The aphorism, ‘a rising tide lifts all boats’ suggests that an improved ecosystem benefits all those who take part in it. Probably, this is how an advertising technology (ad tech) ecosystem works. In that context, advertisers seek to reach consumers, and it is here that publishers offer advertising real estate, and consumers navigate a world saturated with marketing messages. When advertisers, publishers, and consumers all benefit from the system, everyone seems to win. Affle, a global ad tech company, works in this ecosystem. The company posted a 29.04% increase in revenue from operations from Rs 1153.331 crore in FY22 to Rs 1488.28 crore in FY23. Its net profit increased by 14.33% to Rs 245.466 crore in FY23 from Rs 214.692 in FY22.
In a conversation with BrandWagon Online, Vipul Kedia, chief data and platforms officer, Affle, talks about how the company is catering to multiple stakeholders, its patented AI capabilities, and transforming ads into recommendations technology, among others. (Edited Excerpts)
What are the key market strategies deployed by the company to maintain profitability?
I believe profitability is an outcome of our efforts, with our strategies primarily focused on catering to our stakeholders. In our business, we have three main stakeholders, namely advertisers, publishers, and consumers. Affle platforms sit in the middle, connecting these stakeholders.
Our business operates in two layers, which are the demand side and the supply cloud. On the supply side, we aggregate various partners such as Original Equipment Manufacturers (OEMs), operators, direct apps, and programmatic exchanges into our supply cloud. This supply is then channelled into multiple demand-side platforms (DSPs) that we operate.
For instance, in India, we have six demand-side platforms (DSP), which include ConvergeAI, Appnext, RevX, mediasmart, mDSP, among others. These DSPs utilise the common supply cloud, which optimises the supply for quality and ensures compliance with data privacy guidelines before delivering it to advertisers.
We aim to deliver meaningful outcomes for advertisers, focusing on metrics including user conversions. Different DSPs address various advertiser needs, such as user acquisition, maximising lifetime value, and targeting specific supply channels.
By integrating technology and optimising the supply and demand sides effectively, we aim to provide value to advertisers, publishers, and consumers alike. This holistic approach aims to ensure relevant advertising, leading to a sustainable ecosystem where all stakeholders benefit.
Affle emphasises transforming ads into recommendations using consumer insights-led solutions. How does this work, how does the company leverage AI and deep learning algorithms to achieve this, and what benefits does it bring to marketers?
Our platform, Appnext, is designed to track and understand user journeys throughout the day. By analysing user habits and behaviours, we can tailor ad placements to maximise engagement and conversions. For instance, showing a Zomato ad in the morning might not be effective, but during lunchtime, when people are more likely to order food, it becomes relevant.
We turn ads into recommendations by leveraging our understanding of consumer behaviour. This involves identifying when users are likely to engage with certain types of content or ads, based on their daily routines. For example, we determine when users are most active on news apps, social media apps, or utility apps, and target our ads accordingly.
Our approach relies heavily on data science algorithms and AI technologies to process vast amounts of data from billions of devices and users. This allows us to make informed decisions about ad placements and optimise for maximum effectiveness. With such a complex optimisation problem, machine learning and AI are held as indispensable tools in our technology stack.
How is your company complying with users’ personal data security with recent developments concerning the DPDP Act and Google’s decision to phase out third-party cookies? How is it affecting the advertising ecosystem?
Regarding data privacy guidelines, it’s essential to understand the roles of the three stakeholders in our ecosystem, which are advertisers, publishers, and consumers. When running advertising campaigns, we intend to ensure that the data used is consented to by the users, either directly through the advertiser or implicitly through the publisher. Our role is to use this data solely for its intended purpose, such as running campaigns for specific advertisers without misusing it for competitors.
As a company, we prioritise compliance with data privacy regulations such as GDPR (General Data Protection Regulation), CCPA (California Consumer Privacy Act), PDPA (Personal Data Protection Act. We have entities in Europe, the US, and Singapore ensuring adherence to these regulations. Additionally, we’ve received recognition from the Singapore government for our data processing practices, further validating our commitment to data privacy.
The second aspect is attribution, especially with recent changes such as the deprecation of cookies and Apple’s IDFA (Identifier for Advertisers). As the industry shifts, we seek to adapt our platforms to accommodate new attribution mechanisms, evolving from deterministic to probabilistic attribution. Affle has even developed its own attribution solutions to navigate these changes . With our extensive experience and team of engineers, we continuously upgrade our systems to be able to remain at the forefront of industry standards.
We believe in our ability to not only keep pace with industry changes but also lead within the new paradigm. While others may struggle to adapt, our expertise and resources help us ensure that we emerge as winners, delivering value to our stakeholders while adhering to evolving guidelines and regulations.
How do you navigate the dominance of walled gardens, such as Google and Meta, in your advertising strategy, and what measures do you take to ensure equitable efficiency across diverse media channels, including those outside of these ecosystems?
When we talk about walled gardens, we’re referring to platforms such as Google, Facebook, Apple, and Amazon. However, any effective advertising strategy involves a mix of platforms, including those within and outside of these walled gardens. For instance, our Newton platform operates within the Apple Search Ads ecosystem, creating an additional layer to maximise its potential.
Our role is to leverage all available media channels to its fullest extent, utilising optimisation engines to purchase inventory across various platforms. While a significant portion of our inventory is sourced outside of walled gardens, we recognise the importance of working within these ecosystems to meet advertisers’ expectations.
Walled gardens are a reality in the advertising landscape and will likely continue to be so. However, many publishers still operate within the open Internet, which remains a crucial part of our strategy. Our platforms aim to integrate and work with all media channels efficiently, regardless of whether they are within walled gardens or on the open Internet.
Affle has filed patents covering various AI subjects, including automated AI agents and predictive analysis. What are your plans for the patented technologies and what role do you see these patents playing in driving future innovation?
Patents are filed based on the ongoing work we’re doing, which is already being deployed on our platform. Our primary focus remains on identifying the right users who are most likely to convert for advertisers at any given moment. This is the core problem our AI technologies aim to solve.
Our AI technologies are designed to understand user behaviour, predict app usage, transactions, and purchase decisions, thereby influencing the user’s journey and driving them further down the conversion funnel to deliver value to advertisers.
For instance, our Newton platform utilises AI technologies to power keyword recommendations for Apple Search Ads campaigns. It leverages natural language processing capabilities to recommend keywords in various languages, including vernacular languages, to optimise campaign performance.
These AI capabilities are continually evolving to enhance our platform’s effectiveness and will continue to do so as we progress.
What percentage of Affle’s revenue comes from the Indian market in comparison to its global revenue share? What does the company’s future roadmap look like?
We have a diversified revenue stream globally, with approximately 30% of our revenues coming from India and the remaining 70% from international markets. I believe our focus is strong on both fronts, with all our product platforms and growth initiatives tailored to cater to both Indian and international markets.
India remains a core focus for us, with a strong growth trajectory anticipated. Similarly, we are committed to driving growth in international markets. Our primary goal is to enhance value for advertisers, publishers, and consumers alike.
We prioritise improving the consumer experience at every touchpoint, ensuring that the recommendations and ads they encounter are relevant and valuable. This includes initiatives such as providing deals, discounts, and personalised recommendations to enhance consumer engagement and generate return-on-investment (ROI) for our advertisers.
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