Blog Post

40% Rise In CPM In First Half , Need To Educate Market, Increase Net Spends: mKhoj

In the first of a series of two interviews on mobile web advertising, we speak with Abhay Singhal, Vice President, Corporate Sales and a co-founder of mKhoj. image

CS: How do you propose to help increase net spends on Mobile?
AS: The mobile ecological system has to work in tandem to help increase the net spend on mobile. As with any other new thing, brand managers and agencies are taking baby steps in testing out this medium, basis the success of which they are not afraid to commit larger spends. We have seen this in our own network where the advertisers look for a partner who can work with him to define the campaigns, define the ROI and help meet the expectations. We see two clear cut ways in which the net spend can be increased on this medium: Rightly setting the expectation of the client and meeting them and educating the client on what are the benefits of the medium and helping him design the campaigns which bring out these features.
Our own success stories make us believe that if both of the above are done rightly, it will help increase the net spends by any advertiser.

CS: When do you see rates averaging at global standards?
AS: I understand that there is a huge disparity between the rates prevalent in different geographical regions. However, I do see that as pure demand/supply game. Over the last six months, we have seen average CPC prices going up by 50% on our network and CPM prices by 40%. There have been incidents where the inventory has been sold for much higher prices but those are far and few. If you look at average price, we are fairly below the global prices (largely the prices in the US), and I expect our prices to remain at the same level or grow marginally. We expect a lot more inventory to get added over the next couple of years while the advertiser demand would also grow. The Indian market may never reach the kind of level the prices have in the States and currently because the rate also depends on the capacity of an advertiser to pay for the medium.

We as an organization are committed to delivering better technical targeting solutions which will help increase the ROI which an advertiser and publisher gets from our network. Advertiser would be willing to pay higher as long as their expectation from the medium is meeting and hence it again becomes important for companies to educate and manage the expectation well. We have a 5 ad formats as of now Click to call, click to video, click to lead, click to download and click to landing page

CS: How different/similar is India in terms of usage patterns to both China as well as developed countries like the US?
AS: China, as such, is a very local market, the content generation and consumption is very local. That defines the economy as quite a closed economy from the VAS or mobile advertising point of view. India, in comparison, is a fairly global friendly market. Because of English being the primary language, India is a huge global content consumer, and vice versa. Content generated out of India is also consumed globally. This is one primary difference which differentiates two entities. Proof of the same is that India already contributes to large % of the traffic which global sites receive on month on month basis. In terms of comparison with developed nations like US, India fairs lower in terms of % of VAS revenue as part of ARPU. However, the best part is that growth in VAS revenue is far higher than it is in US and per person consumption of VAS is increasing substantially. It is expected that in India consumption of VAS, be it through ringtones etc, or through internet consumption will continue to increase much faster as compared with the pace in the States.

What competitive advantage does mKhoj have over other mobile ad networks and more after the jump

CS: What competitive advantage does mKhoj have over other mobile ad networks?
AS: mKhoj as an organization is committed to making the campaign work for an advertiser from ROI point of view. We understand the behavior of mobile users and our superior technology allows precise targeting, something which enhances the overall ROI. We also support our campaigns through a dedicated campaign management team which helps clients understand mobile advertising and its nuances. As compared to our nearest competitors, our advertiser will vouch for better understanding, service and ROI from campaigns executed over mKhoj as compared to others. mKhoj has executed a lot of campaigns leading to multiple different goals, we have geography, which handset manufacturer, which Ad copy, etc. is working best for them, this makes spending money on our set of tools lead to returns

CS: How do you think 3G will impact consumption in India (in terms of both usage, ad rates, etc)?
AS: Launch of 3G in India is going to drastically impact the way mobile VAS is consumed in a very positive way. It will create a platform which will increase the demand for mobile content and VAS, something which will fuel local content creation. We are already seeing lot of investment from big media houses in increasing their WAP inventory as they envisage a huge jump in requirements.

CS: Are you’ll looking to expand offerings based on new/existing models (ADCRBT/contextual SMS ad pushes)
AS: Since the beginning we have focused on building an advertising product and service which provides our advertisers maximum returns. The way we had envisioned mkhoj is to be a union of metrics / Measurability and Reach / penetration and Opt in Marketing. Both CRBT (NYSE: BT) and SMS, even though they have a huge reach, it misses out on metrics or misses out on opt in. So we would definitely want to get into these models once we know for sure that these are scalable and can get returns for our clients.

CS: What’s your overall strategy for India?
AS: Our overall strategy for India is to educate our clients and agencies and execute as many pilot campaigns as we can. There is no other way to increase the ad spends but to show the results with a smaller spend and that is something which mKhoj is committed to.

Tomorrow, the second in this series of two interviews concludes with Niren Hiro, Vice President, Business Development at AdMob Inc.

6 Responses to “40% Rise In CPM In First Half , Need To Educate Market, Increase Net Spends: mKhoj”

  1. I guess WiMax if handled well – will have mroe +ve impact in India scenario than 3G – both for its wider reach, user experience [higher bandwidth] and ofcourse economics.
    Social networks, markets trends and movie content will probably be the three major data consuming applications – to be targeted by mob-ads.

    Good going mKhoj your transformation from mobile serach engine to mobile advertisements looks complete and convincing as well.

  2. Kshitij

    I like it that these guys are giving the global players a good fight. Keep it up guys, you are being keenly watched by many of us who aspire to be like you.