Affle (India) Limited, is a global technology company with two business segments: (a) Consumer Platform, which comprises of (1) proprietary consumer intelligence platform that delivers consumer acquisitions, engagements and transactions through relevant mobile advertising and (2) retargeting media business for e-commerce companies along with its push notification offerings for e-commerce companies on a software as a service model (“Vizury Commerce Business”); and (b) Enterprise Platform which primarily provides end-to-end solutions for enterprises to enhance their engagements with mobile users.
In an interview with AdAge India, Anuj Khanna Sohum, MD, Affle India, speaks about their future plans.
Q. What are your Views on Business Acquisition of Vizury and market. Also, is Affle eyeing more acquisitions in CY 2019?
Last year has been quite exciting, we had done two acquisitions and we will continue to look to acquire businesses, assets and technologies that complement our existing capabilities, revenue streams and marketing presence in future as well.
The most recent (effective 1st September 2018) acquisition is of Vizury Commerce Business, which has elaborated the breadth of our service offerings, especially to e-commerce companies. This acquisition has strengthened our Consumer Platform proposition through which we currently deliver consumer acquisitions, engagements and transactions by relevant mobile advertising.
While in March 2018, we acquired Markt, which had an offline to online (O2O) commerce platform that helped offline companies to go online through platform-based app development, enablement of O2O commerce and customer data platform.
With these acquisitions, now we have end-to-end marketing stack for brands across the value chain in digital advertising, spanning across DMP (Data Management Platforms), DSP (Demand Side Platforms), SSP (Supply Side platforms), Fraud Detection, Ad Network, O2O Commerce and Re-targeting.
Q. What kind of growth is lined in the Advertising tech industry in the coming few years?
Over the years, the industry has evolved and become more consumer-focused with marketers innovating ways to reach the targeted consumer and optimize the cost per converted user. With this, we have been uniquely positioned as our Consumer Platform backed by proprietary consumer intelligence delivers consumer acquisitions, engagements and transactions through relevant mobile advertising. Our Consumer Platform benefits from broad access to mobile ad inventory through our relationships and reach across the value chain.
Our Consumer Platform aims to enhance returns on marketing spend through delivering contextual mobile ads and reducing digital ad fraud while proactively addressing consumer privacy expectations. It utilizes user-intent indicators derived from behavioral signals, marketing attribution and transactional data which are received in real time and accumulated over time that increases our ability to predict user’s likely interests. As at March 31, 2018, we had approximately 1.18 billion consumer profiles, which powers the prediction and recommendation algorithm of our platforms.
Talking about growth, the report titled ‘Industry Insights on the Advertising and Ad Tech Market’ dated July 12, 2018, prepared by Frost & Sullivan (“Frost & Sullivan Report”) estimates that the Indian adtech market is likely to grow at a CAGR of 39% to USD 808 million in 2022. Retail, digital payments, gaming, travel, hospitality and e-commerce are the prime verticals contributing to the market growth currently. While the Frost & Sullivan Report estimates that the global ad tech market earned revenue of USD 34 billion in 2017 and is likely to grow at a CAGR of 10% over the next five years.
Q. Will increasing smartphone penetration help Affle’s growth in India?
Increasing smartphone adoption is one of the primary drivers that have boosted Internet consumption in India. Our platform provides end-to-end solutions for Mobile Advertising & App Marketing. Our MAAS (Mobile Audience as a Service) platform leverages audience data and helps optimize mobile advertising spends for our customers with support of our mDMP (Data Management Platform) platform which has over 1.18 Billion consumer profiles (as at March 31, 2018) while our mFaaS (Fraud Analytics as a Service) platform focuses on enhancing quality through fraud detection & prevention. Additionally, our Mkr8 platform enhances the ad content with rich media experiences, including interactive videos, games and augmented reality.
Apart from increased smartphone penetration, other factors that fuels the growth of mobile advertising are cost-effective data packages, proliferation of the mobile apps and social media and m-commerce. Frost & Sullivan Report estimates mobile advertisement spend is expected to grow at a CAGR of 32.7% to reach USD 1.93 billion in 2022.
Q. Who are Affle’s peer competitors?
The Indian market presents high barriers to entry, given its unique challenges such as a disjointed demographic, which is just getting habituated to digital applications (such as the use of e-commerce, digital payments, etc.) and low CPCU (Cost Per Converted User). In the last two calendar years, only about 25% of all Internet users in India have shopped online. Frost & Sullivan believes that this makes it more challenging landscape for marketing tech to be able to discern the users who have the highest propensity to transact online. India can be a hard market to sustain, even for market participants who are globally successful. The range of CPCU in India is quite low compared to the global market. Frost & Sullivan believes that achieving profitability in such a price-sensitive market is possible only for companies that are familiar with the dynamics of consumer profiles and have a track record of working alongside brands locally for years.
Therefore, we believe that our extensive consumer profile data, proprietary technology and local knowledge makes us better placed compared to global peers to deliver profitability in India.
Regarding our peer group, although there are no listed peers in India, there are a few companies that operate internationally, amongst them are Criteo, Tradedesk, and Freakout.
(Source: “Industry Insights on the Advertising and Ad Tech Market”, dated July 12, 2018)