candidate with medium wealth. Candidates with low wealth and candidates with high wealth are not preferred by the IT sector employees.

Preference of test constituency people is exactly opposite; they prefer candidates with either very low or very high wealth. Candidates with medium wealth are not preferred.⁴

The following observations were along similar lines.

It is interesting to note that the IT sector people prefer candidate with no cases while the people of test constituency prefer candidate with cases.⁵

IT sector people prefer national party candidate while the people of test constituency prefer candidate regional party candidate.⁶

It is interesting to note that education is the most important attribute for the IT sector people while wealth is the most important attribute for the test constituency people.⁷

After a lot of data collection and analysis. We ended up with this conclusion:

The study found that data collected by election commission does not have statistically robust power for predicting or discriminating between winners and losers in an election. Discounting this, however, we find that urban elite as well as general voting public in some constituencies prefer national parties rather than regional parties or independents. Independents, in general have least preference. This observation is vindicated in the 2009 results as well. The study also finds, again not very robustly, that preference structures for various attributes such as number of cases, assets and education are markedly different between the urban elite and the general population – perhaps not surprising.

The main learning w.r.t., multivariate data analysis techniques is that the quality of data and the selection of variables determine the utility of the techniques to a very large extent. In this case, the objective of the study determined the choice of variables. This, in turn, lead to unfruitful results from various techniques.⁸

If you are interested in statistical techniques and Indian elections, you may find the report interesting.

AMDA Project Lok Sabha Election Analysis Report.

1. In IIMB, grade points are awarded for each course out of a max of 4.0. These classmates of mine, Gaurav Pathak and Amit Purohit, could find it with ease!
2. Page 4 of the report
3. Who were mostly PGSEM students. Hence the report refers to them as “IT sector people”
4. Page 28 of the report
5. Page 29 of the report
6. Page 29 of the report
7. Page 30 of the report
8. Page 35 of the report

Are you coming to the class?
Yeah! I am going there only!

Where do you get this biscuit?
In the same shop only!

Is there any other way to express the same emphasis in English? Or is it like this only?

Gandhi was sworn to punctuality, and his life was governed by the watch to an unusual degree; though it should at once be added that despite keeping to a meticulous schedule for much of his life, Gandhi’s conception of time was never such that it did not allow him to make time for anyone, howsoever high or lowly, who should choose to enter into his life or make demands upon him. That pernicious word ‘busy’,¹ with which we all excuse ourselves from the common obligations of humanity, and the onerous company of unwanted relatives, acquaintances, and others who seek to intrude uponour time, was surely no part of Gandhi’s lexicon.²³

I guess there is a logical reason for this, notwithstanding the humanitarian one. It is that if you live by your plan, you close your mind to new experiences and in a way to life.

1. Emphasis mine
2. Emphasis mine
3. From ‘Hey Ram’: The Politics of Gandhi’s Last Words, Vinay Lal, Published in Humanscape 8, no. 1 (January 2001):34-38.

Global telecom giant Alcatel-Lucent is likely to sell its research and development (R&D) centers in India. CNBC-TV18 learns that it has approached three IT firms for a possible buy. These include Wipro, Infosys and Cognizant. The combined value of arm is expected at Rs 250 crore, informed a source.¹

Of course, the news was immediately denied by official sources, which claim that R&D is “strategic asset” to drive “innovation”.

Core competence?

What is strategic? There is one notion, that of core competence, which says that something is strategic if you can do it better than anyone else and is hard for your competition to copy.² For most parts of R&D, which could be routine maintenence, routine development of software etc., service companies are better suited. They can use their scale to drive efficiency in these parts. Billing rates of IT services companies, which could be seen as one measure of efficiency, have shown flat to downward trend.³ This demonstrates their ability, in general, to drive efficiency.

Business critical?

Could it be that R&D is critical to the business of Alcatel-Lucent? Criticality of component does not, by itself, drive a make decision. Forged components that go into making engine parts, for example, are critical to the performance of automobiles, but they are outsourced anyway. The decision here would be driven by the knowledge that this critical component is not a differentiator in the marketplace (i.e., all auto manufacturers need it) and that there is an external party that can aggregate all this demand and operate more efficiently.

Driver of innovation?

Could it be that R&D is strategic because it is the only way to drive innovation, without which there would be a disadvantage to Alcatel-Lucent at the marketplace? On the face of it, this argument holds water. But, we need to ask ourselves: what amount of R&D that takes place in-house actually drives innovation? A lot of maintenance activities and routine development of product software is also grouped under R&D, there is a case to be made that this would be done much more efficiently by services companies. A case could be made to separate out only innovation driving R&D (mostly, bell-labs) from other parts.

New paradigms

Of course, the notion of what is “core” and what can be outsourced is continuously being changed. For example, Bharti has now outsourced most of its network. This would have been sacrilegious some time ago.

There could be a notion of semi-core developing here. Something that is critical to the business, yet not a differentiator. If any such sale does materialize, it would be interesting to see how IT services companies could aggregate work from various such semi-core activities that keeps their clients satisfied that they are not being put to a disadvantage while also driving efficiency.

1. Alcatel-Lucent may sell India R&D centers: Sources,Published on Tue, Oct 06, 2009 at 14:00 , Updated at Wed, Oct 07, 2009 at 11:14 Source : CNBC-TV18
2. Prahalad, C.K. and Hamel, G. (1990) The core competence of the corporation, Harvard Business Review. pp. 79–91.
3. IT Services Business Trends Report, October 2008, Specifics Incorporated, Fairmount Partners, Investment banking, Billing rates pressured, pp 6.