The share of digital advertising in India has been steadily growing. According to the Indian Digital Advertising report, prepared by the Indian Market Research Bureau and the Internet and Mobile Association of India, the Indian digital advertising market this year is estimated at Rs 2,851 crore, compared with Rs 2,277 crore last year. The market is expected to double to about Rs 4,391 crore next year.
Thanks to the growing demand for domestic ad networks such as Komli, Tyroo and Tribal Fusion (which buy and sell online space for a host of websites) is growing, despite the presence of Google and Facebook, considered key digital advertising vehicles.
Media buyers representing advertisers are increasingly approaching these ad networks in search of the best deals for their clients, and most are not disappointed. These networks have been growing steadily, and are now beginning to attract venture capital (VC) funding.
Earlier this year, Komli raised $36 million, led by partners, including Norwest Venture Partners, Nexus Venture Partners, Helion Venture Partners, Draper Fisher Jurvetson and Western Technology Investment. Another ad network, Pubmatic, also raised $45 million earlier this year. And, the buzz is Tyroo is also in talks to raise $10 million from VC funds.
Typically, media buyers looking for online space use ad networks as a route to mark the presence of the brands they represent. There are about 10-12 ad networks in India, the popular ones being Komli, Tyroo, Tribal Fusion and Ozone Media. Google’s Adwords, an automated tool that allows a media buyer to directly book space online, based on his/her requirements, is another prominent ad network.
Komli chief executive Prashant Mehta said in the last year, the company’s business grew about 100 per cent in India, though experts say this was also aided by a small base. Mehta declined to specify the company’s revenue. “Over the past two to three years, we have been growing three to five times. We work with 75 of the top 100 traditional advertisers in India. This shows our penetration in the domestic market,” he said.
In the last 12-18 months, Komli has focused on a technology platform. Mehta says the firm’s focus on the graphical (display, mobile, video, and social) digital market continues to see quick growth. “The investment we are carrying out in technology is not only for us. We want our clients to use it, too. We have started real-time bidding. This could be bidding on impression or bidding on multiple pools of inventory across the world,” he said.
For Tyroo, growth is being driven by the recent boom in the e-commerce segment. “Today, we have a total of 250 unique advertisers. One of the biggest growth areas for us has been the e-commerce segment. We partner almost all the major e-commerce players in the country and represent almost 10-15 per cent of our client ad spends,” said Siddharth Puri, business head, Tyroo Direct. Revenue from the e-commerce segment accounts for 10-15 per cent of the transactions. The total active client base of Tyroo Direct is 122. “What we bring to the table is end-to-end performance channel management. We drive approximately 4,000 transactions daily to our e-commerce clients,” Puri said.
Industry experts say while Google has huge presence in search-based ads, other players are attractive when it comes to costs. “The price difference between Google and some domestic players, in terms of the cost per click, is as much as 30-40 per cent,” said a senior industry executive.
However, Tanushree Radhakrishnan, media director, Zed Digital, the digital arm of ZenithOptimedia, said, “You need time at hand when you are using Google’s Adwords, since you have to operate it on your own. But it is effective, since you are in control of the situation. With the other guys, you are dealing with representatives who would ensure you get what you want.”
Typically, the issue is the more cost-effective an ad network is, the lower the cost and the better the deal But Arnab Mitra, national director (digital), Starcom Mediavest Group, says in the last few years, there has been a shift from cost to the online presence ad networks can provide. “Ad units such as banner ads, scrolls, etc, have long been commoditised. Increasingly, advertisers are demanding to know what technological innovation the ad network can bring to the table. That is the key,” Mitra said.