How programmatic advertising is gaining popularity amongst advertisers in India

No, Firstcry does not have a magic wand. What it does have is a cross-channel customer relationship management (CRM) remarketing platform tool called RevX, created by Komli Media, a company that handles digital ad sales of social media platforms such as Facebook and Twitter. In its effort to reach consumers who have stopped visiting its website as well as using the mobile app, the e-commerce player opted for personalised advertisements on Facebook instead of releasing several banners on different websites. Firstcry identifies customer segments based on CRM data, mobile and desktop browsing data. The customer profile goes to an ad exchange where automated buying and selling of online space takes place real time. With the aid of RevX, Firstcry creates personalised and product recommendation ads depending on what each consumer is looking for, which now pop up whenever the customer comes online.

The results are there to be seen. Firstcry says it has seen a 3% increase in the click-through rate, that is, the proportion of visitors to a web page who follow a hypertext link to a particular site. The number of people who made purchases also increased by 6% and finally, the return on advertising spend was up six-fold.

“Advertising is no longer about chasing the consumer madly by being present on all mediums including television, print, radio, outdoor and digital. Rather, it is about being present with a service exactly when the consumer is in need of it,” said Anuj Jain, senior vice-president, marketing, Firstcry.com.

Welcome to the world of programmatic advertising. Already gaining popularity amongst advertisers, it is emerging as an efficient mode to buy ad inventory using consumer behaviour patterns and various analytical tools, thus relegating manual buying to the back seat. According to industry estimates, the digital advertising market in India is worth R4800 crore. Of this, search engine optimization (SEO) and search engine marketing (SEM) together accounts for 35%, while display and social media is about 42% and the rest includes email marketing, mobile advertising, amongst others. Programmatic advertising, which is 10-15% of display, currently stands at about R300 crore. “Despite digital witnessing a double-digit growth in India, the country still lags behind America and Latin America when it comes to advertising through programmatic. While in Latin America, programmatic accounts for 30%, in the US programmatic advertising is 25% of display advertising,” said Mukesh Agarwal, vice president, Komli Media.

To begin with, there are different formats of programmatic buying such as programmatic direct, real time bidding (RTB) and programmatic PMP. “Under programmatic direct, a buyer and a seller negotiate a fixed price after which the inventory is traded on programmatic platforms. In this mode, auction doesn’t happen,” said Atique Kazi, director, Xaxis India, the programmatic buying arm of GroupM adding, “Now think of Dalal Street and that is what RTB is all about. Advertisers bid for inventories in an exchange environment and win impressions. Within the real time bidding environment, there exists the private market places (PMP) option where a publisher opens up its inventory to only a select group of buyers.”

Kazi goes on to say that in India,  PMP and programmatic direct work better. “Accessing open exchange inventory has its own set of problems, mainly non verified ad impressions, brand safety and viewability issues,” he explained.
Besides GroupM’s Xaxis and Komli Media, there are several companies such as Appnexus promoted by WPP and Chocolate by Vdopia which are providing programmatic advertising services. Some of them are pure demand side platforms (DSPs) while others operate as trading desks, also known as ad exchanges. Each of them offer their own programmatic tools—Turbine owned by Xaxis, RevX by Komli Media apart from DSPs such as MediaMath, Turn, Tubemogul and Strikead; the last used by AMNET, the programmatic arm of Dentsu Aegis Network.

Meanwhile, Facebook has its own platform called Facebook Exchange (FBX) which allows real time bidding, while Google has two different kinds of platforms – one for advertisers and the other for publishers. For advertisers on
the DoubleClick Stack platform, Google has an array of products starting with DoubleClick Bid Manager (DBM), DoubleClick Search (DS), DoubleClick Campaign Manager (DCM) and DoubleClick Studio. As for publishers, Google runs DoubleClick for Publishers (DFP). Not to forget, each tool has its own advantages.

As for digital agencies that so far relied mainly on third party tools, the aim now is to create their own tools. Agrees Narendra Dubey, media practice, To The New Digital, a digital services agency, who says the agency is currently contemplating creating its own tool for programmatic advertising. “Apart from popular ad exchanges, there are the DSPs which in turn have access to more than one ad exchange’s inventory. Even some agencies have their own trading desks which is a centralised, service-based organisation that serves as a managed service layer, typically on top of a licensed DSP and other audience buying technologies,” said Dubey.

Citing a recent campaign executed for British Airways, Sumit Aggarwal, country manager, AMNET India said, “Targeting the right channels enabled us to reach the desired middle to high income households that are willing to purchase British Airways tickets. This, in turn, allowed us to build up a cookie pool and drive substantial conversions. We also used geographic targeting to ensure sufficient audience reach in all of the provinces specified.” While AMNET mostly selects demand side platforms keeping in mind advertisers’ campaign objectives, for data it works with companies such as Bluekai, Exelate and Lotame. “On top of this,  we have Amnet Audience Centre which helps us collect audience data from different sources such as advertisers’ sites, publishers and third party data providers to create actionable audience segments,” said Aggarwal.

According to Prabhvir Sahmey, head of media platforms, Google India, a lot of media buying actually happens programmatically, whether it is Google Display Network on AdX or any specialised re-marketing network or any of the numerous affiliate or mobile networks that buy or trade inventory on exchanges, although they may work on a different engagement or metric with the marketer. “This will only increase. We are already witnessing large Indian publishers putting their inventory on programmatic, with some of them even making their most exclusive and premium inventory available on preferred deals,” said Sahmey.

Meanwhile, Twitter tweaked its Amplify program in May this year, to launch a better version called Auto Amplify. The two-year-old Amplify program allowed TV networks and other media companies to sell pre-roll ads against video clips uploaded on Twitter as promoted tweets. The new program lets a brand survey Twitter’s library of Amplify videos and select the one it would like to advertise against. The brand then pays Twitter to run that video as a promoted tweet with a pre-roll ad playing before the video. It should be noted that the social media platform which runs the service in other Asian countries is yet to introduce programmatic buying in India.

Online companies, especially e-commerce players, have mastered the art of programmatic buying given their ability to mine user consumption data. From e-tailers such as Myntra, Jabong and Firstcry to online payment solutions provider Paytm, each one is relying on programmatic advertising when it comes to targeting  precise consumer segments.

“Being a technology driven company we understand digital better and so we can use programmatic advertising to its maximum potential especially when it comes to re-targeting consumers,” said Shankar Nath, senior vice-president, Paytm.com.

However, that is changing now with fast moving consumer goods (FMCG) companies, beverage makers, automakers, etc., playing catch up. For instance, when Daikin India had to promote its newly launched range of air purifiers, the company opted to target relevant consumers through programmatic advertising on Facebook. Relevant inventory was bought through real time bidding on Facebook through its ad exchange FBX.

“Not only did we receive a lot of queries, we sold 4000-5000 units post the release of the campaign on Facebook,” said Kanwal Jeet Jawa, manaing director of Daikin Air-conditioning India.

And if India has companies such as Daikin opting for programmatic, in the US, FMCG giant Proctor & Gamble (P&G) is looking at buying 75% of its media programmatically, while American  Express wants to take this to 100%.

“This is a brave and ambitious goal for one of the largest media spenders in the world. These are large and very evolved marketers who have been experimenting with programmatic for quite some time, only to discover the clear advantages that programmatic media buying offers,” added Sahmey of Google India.

Even as advertisers and agencies have taken to programmatic buying in India, publishers say they are yet to reap the benefits of this new form of advertising. While most publishers sell about 80% of their digital inventory through manual deals that allows them to command a better ad rate, only 20% is sold through programmatic. For  inventory sold through manual deals, the cost of banner ads on more popular websites and applications such as NDTV, Firstpost and The Times of India is R200-250 cost per impression (CPM); the cost comes down to R70-150 CPM in case of newbies or second-rung apps/sites. Similarly, the cost of running ads during a video ranges from R3-4 per view in case of popular sites. As for buying a fixed presence for a month on websites and m-sites/apps such as NDTV which generates 6-8 million visits per day, advertisers need to shell out R5-6 lakh, whereas a ‘roadblock’, as per which all ads on a web page are dedicated to one advertiser on The Times of India’s website and m-site/app costs R6-7 lakh per day. In contrast, publishers say the are unable to command a good ad rate when using programmatic.

Agrees Sanjay Trehan, business head, digital content and syndication, HT Media who says this is true because even as programmatic bidding happens, the process is not 100% real time. “For real time, the data and profiling of the user has to happen at milliseconds. With all networks and exchanges forming a pool, the process of executing and getting efficiencies becomes a tedious task. However, the technology is ready for it and we are testing it on  various platforms,” he added.

Dubey of To The New Digital points out that each impression has different value to an advertiser. “Direct buys are almost always priced in fixed cost per impression (CPM) rates, where the inventory is sold in bulk and all impressions are essentially priced the same. “With real time bidding each impression is auctioned off. Since each impression is priced individually and a cost-per-impression metric would be impractical to advertisers from a reporting perspective, the de-facto metric for RTB pricing is effective CPM or eCPM,” he said.

Titir Pal, director-products and solutions, Absolutdata Analytics, an analytic firm, points out that it is not the system which is at fault. Rather, the inability of publishers to mine data and provide minute details based on consumption patterns is the reason behind them losing out. “When compared to an e-commerce website which can provide several types of data including customer relationship management, website browsing coupled with mobile site/app data, publishers are yet to take a deep dive and this is the reason why they are not able to command better ad rates,” said Pal.

Agrees Nath of Paytm.com who says publishers’ inability to mine data has led to advertisers relying more on social media platforms such as Facebook and Twitter apart from Google. “I would rather spend money on Facebook knowing that I will be able to touch base with my customer in a more efficient manner instead of going to five publishers who would only be able to provide me with traffic data and no further details such as areas of interest, time spent on reading a particular kind of content, for instance, entertainment based articles through which I could get to know that she is interested in fashion, etc.,” he added.

Even as programmatic has made life in the virtual world easier for advertisers as well as agencies, constantly following consumers with targeted ads raises questions about privacy rights of the consumer. “While programmatic is about targeting specific users at the right time with the right message leveraging some of the information about their past online behaviour such as search, pages visited and transactions done, constantly following a user through re-marketing, that is showing the same ad of one of the sites he visited for a couple of days can be annoying. So data used is anonymised and sites have disclaimers about it, there is no personally identifiable information (PII) ever shared with any one,” said Aggarwal of AMNET.

At a time when advertisers, agencies and publishers in India are still trying to get their web act right, in the US programmatic buying has already taken a leap from digital to television now. Last year in May, marketing software and analytics platform Turn launched programmatic TV, giving marketers a new tool to find and target audiences online and offline, across every device and channel. As Agarwal of Komli Media says, while no one knows what  surprises the future holds, one thing is clear. Digital can be expected to play a stronger role in the future and along with it, programmatic will also find its place in the hearts of advertisers, agencies and publishers too, he said.