Mobile video advertising’s the way to moolah

Are you among those who believe that poor data pack ecosystem in India is going to play spoilsport in the smartphone buzz? You may not be totally mistaken, but silver lining’s on the horizon — in contrast to 2012 Q4, most of the telecom players in India are slashing their 3G rates by 60-70 per cent now, followed by leading telecom players recently announcing that on-the-go 3G charges are going down by another 80 per cent.

These developments will make way for scale, and top mobile video advertising players, like Vdopia, are banking on it. Technologies to monetise mobile video advertising are in place and it’s a matter of time and scale before they start raking in the moolah. While, it’s true that India is predominantly a 2G market, Vdopia’s patented technology [.VDO] allows video advertising to happen seamlessly over 2G and 3G mobile devices automatically. The technology identifies the mobile device’s capability, if one’s running it on a 2G or 3G and it streams video accordingly. And the quality of the video output is same in both 2G and 3G. How? Technically speaking, it’s frame-rate-per-second that gets deferred.

But, given the fact that mobile advertising is less than 4 per cent of the overall advertisement pie in India, what is the kind of consumer attention one can look at looking at? During my recent meeting with Srikanth Kakani, co-founder and CEO of Vdopia, an air of optimism from this Stanford alumnus greeted me. “Consider the growth trajectory of mobile TV. By the end of 2012, the entire mobile TV ecosystem in India, if I just count the apps, was not even $1 million. By the third quarter of 2013, the whole ecosystem today stands at $10 million. Advertisers cannot ignore it,” said Srikanth.  

In pic: Srikanth Kakani, co-founder and CEO, Vdopia. Pic credit: Dalip Kumar

Next, look at the pure numbers: we have 27 million smartphones in India now, according to the latest IAMAI report. The report says that 40 per cent of internet accessibility in 2014 in Indian market will come from mobile devices. And the data players are realising this. Today, none of their ads talk about call rates. It’s data. What we are witnessing today is, mobile handsets are coming closer to Rs 6,000 price bracket, data packs are coming bundled in the phone, and it’s penetration in tier 2 and tier 3 cities is also poised to happen, because the conversion from feature phone to smartphone is happening at the rate of 40 per cent annually in India. At the end of 2014, India will already have 100 million smartphones with data pack and video capability. When the market is explode at this speed, the direction of monetisation or the marketing-dollar spend will also have to move in that direction.  

In fact, when it comes to video advertising, mobile is more flexible than other mediums, which make it cheaper — not because an advertiser is going to spend less money, but what he spends per impression in mobile will be much less than any other medium. That way, an advertiser will be spending less money per effective impression he is getting in mobile. And the best part: Srikanth claims, “TV advertising is fiction!” He reasons that how does one know if a TV ad is seen by the audience? How can one confirm if the audience didn’t ignore a TV ad by turning to other channel(s)? You don’t know, but in the digital platform you know. Television may be a popular platform for advertisements, but Srikanth’s incredulous unless analytics or data supports the claim. It’s a bold statement to make, but Srikanth stands his ground.