Online Ads turn Ybrant indeed
G. Ram Mohan
Jun 04, 2010
HYDERABAD: With the
traditional media like the newspapers and a surfeit of TV channels scurrying,
vying for attention and eyeballs, the consumer spoilt for choice has become the
king. Getting his/her attention according to the needs, choices and preferences
tailor-made for them thus attains added importance. No wonder, advertisers are
increasingly banking on target advertising which is facilitated by digital
marketing.
It’s here the new media enabled digital marketing provides the flexibility and the room for manoeuvre for advertisers to zero-in on the exact profile of customers they want to reach out to. No wonder, Ybrant Digital, a Hyderabad-based digital marketing player, has grown from strength to strength through both organic and inorganic routes and now boasts of presence in 16 countries spanning across continents of Europe, Latin America, North America and Asia.
Digital media channels which now account for more than 10 per cent of overall worldwide advertising spend is expected to touch approximately 21 per cent by 2014 with the United States still being the primary market for digital marketing. Internet advertising revenues in the United States spiked by 10.6 per cent to US$ 23.4 billion in 2008 as compared to 2007.
“We help run advertisements by buying traffic instead of space for running them. The same website can have different advertisements in different geographies targeting a particular segment of the population. We promote companies and monetize on traffic. The advent of smart phones which are internet enabled will open another platform for us,” said Suresh Reddy, Chairman and CEO of Ybrant Digital, who runs the US $ 70-million YBrant group speaking with andhrabusiness.com.
Excerpts from interview:
Now that you have filed your DRHP, how much do you plan to raise through the IPO? What is the stake you plan to divest through it?
It is true that we had filed the DRHP but pulled out in view of the slowdown. We have acquired three companies after that. The size of the company has increased, so everything from the size of the issue, to the stake to be divested to the lead banker has to be reworked.
Oridian, an Israeli company, Dreamad-an Argentina company with offices in four Latin American nations and Max Interactive in Australia figure among the companies acquired. We are looking at more acquisitions in the near term. The IPO will probably be announced this year.
How many clients have you added recently, apart from the 140 clients like Yahoo!, Capitalone, Vayan marketing, Ad Dynamics, and SEO Inc?
We keep adding clients on a daily basis. They change from time to time. We have added another 20 advertising agencies to our clientele. We deal with top advertisers, publishers and agencies like Vodafone, Pepsi, Adidas, Sony, msn, yahoo, photobucket, hi5, Ogilvy and Mediacom among others.
What is the current head count of the company? How is digital advertising different and better from the traditional media?
The current head count of the company is 350. In a newspaper or TV, you are not sure how many have actually used it. We have the technology to track the number of users to know how many are materializing into buyers and thus can target advertisements at a particular segment of the populace. We can track the traffic and revenue flow.
The medium enables even small players like cookery sites, motorcycle enthusiasts, sites which promote student loans from banks which are not big enough to have separate advertisement departments but have decent number of users. This medium enables them to have advertisements related to their niche area and get end revenue. We can facilitate this by what is called affiliate marketing and will foray into it shortly.
How are you marketing your services? Do you use SEO, SEM services?
We have marketing professionals across Europe and other parts of the world, attend trade shows and announce new products through SEO (search engine optimization) on some services.
What is your share of the online advertisement revenue market? How do you plan to scale it up?
The online advertisement revenue market worldwide is worth around $ 45 billion. The industry is very fragmented and the largest player valueclick.com, based in the United States, is only half-a-billion dollar in size. The industry is growing Y-O-Y and compared to the 2 per cent advertisement spend in 2002, the medium now attracts 10 per cent in US. In India, it is still less than 2 per cent. In the United Kingdom, it has crossed 10 per cent and during the dotcom boom, it was between 15 and 20 per cent. The reason for its growth is it’s a trackable medium where the user reach can be tracked.
The industry is in for consolidation. Our goal is to be one of the bigger ones. We are looking at both organic and inorganic route to scale up in size. We hope to buy more companies in the digital marketing segment. We want to get into affiliate marketing.
What is your revenue model? Explain about the arrangement you have with advertisement agencies and online publishers? Among the many services you offer which service generates more revenue for your company?
We buy traffic from publishers and sell it to advertisers in the form that they want and help optimize their campaign. Based on the geography and other parameters, advertisements can be targeted. The publishers can hedge themselves against any delay in payments, we take care of these things.
If needed, we can also pitch in and prepare advertisements for our clients. The smaller companies bank on us for these services. An advertisement given in one format can be changed into various formats and used.
Our revenue comes in three ways: 1. banner advertising- which gives us the maximum revenue.
2. Services- Our technology is used by publishers and advertising agencies.
3. Search marketing- Outside Google, there is a lot of advertising, we deal with that search word related spend.
Your VoloMp solution site claims it can send up to a maximutwo crore (20 million) mails a day. How do you ensure that they don’t end up in the spam box so that your clients gain the maximum mileage?
We ensure that the e-mails sent by us do not end up in the spam boxes by working with white-listed IPs. We talk with the likes of Hotmail, Yahoo, Google and get them this option. The client gets himself white-listed. We give the technology to the clients. There is a process called opt-in. Users are sought permission to send mails to them. Verified double opt-ins are counted and then mails are sent.
Tell us about the latest trends in online advertising? How do you see the growth in this segment? How has recession impacted this segment?
Online social media is catching up and has emerged as a powerful tool on the internet. Farmville started by Zynga Game Network Inc. now has 50 million users having just started in June, 2009. Gaming is becoming huge and the user base is 25 to 30 year olds who have become addicted to them. Mobile marketing will catch up with the launch of 3G and the advent and penetration of smart phones into the market. The scope for some arrangement between telecom companies and internet service providers are likely to improve as some like Bharti Airtel are into both the services.
During the slowdown, brand marketing that is CPM (cost per impressions) got affected while CPA (cost per leads/ customer acquisition, which means the viewer has bought the product) has picked up and improved. We shifted from our CPM-centric approach to CPA because of this. Performance marketing has taken precedence over brand marketing.
How did you hit upon starting Ybrant Digital? How is your first venture Usagreetings.com faring currently?
We first started usagreetings.com in 1999 during the dotcom boom period. We also started a dotcom company and found that many dotcoms needed manpower and technology and advertisements for survival. We provided a platform for them initially and then became a company which markets digital advertisement traffic in a logical progression of events then shifted to India in 2001 and began to build Ybrant Digital. Our first venture usagreetings.com is not owned by us any more. We have sold it.
Are there plans to make YReach service available for other cities. Will new categories be introduced?
Our plan is to take YReach to cities like Mumbai, Ahmedabad and Delhi initially in the next six months. YReach is similar to justdial.com in that it facilitates search of various things on a particular geographical area. Unlike justdial.com which is a yellow page kind of search, YReach is more of a lifestyle related search tool which targets the young yuppies who are web savvy and have the deep pockets to splurge. With both the sexes working now, we hope to make their entertainment easier by giving them lifestyle solutions.
YReach can be contacted through SMS, phone or through the web by logging into the site. Movie tickets can be bought through our website. We have a partnership with bookmyshow.com for this. We are expanding the database on YReach based on the needs of users. We are more into e-marketing than e-commerce in line with our philosophy.
Tell us about yourself.
I am basically a B.Tech in mechanical engineering from IIT, Kharagpur. Then I did my MS from the Iowa State University in US. I then worked for companies like Caterpillar and Chrysler where I did structural simulation. I was hence comfortable with software related things. Then I switched to Charles Schwabb, a financial house and did software development for them and also for AT&T (Pacific Bell). I then moved to India in 2001 to start Ybrant Digital.
About my reading habits, I normally like to read books on business, philosophy and sometimes fiction also.
It’s here the new media enabled digital marketing provides the flexibility and the room for manoeuvre for advertisers to zero-in on the exact profile of customers they want to reach out to. No wonder, Ybrant Digital, a Hyderabad-based digital marketing player, has grown from strength to strength through both organic and inorganic routes and now boasts of presence in 16 countries spanning across continents of Europe, Latin America, North America and Asia.
Digital media channels which now account for more than 10 per cent of overall worldwide advertising spend is expected to touch approximately 21 per cent by 2014 with the United States still being the primary market for digital marketing. Internet advertising revenues in the United States spiked by 10.6 per cent to US$ 23.4 billion in 2008 as compared to 2007.
“We help run advertisements by buying traffic instead of space for running them. The same website can have different advertisements in different geographies targeting a particular segment of the population. We promote companies and monetize on traffic. The advent of smart phones which are internet enabled will open another platform for us,” said Suresh Reddy, Chairman and CEO of Ybrant Digital, who runs the US $ 70-million YBrant group speaking with andhrabusiness.com.
Excerpts from interview:
Now that you have filed your DRHP, how much do you plan to raise through the IPO? What is the stake you plan to divest through it?
It is true that we had filed the DRHP but pulled out in view of the slowdown. We have acquired three companies after that. The size of the company has increased, so everything from the size of the issue, to the stake to be divested to the lead banker has to be reworked.
Oridian, an Israeli company, Dreamad-an Argentina company with offices in four Latin American nations and Max Interactive in Australia figure among the companies acquired. We are looking at more acquisitions in the near term. The IPO will probably be announced this year.
How many clients have you added recently, apart from the 140 clients like Yahoo!, Capitalone, Vayan marketing, Ad Dynamics, and SEO Inc?
We keep adding clients on a daily basis. They change from time to time. We have added another 20 advertising agencies to our clientele. We deal with top advertisers, publishers and agencies like Vodafone, Pepsi, Adidas, Sony, msn, yahoo, photobucket, hi5, Ogilvy and Mediacom among others.
What is the current head count of the company? How is digital advertising different and better from the traditional media?
The current head count of the company is 350. In a newspaper or TV, you are not sure how many have actually used it. We have the technology to track the number of users to know how many are materializing into buyers and thus can target advertisements at a particular segment of the populace. We can track the traffic and revenue flow.
The medium enables even small players like cookery sites, motorcycle enthusiasts, sites which promote student loans from banks which are not big enough to have separate advertisement departments but have decent number of users. This medium enables them to have advertisements related to their niche area and get end revenue. We can facilitate this by what is called affiliate marketing and will foray into it shortly.
How are you marketing your services? Do you use SEO, SEM services?
We have marketing professionals across Europe and other parts of the world, attend trade shows and announce new products through SEO (search engine optimization) on some services.
What is your share of the online advertisement revenue market? How do you plan to scale it up?
The online advertisement revenue market worldwide is worth around $ 45 billion. The industry is very fragmented and the largest player valueclick.com, based in the United States, is only half-a-billion dollar in size. The industry is growing Y-O-Y and compared to the 2 per cent advertisement spend in 2002, the medium now attracts 10 per cent in US. In India, it is still less than 2 per cent. In the United Kingdom, it has crossed 10 per cent and during the dotcom boom, it was between 15 and 20 per cent. The reason for its growth is it’s a trackable medium where the user reach can be tracked.
The industry is in for consolidation. Our goal is to be one of the bigger ones. We are looking at both organic and inorganic route to scale up in size. We hope to buy more companies in the digital marketing segment. We want to get into affiliate marketing.
What is your revenue model? Explain about the arrangement you have with advertisement agencies and online publishers? Among the many services you offer which service generates more revenue for your company?
We buy traffic from publishers and sell it to advertisers in the form that they want and help optimize their campaign. Based on the geography and other parameters, advertisements can be targeted. The publishers can hedge themselves against any delay in payments, we take care of these things.
If needed, we can also pitch in and prepare advertisements for our clients. The smaller companies bank on us for these services. An advertisement given in one format can be changed into various formats and used.
Our revenue comes in three ways: 1. banner advertising- which gives us the maximum revenue.
2. Services- Our technology is used by publishers and advertising agencies.
3. Search marketing- Outside Google, there is a lot of advertising, we deal with that search word related spend.
Your VoloMp solution site claims it can send up to a maximutwo crore (20 million) mails a day. How do you ensure that they don’t end up in the spam box so that your clients gain the maximum mileage?
We ensure that the e-mails sent by us do not end up in the spam boxes by working with white-listed IPs. We talk with the likes of Hotmail, Yahoo, Google and get them this option. The client gets himself white-listed. We give the technology to the clients. There is a process called opt-in. Users are sought permission to send mails to them. Verified double opt-ins are counted and then mails are sent.
Tell us about the latest trends in online advertising? How do you see the growth in this segment? How has recession impacted this segment?
Online social media is catching up and has emerged as a powerful tool on the internet. Farmville started by Zynga Game Network Inc. now has 50 million users having just started in June, 2009. Gaming is becoming huge and the user base is 25 to 30 year olds who have become addicted to them. Mobile marketing will catch up with the launch of 3G and the advent and penetration of smart phones into the market. The scope for some arrangement between telecom companies and internet service providers are likely to improve as some like Bharti Airtel are into both the services.
During the slowdown, brand marketing that is CPM (cost per impressions) got affected while CPA (cost per leads/ customer acquisition, which means the viewer has bought the product) has picked up and improved. We shifted from our CPM-centric approach to CPA because of this. Performance marketing has taken precedence over brand marketing.
How did you hit upon starting Ybrant Digital? How is your first venture Usagreetings.com faring currently?
We first started usagreetings.com in 1999 during the dotcom boom period. We also started a dotcom company and found that many dotcoms needed manpower and technology and advertisements for survival. We provided a platform for them initially and then became a company which markets digital advertisement traffic in a logical progression of events then shifted to India in 2001 and began to build Ybrant Digital. Our first venture usagreetings.com is not owned by us any more. We have sold it.
Are there plans to make YReach service available for other cities. Will new categories be introduced?
Our plan is to take YReach to cities like Mumbai, Ahmedabad and Delhi initially in the next six months. YReach is similar to justdial.com in that it facilitates search of various things on a particular geographical area. Unlike justdial.com which is a yellow page kind of search, YReach is more of a lifestyle related search tool which targets the young yuppies who are web savvy and have the deep pockets to splurge. With both the sexes working now, we hope to make their entertainment easier by giving them lifestyle solutions.
YReach can be contacted through SMS, phone or through the web by logging into the site. Movie tickets can be bought through our website. We have a partnership with bookmyshow.com for this. We are expanding the database on YReach based on the needs of users. We are more into e-marketing than e-commerce in line with our philosophy.
Tell us about yourself.
I am basically a B.Tech in mechanical engineering from IIT, Kharagpur. Then I did my MS from the Iowa State University in US. I then worked for companies like Caterpillar and Chrysler where I did structural simulation. I was hence comfortable with software related things. Then I switched to Charles Schwabb, a financial house and did software development for them and also for AT&T (Pacific Bell). I then moved to India in 2001 to start Ybrant Digital.
About my reading habits, I normally like to read books on business, philosophy and sometimes fiction also.
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