Can a software driven trading platform for mobile devices change the way advertisers and media buyers and media owners do business? Vdopia, a Silicon Valley based (privately held) company that operating out of five countries is hoping for just that with the Asia Pacific launch of Chocolate earlier this month. Vanita Kohli-Khandekar spoke to Saurabh Bhatia, CEO, Vdopia. Edited excerpts:
What is Chocolate?
Till computers came almost all trading on the stock markets was done manually. Similarly in media there is a lot of manual work that happens. Someone will go through excel sheets of options, then the decision is taken and then the campaign executed. Chocolate is a programmatic marketplace for mobile video where buyers and sellers come together to do business and we get a percentage of the spends.
A lot of software is used in media buying, how is this different. And what about human discretion…
If all three parties - the client, the agency and the ad network - are plugged into us, then the whole process of selling, releasing, publishing and serving an ad can be automated. The human discretion comes in setting the variables on the basis of which this marketplace will operate. For example if the publisher of a website or newspaper or app on Chocolate could decide that the software should not accept any ads of less than say Rs 100 cpm (cost per mille or cost per thousand). Or if an advertiser does not want the ad on certain websites or apps (porn or something that doesn't fit with the brand). Chocolate offers scale, automation and also brand safety, which is becoming a huge concern with online advertising now.
The issue with online advertising is excess inventory, so won't this become a demand driven?
Before any auction the publisher can decide what price he wants. The advertiser has the opportunity to set the floor price. The market (publishers/ websites/apps) decide whether that is a fair price. Four weeks ago Chocolate has got 10,000 publishers and apps on board.
They had 200 million unique users. They are selling inventory to over 555 advertisers globally. More than a billion auctions are happening every month on Chocolate. The result has been higher CPMs. The average CPM is $5.44, the highest has been $7. The range for online advertising is $3-7, so we are certainly doing better. Over the next 3-5 years our estimate is that 80-90 per cent of the digital advertising will go programmatic. That means the decision making will get automated.
The digital ad market in India is small, mobile advertising is even smaller at Rs 400-500 crore…
The media buying and selling market in India has been opaque for too long. Now all transactions are moving to e-auctions and becoming transparent. That is what we are doing for media - making it a free, transparent process. When there is a lot of trust that builds scale. It is a big market and it is time for change.
Could it help shift power back to the publishers?
I can't say that power will shift back to the publisher. If you (the publisher) thinks that your content is more valuable than some blog and your audience has a higher purchasing power, then even if five aggregators control everything, they will bid for that inventory in real time. It tries to bring more fairness in the system.