Prashant Mehta is CEO of Komli Media, an Asia Pacific media technology company with products across display, mobile, video, social, search and data.
Click below or scroll for more:
- Komli's Geographic Focus
- India's Similarities to the U.S. Market
- Exchanges and RTB in India
- Revenue Momentum at Komli
- Milestones Ahead
AdExchanger: You have some familiar companies in your experience - including Wall Street background. Can you talk a little bit about how it all brought you to Komli?
PM: In the past I realized that I wanted to try and look at entrepreneurial pursuit. For example, when I was an undergrad, I started in the student credit union at Rutgers University where I was a BioChem major planning to go to medical school. And a friend of mine said, "Let's start a bank to help the students." We started it and we built it into the largest student credit union in the country. It got me thinking that business and finance might be where my heart is so I stuck with it and got my MBA from Wharton. From there I went on to Lehman where I traded the emerging markets credit desk and led that business for a few years.
At a certain stage, my wife wanted to move to California every year and I'd say, "Honey, next year, one more year." Eventually she said, "I'm going west" so I thought I'd make the change - and she had an offer from Yahoo. She told Yahoo at the time that if we went there, she'd find me a job because I obviously had no basis to be at Yahoo given my background. So I started in their class on business development, which is probably the closest thing to what I could have done and had a great eight and a half years at Yahoo!. This included six years or so in California and then two years in Southeast Asia in various roles - everything from leading their strategic alliance team to running the commercial operations of the emerging markets out of Southeast Asia, which included India, the Middle East, Eastern Europe, Africa, and Latin America.
By this stage, I realized that it was time for me to get back to doing something more entrepreneurial. I spent a lot of time at Yahoo!, I'd seen the cycles and the company had treated me well. But, I felt like it was time for me to build something. And the opportunity to talk to Amar Goel at Komli came about. I was already in Asia at the time and I believe that for the next five to ten years the growth is going to take place in this part of the world. So I decided to leave Yahoo three years ago and join Komli.
Let me give you a brief synopsis of the growth over the last four or five years. Amar started the company in 2006. He left the US, and moved to India to start the business which was focused on India and delivering the classic ad network solutions to the marketplace.
For the first couple of years, the company remained focused on India. Then the year after I joined, we continued to stay focused in India, built a good foundation in the marketplace and started investing in our core technology.
At the end of 2009, we started looking at opportunities outside of India, primarily driven by three factors. One is that we believed that we had built something that was capable of scaling or being leveraged outside of our market. Two, certainly in 2009, India was a relatively smaller market. Even today it's still smaller than a market like China. But it is now starting to pick up.
So we started expanding and exploring marketplaces. Given my background from the past, there were obvious choices. We launched into Australia, a large market - about 10 times larger than India and growing at a healthy 20 percent. It was about a $3 billion market at the time and English‑speaking, so we didn't have to make many changes to our platform or our solutions. From then on, our focus evolved to becoming a company that's providing media technology solutions across Asia‑Pacific and we believe that this is the market that we're focused on today as our presence extends from Australia, Southeast Asia, India, and the Middle East.
Are there plans to move into Europe, the United States or South America? What do you think?
Obviously, the markets in the US and Europe are deep. Our view is that we would rather be a big fish in a smaller pond. We also believe that we have a strong point of advantage in these markets where we are, multiple levels with strong relationships. Our platform is catered to these markets and we believe that the growth is taking place there.
India and Southeast Asia, for example, is where the US was, maybe, in 2000-2001. So, imagine if you're sitting in 2001 and you knew where this growth of digital advertising is going to go over the long-term, and you have the investment opportunity to put down some serious strategic dollars. You'd be lying on some beach right now. So the core for us is, “Can we add value?” And we feel that in our markets, we can add significant value. And the opportunities there - the markets have a tipping point.
Having said that, we have a bit of presence in Europe and the US, but that presence is primarily to cater to Asian audiences based in the US. It's just like markets that target Hispanics in America. We've got presence of sales people who help marketers like McDonald's or BMW target Asians like the Chinese, Filipinos and Indians.
So anything that happens in the US, is instantly available here ‑‑ at least, people have read up on it, people understand it. You've got some cousin, friend, classmate out in the US - knowledge transfers instantaneously. Having said that, what I meant by India is where the US was between 2000 and 2002 is the percentage of the digital spends online of the total market. So if you go back to those days, digital spends were five percent. And for a marketer, spending say $100 of which 30-40 percent was spent on TV, with some vast other percentage on print, another large chunk in radio – well, back then, digital was just a small part of their thought process.
Also, I remember when I was in the US and I was spending a lot of time with everyone from AT&T Wireless to GM to American Express and just educating them on the benefits and value of this medium. I was educating them on why the medium shouldn't only be based on some kind of a click basement. There were other measures of success that the medium brought to the table. That's what I mean. From a mindset point of view, that's where the market is from a percentage of spend. From a mindset, they want everything the US wants.
You talk about DSPs - everyone here talks about DSPs. SSPs, DMPs, you name it. They know all the acronyms. They might not know what it stands for, but they are all asking and they want it. So I feel that what this means is, at some level, it's similar to the US in terms of the size of the ad spend as a percentage of total media. The way I think India and Southeast Asia are going to exceed the trajectory of what happened in the US is for the following couple of reasons:
One, in the US, at that time the market was learning itself. It was educating itself, because they were the most advanced at the time. Today, everybody here knows what's happened in the US. So they're all waiting. They all want the latest. They want the latest in creative technology; they want the latest in social technology and search. And they're getting educated much more quickly here.
Secondly, the growth of the fundamentals in India is starting to accelerate. This means that in India today there are somewhere around 100 million users online. As we're educating the market, we're seeing out of those 100 million people, you've literally got 95 percent of that population that is interested in buying a car. Here in the auto space, we've captured 95 percent of the population. So they're starting to appreciate that while it is only 100 million, it still is the most valuable 100 million of audiences that you'd ever want to go after.
Also, the growth of the digital medium is accelerating because of the low cost of PCs coming to market. Tablets are coming into this market for $150. A PC typically would cost you here the same as it costs in the US, $1,000-$1,500. If all of a sudden you bring a piece of equipment, a capability, an enabler that is a ninth or a tenth of the cost, the amount of the population that can afford it grows exponentially. It's not linear.
So all of a sudden the online population which went from zero to 100 million in 15 years, will be a lot faster for the next 100 million.
Third is mobile. In many of Komli’s markets, people may not even see a PC and their entire [computer] life may be through a mobile device. The cost of smartphones in India has significantly decreased.
Last, but not least, the cost of broadband and access to broadband has dramatically changed. So when you think about these fundamental drivers of what I call growth and adoption of the Internet - broadband was another big catalyst in the US of growth, if you recall. When all of these come together, for India, they all began at the same time. This is where we believe the population is going ‑ the amount of percentage of time spent on the Internet if you include mobile is going to significantly increase in the next 12 to 36 months, which is going to mean that marketers are going to be forced to think about significantly allocating their budgets and their mindset on this medium. Komli wants to make every investment possible to be ready and prepared to take advantage of the growth.
Yes, we partner with all of them: OMD, GroupM, IPG and Publicis – all of them. They're all here and similar to the US, if I recall my numbers correctly from the old days, they are driving 70 percent of spends in the digital medium. In the traditional medium, they're a lot bigger than that, but in the digital medium we do have a fairly large direct advertiser base, especially performance‑based advertisers and the online classifieds-type businesses. They, in India at least, tend to go direct. Your Match.com’s of the world, and of India, tend not to work with agencies here. So, I would say that in the digital space, 70 percent of the business comes through agencies and 30 percent direct.
What do you think about the channels that Komli is exploring today? Where is the opportunity, in particular?
So in markets like the US where they're deep and there are so many different segments, you could have 30 mobile players and 20 video providers. We firmly believe that in the markets where we are today, agencies and advertisers are not looking for 20 video networks or video providers and 15 mobile companies coming to them, not even 400 display companies coming to them. They would love to just work with one company that can provide an end-to-end solution, whether it's mobile, video, search and social, too.
What we have done, over the last two to three years, is developed and gathered key capabilities in mobileand have a strong mobile platform. We started off as a display company, and are now investing in developing our DSP platform, which should be ready shortly. We're actually beta testing it as we speak. We're integrating data, both primary and third‑party data, into our platform today. We believe that agencies and advertisers are much more comfortable and excited about wanting to work with one player that can provide to them solutions across digital. It’s not that they have to work with us, but we believe that that's a strong point of advantage since larger markets like Japan or the UK there have specialty mobile agencies and agencies within agencies, for example.
In India, that doesn't exist. For the most part, it's one small team and they're doing everything. If you work with multiple players, you're going to get involved with different formats or different reports. They're all going to be different. It's hard for you to determine what's working, what's not, but we can tell you. If you give us your objective, we will just make sure to optimize to your objective. That's really where we believe we start to differentiate ourselves significantly in the market.
In terms of the way revenue breaks out today, you primarily focus on display, video and social. Is it mostly DR or brand-focused. Can you talk a bit about where that breaks out with Komli and then the market in general?
India is one of the largest DR‑focused markets by share. The only market that has a greater share of DR might be the UK. What's interesting in India is, at some level, even companies like Unilever and P&G are focused on some form of performance. They might want sampling, for example, and build a sampling database. So, they will use our platform to help build a large database of consumers where they can then sell and sample toothpaste, or whatever it may be.
I would say that the way the market breaks up is that 50 percent is search. Of the remaining 50 percent, about 70 percent of that is performance and 30 percent is, call it premium. The premium is video and CPM based buys.
Do you think there is going to be a need for Komli to address brand advertising or brand awareness opportunities? Or is the DR market so big that there's really no reason to?
What we have done is ‑ because we believe that the real growth in this market will come from the large, traditional advertisers - the CPGs, or what we call, in this market, FMCGs, the Nestles and the P&Gs of the world, Unilever being the largest advertiser period. We believe it will also come from autos and some parts of consumer durables, and several other categories. Entertainment is big in India, too.
Some of these categories, in the traditional medium, are brand‑focused. Their largest spend is on theme, for example. They tend to understand, in the traditional sense, how to measure brand lift, brand awareness and brand impact - those brand measures. And, what we have done is created a small division that has access to exclusive premium websites in our offshore network. We've got websites that you will be familiar with, for example, a site called BabyCenter.com. It's a US‑based site, effectively owned by Johnson & Johnson, but super popular with expecting parents. Every CPG, as you can imagine, wants to be there, because they're making important purchase decisions during the pre‑birth and post‑birth times. We have a team that focuses solely on the premium side of the market with these sites.
We think it's important to have "one leg in." Again, one of the unique things about India, is that that's where the marketer is still spending most of their money today is in the traditional medium, and that's one way in which you get to understand their real objective.
You discussed the interest in audience-based buying, the acronyms, etc., earlier. Is there an ad exchange world in India, if you will, or is it effectively an ad network business there? Is there a real‑time bidding (RTB) opportunity?
We certainly think so. We've already launched our RTB platform and, at the last check with Google was only one of two companies across Asia‑Pacific to have integrated with their DoubleClick Ad Exchange and RTB platform. As we speak, we’re integrating our RTB capabilities with all the other SSPs out there, as well as other ad exchanges. In fact, we're in the midst of doing three more integrations now. But, we don't think that RTB, on its own, is sufficient. You've got to bring in intelligence to your bidding strategy, and that intelligence comes from data.
I mentioned that we've already integrated both our primary data as well as our third‑party sources, and we're starting to get a lot smarter about what we should be getting out of something and the probability of us to win the bid. You want to win a bid that you know has demand for it. We believe that this is definitely where the world will go.
Google has some stringent requirements that we had to meet in order to ensure that they would accept our bids such as making sure that it's all happening under a certain latency requirement, for. We have invested in significant infrastructure, and we're just getting started. We do believe, to summarize, that there is going to be this opportunity, but that opportunity is going to be driven, not just by having RTB‑enabled capability, but also smart RTB. You've got to make it intelligent. We think, for us, it's about data and we've already started to integrate that. We are not just talking about it, we're “live.”
What we're focused on in the next 12 to 18 months is doing somewhere between 40 and 50 billion impressions a month distributed across our mobile and core display platform. As a company, we expect that a significant part of our business will get cleared through our RTB platform. We also expect to be the largest independent player in, at a minimum, the markets we are currently in. We are in India, Southeast Asia and Australia.
Four or five years ago, we were probably in the mix of maybe 15 to 20 other ad networks in this market, and probably ranked somewhere around 15 to 20 in terms of size of audience or scope of revenues, etc. Today, we're firmly in the top four in India, and that includes all the big boys. We hope to be a bit higher than that next year.
We also recently acquired the largest independent network in Southeast Asia (AdMax - read the release) with a strong presence across all the markets. What we're going to be doing is bringing our technology capabilities to that market. We think it's a strong win-win proposition.
By John Ebbert