As the digital marketing scenario continues to evolve so does the solution. With artificial intelligence and machine learning now playing a critical role in marketing, martech companies like WebEngage have begun to cash in on the same. In April, WebEngage acquihired data scientists from Propeller AI to bolster data science and AI developments.
WebEngage’s revenue from operation rose 21.32% to Rs 117.21 crore in FY23 from Rs 96.61 crore in FY22, as per the regulatory filings accessed by Tofler. However, the company’s net profit increased 51.47% to Rs 23.63 crore in FY23 from Rs 15.60 crore in FY22. Ankur Gattani, chief growth officer, Web Engage, in a conversation with BrandWagon Online where more about enabling personalised marketing strategies, secure data management, and seamless customer service experiences across multiple channels are discussed. (Edited Excerpts)
With Web Engage focussing on marketing automation to drive user engagement along with creating hyper-personalised experiences for brands, how have you deployed machine learning and AI to achieve the same? What about data privacy?
At a company level, everything starts with the data that our clients publish firsthand. For example, if you’re a customer of MyGlamm and you make a transaction on their platform, you’ve given them permission to capture data about that transaction and how you use their platform, as well as permission to contact you. If you decide you don’t want to be contacted, your request is honoured, ensuring privacy. From a data security perspective, we meet the highest standards, including SOC compliance, to ensure that all customer data in our systems remains secure.
Technologically, our software development kit (SDK) is implemented on our clients’ mobile applications to capture user behaviour data. This data is then consolidated into our customer data platform, where we categorise it based on various criteria such as transaction details, user searches, and engagement across multiple channels. This structured information is invaluable for segmenting audiences and crafting personalised communication strategies.
Could you highlight specific features of your platform that are particularly effective in upselling or cross-selling to existing customers? Additionally, can you share any metrics that demonstrate the impact of your platform on driving revenue through improved customer retention and engagement?
We typically work with a variety of communication channels, including email, WhatsApp, SMS, and push notifications. However, additional channels like web browser push tend to be underutilised. When push communication is effectively utilised, it can deliver a substantial ROI. For instance, a typical push campaign to a million users can yield substantial engagement, with prospects reaching five to ten lakhs. While it’s a comprehensive category influenced by factors like average order values, the ROI from these channels remains significant. Compared to the cost per click on platforms like Google or Facebook, push notifications or web page notifications are much more cost-effective. Other channels like email and WhatsApp do have variable costs, but their return on spend often exceeds 50%, due to the nature of their cost structures. WhatsApp is the most expensive channel among them.
Regarding WebEngage’s impact on revenue, in scenarios where a brand is drawing a healthy rate of new customers, we can influence 20-30% of programme revenue. This is because we’re leveraging all of their first-party data and managing personalisation elements on their website or app, which significantly improves conversion rates. For example, if a platform has a typical conversion rate of 2-2.5%, we can boost that to 2.7-3%. This improvement is in addition to the revenue generated from our communication campaigns. So, our influence extends across both improving conversion rates and enhancing campaign performance, leading to a significant contribution to the overall revenue.
In April, WebEngage acqui-hired data scientists from Propeller AI to bolster data science and AI developments. How has this acquisition improved WebEngage’s ability to deliver personalised marketing experiences, and are there any new personalisation features planned for the future?
With the new team coming in, we’ve been able to significantly enhance our capabilities in delivering personalised marketing experiences. First off, because we’re sitting on a vast amount of customer data, this new team has helped us draw deeper insights from it. The data is now much better surfaced within our ecosystem, allowing us to understand our customers on a more granular level. For example, if you’re an e-commerce shopper with a fashion brand, both of us can go beyond just knowing what you’ve bought. We can infer your preferred price points—whether you lean towards premium, mass-market, or value segments. We can determine if you’re a trendsetter, always buying the latest styles, or if you prefer shopping during sales. Are you an impulse buyer or someone who researches thoroughly before making a purchase? These are the kinds of insights we’re now able to draw. With these insights, we’re incorporating derived attributes and building robust data models. This allows us to make real-time interventions. So, if we identify you as an impulse buyer on a fashion platform, and we see you’re lingering on the site longer than usual, we can trigger an offer or intervention at the perfect moment to encourage a purchase. The goal is to make our real-time interventions much more powerful by leveraging advanced data science and analytics.
Nearly two months ago, WebEngage released its State of Careers in Retention Marketing Report, which revealed that 40% of professionals consider data analytics a key skill for retention marketing success. In light of this, what impact have you observed on customer retention rates when businesses incorporate data and analytics into their marketing strategies? Additionally, have you encountered any challenges in this?
So generally the report was about all the retention professionals that we work with. The maturity of your understanding of data, how deeply you analyse it, and how well you interpret it are crucial to effectively driving retention rates. Different acquisition channels have varying retention rates, and even different browser sources or traffic sources—whether it’s mobile, iOS, Android, Chrome, or Safari—can impact retention differently. A common challenge we see is that some brands might allocate irrelevant resources to the job. They might excel at campaign execution but fall short in leveraging data to its fullest potential. To address this, more brands are investing in better dashboarding tools and bringing in senior people with strong data skills. When management pays attention to retention metrics and invests in data analytics, we start to see significant improvements in retention rates.
We accessed the ROC filings from Tofler, which indicated that WebEngage’s revenue from operations grew for the financial year 2022-2023, but the loss margin also widened. What are your priorities in terms of revenue, profit, and overall growth for the next financial year of 2024-2025? Additionally, what key areas of focus can we expect from WebEngage moving forward?
This past year, we’ve made significant investments, especially in expanding our operations. We’ve grown substantially in the Saudi and Middle East regions, established a presence in Africa, and set up a full team in Indonesia with a new office there. We’ve also ramped up our marketing efforts, which has contributed to the increased spending last year and affected our loss margin. Looking ahead, our focus is on consolidating and reaping the outcomes from these marketing efforts. We expect this to narrow our losses significantly. In terms of expansion, we’re seeing larger deal sizes and higher average contract values. This means the deals we’re making are more valuable, which in turn improves the efficacy of our marketing efforts. Geographically, we’re planning to maintain our current presence, with a potential slight expansion into Latin America. Our primary focus will remain on emerging markets for the next year or so. Currently, about 60-65% of our revenue comes from India, and 35% from the Middle East. We expect this to shift, aiming for at least 50% international revenue in the next few years. So in simple terms, this way more of a market rebate that’s simplified to put in.