On 21 August 2013, a press statement issued by Viacom18 and Amagi Media Labs announced that using the latter’s DART technology platform, Hindustan Unilever will simultaneously run different television commercials in different regions on Viacom18 channel Nickelodeon. The micro-targeting by region, or ‘creative versioning’, has been one of the drivers of the three year-old Amagi’s growth.
The platform has evolved from one driven by regional brands, to one helping national brands better target regional markets on television, explained KA Srinivas, co-founder, in conversation with Campaign India. Edited excerpts:
How has the platform grown, since its inception?
We currently buys 10,00,000 seconds of advertising a month across 15 channels, and catering to over 2,000 clients. Apart from focus on regional brands, what we have seen in the last two and a half years is increased interest from national advertisers with regional requirements. And with the TRAI announcement of the ad cap of 12 minutes (per clock hour), targeting is going to become an absolute necessity.
For regional brands in many regions, TV was never an option. They had to stay content with other mediums as spillage would have been enormous on national TV. Targeting gives them the option of advertising on the national channel in just their region.
For national brands, targeting allows them to focus on their priority markets. It could be to counter local competition, it could be because they want to increase their share of voice in a particular market, it could be because of a sales or promotion-led messaging in a particular market. Or, even when they are selling different SKUs in different markets, or different variants or brands.
In the case of national advertisers, it could be for customising content for different markets, be it on language or offer or something else.
The biggest evolution that we are seeing is more national advertisers with regional requirements coming on board.
Which are the categories that are driving this consumption?
Apart from the large number of retail brands, we see FMCG companies, consumer durables and auto companies coming on board. A lot of large advertisers are realising that with national properties like cricket, for example, where you have the entire country from Kashmir Kanyakumari watching, targeted ads are necessary and deliver far greater RoI.
We’re starting to see telcos coming in. We should start working with one next week – they have some circle-specific requirements. And then there are seasonal things like elections which spike up demand.
You buy inventory from channels, like agencies. You also work with agencies to offer inventory to their clients through them. How does your buying efficiency work, when competing with agencies?
We don’t compete with agencies, we work with them, as you mentioned. When someone wants to go national on TV, they will go to agencies. When they want to target regional markets, they can come to us. Agencies also come to us for their clients today.
On some of the channels we work with, we are among the top two to three buyers of their inventory. But it’s not using that scale in itself, because we may not want to ask for the lowest rate. We buy at a premium and don’t ask for discounts. It’s a reverse process to the traditional way of buying. Our pricing is also a little more nuanced. From a buying perspective, we are an aggregator – the media we buy will reflect what the buyer expects from us.
Earlier, advertisers were okay to have some spillage. Now that is increasingly not the case. They are in agreement that the returns on a higher spend to target better delivers greater value than buying cheapest with spillage and in effect not reaching some markets optimally.
The model we have is designed to serve as an additive to broadcasters and advertisers.
When you buy inventory, especially at a premium, and some advertiser picks it up for some markets of relevance to them, the onus is on you to sell the remaining inventory (for other markets)… What is the conversion rate?
Yes. Our buying model reflects the demand that we see. There are regions where there is huge demand. It can go up from 85 to 100 per cent. There could be some smaller cities where it is as low as 25 per cent at times.
What is the trend that you see with targeting becoming available to TV planning?
There has been a migration of spends to markets where there was no regional option. If you look at Punjab, there was no channel to deliver enough reach for Punjab. When we have an option to reach Punjab through Amagi, we see that the budgets are getting allocated not just to Amagi but also to Punjabi regional channels. There is a reconfiguration of planning when the regional option becomes available.
Brands are also choosing to target different regions differently. For example, Bombay and rest of Maharashtra are completely different. Brands are wanting to target them differently too.
Have you seen first-time advertisers on TV come on board, thanks to targeting?
In the last three years, there have been significantly large number of first-time TV advertisers who have come on board. Now, we have a significant portion of our revenue from the larger advertisers who were already on TV, but the regional advertisers continue to be there in large numbers.
Regional brands have the money to spend on TV targeting their specific markets. But in many markets, there are not enough TV channel options for them to get the reach they need.
In a market like Tamil Nadu, with the reach of a Sun TV, regional brands have grown because they could compete on par with the national brands spending on TV. Such strong regional media platforms enable regional brands to be built - take the example of retailers like Pothy’s. But can you name one large jewellery brand from Gujarat? No.
How big is the team? And would it predominantly be comprised of sales professionals?
We have about 126 people now. This includes those on the planning and analytics side, those in engineering and technology and the large sales team.
You use proprietary technology. Have you forayed into international markets?
We’re launching an office in Singapore on 1 September. We’re already live in that market with two channels, MAA TV and Eenadu. We’re also seeing interest from some local channels there.
We’re already present in Japan. We’ve deployed it in six countries in Africa. Through partnerships, we’re also present in Europe (UK, US), besides Brazil and Netherlands.
The international side of the business has found traction in the last one year.
How has the channel bouquet expanded?
We’ve added a channel on average every quarter. We’re seeing the dam burst open now. Channels are asking us if we can partner them. The intent is to present a bouquet. Value comes in a network offering.
Going forward, the dimension of our growth may not be secondage. As we go into higher reach channels, the value will multiply many times over. We’re now present in every genre except in Hindi GECs. We should announce a partnership with a Hindi GEC soon.
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