Exclusive | Going the Global way: Tyroo's Siddharth Puri
The share of digital advertising is steadily showing an upward trend. Most surveys and reports suggest that the growth medium will continue for next few years. The increase can also be attributed to the growing demand for domestic ad networks. One of the leading players amongst the plethora of digital ad networks in India is Tyroo.
Siddharth Puri who heads Tyroo as the Business Head of the ad network, has over 10 years of experience in setting up and operating the Internet as a profitable delivery channel for businesses. He has been a part of the Tyroo’s core founding team since its inception. He is primarily responsible for the overall business and strategic leadership of Tyroo Direct including sales, operations, product development & marketing and business development.
Adgully spoke to Siddharth Puri about Tyroo Direct, its audience and the overall ad network scenario in India. Puri has been on board with Tyroo since 2007 and has overseen the key changes that have taken place.
According to Puri, one of the major transformational milestone happened when they realized that display was quite important. Initially the idea was to create display ad network similar to Google which was fundamental to the business. The second reason was Yahoo which came on board to attract the yepme advertisers. Says Puri, “we felt that the market was not ready for yepme ads and our major focus was toward enterprise ads”. The second milestone was about two years back when we decide to restructure our business into two different businesses altogether Tyroo Direct and Tyroo Audience, adds Puri.
A lot of funding was happening around e-commerce and the biggest challenge which ad networks and the display advertising were facing was that they were not able to come on board as an important consumer actuation channel. Since a lot of e-commerce money was coming in, close to Rs 950 crores came in last year, “we saw that as an opportunity and we thought why don’t we create a business which focuses on that opportunity. That was the idea of Tyroo Direct”, says Puri.
Tyroo Audience continued to be a strong media Ad Network display business that kept on growing. Today it has reached around 28 mn unique users that are fairly large as compared to the top 5 properties in India.
Puri said that between 2007-2010 they grew by getting influenced by the market at ad network. Which meant everyone started creating an ad network focused on the advertiser.
When asked about the publisher’s alliance with the advertiser and where he could see the difference he said that “Advertisers understanding of ad networks has evolved and are now they are able to think beyond Google ad network. If Ad Networks RON (Run of Network) is compared apple to apple to correct set of horizontal portal inventory e.g. horizontal portal ROS (Run of site) with same expectation on ad units run, scale of traffic acquired, pacing defined, creative communication and exposure across similar content then Ad Networks will provide same amount of unique user and other performance metric exposure expected by advertisers.”
Advertisers should stop optimizing in silos and start creating metrics which help compare all digital investments apple to apple downstream closed to business goals, then the problem of subjective quality will go away making media more accountable and efficient. “On the other hand if we talk about publishers one needs to understand their ecosystem and make sure how to make that compatible to meet the advertisers need. Hence we are in the business to help publishers make revenue by driving advertiser ROI,” says Siddharth Puri. A publisher comes first then comes the advertiser. Audience focus is on service needs and no one is ready to buy a media placement... Even Google is able to give them only a single digit yield.
Puri says that it is a performance market .He also goes on to say, “when we talk from the agency head to the junior most guys no one today can sit and justify the rates of ad network. We are the people who are under selling the media, when we started to answer how do you determine the correct price and how to look at Ad Network as a channel which competes with horizontals and also with Google search? That is where we can see some science coming in and that was the major switch which we did. We used to put the advertisers first but now we put publishers first. It is like a performance market and we structured our business to look like a value click in the US. Tyroo Direct is a performance place market for us.”
Tyroo Direct is among the top 3 acquisition channel. “Talk to myntra, flipcard, fashion or any of the large e-commerce companies today. That is the scale we are delivering and it is fundamentally transactions driven,” says Puri.
On asking , if Tyroo Direct was growing more than Tyroo Audience he clarified that there was nothing of that sort.. Tyroo Direct started in January 2011 and is fairly a new business. He says that at the end of the day there is enough supply available. Tyroo Direct functions on the cost per transaction. There is no risk there. There are publishers who are ready to work on cost per transaction or performance metrics. The idea was to create the right platform.
On probing if there are risks and the stakes are higher in running a Ad Network, he said, “Ad Networks not necessarily get their due and some times not much fair business happens. The only difference is there is a continuous demand.” Puri said “We have a continuous business, we don’t have to run behind the advertisers, it’s a contract based business. It’s an agreement, 80% of our business is a repeat business.” The channel is trying to build a performance marketing channel. Even in the US there are large businesses which have got created in that channel. When we look at Search, 30% is the Google’s contribution; Facebook is coming up as the second largest customer acquisition channel because of supply available that settles another 15-20%. And then Tyroo is looking at around 10-15%. This results in an overall transaction budget of 60-70%. “That is the overall budget break-up. That is the way we are looking at it,” says Puri
In the whole media plan if one talks of traditional advertisers like FMCG’s, industry advertising is around 15% to 20%. That is an industry average as of today inclusive of the Google ad networks.
When asked as to how they pitch and position themselves thereby giving additional value to themselves Puri said “Tyroo Audience have built their ability on providing large formats which is the one of the biggest pillars of their strength. Tyroo Audience is focusing on the performance metric specifics in the Indian content and integration & placement. The Audience network is trying to organize the differentiation from Tyroo Direct’s perspective. “We have seen a lot of success as one of the top 10 companies. We do not advertise on Google Ad Network because we are clearly able to show the inefficiencies which exists in the Google Ad Network. The growth of our business is purely because of the learning we have given them. We taught them how to look at Google spends.”
To differentiate the advertiser they look at two different advertisers. If Ad Network RON (Run Of Network) is compared apple to apple to correct set of horizontal portal inventory e.g. horizontal portal ROS (Run Of Site) with same expectation on ad units run, scale of traffic acquired, pacing defined, creative communication and exposure across similar content, Ad Networks provides same amount of unique user and other performance metric exposure expected by the advertiser. So actually for them the way they are looking at Ad Networks is that it gives an equal size or even greater reach. Hence they are trying to see if they can reach out to the same scales of audience at the cheaper cost or not. That is the only differentiator they are looking at.
In a media plan typically most of the clients use Google but not necessarily Google alone can deliver. People look at Google as a sales channel and that is a mistake, says Puri . The non-traditional advertiser is looking at the in-trade and e-commerce companies as a digital media. The reason behind AdNetwork’s growth was because of Google pushing advertisers to spend more on Google ad network. This created the impression that Google’s ad network should be evaluated on a similar metric of search hence the expectation got set-off. There is always a pull versus push. According to Puri the reality is that people look at internet or Google as a sales channel. But there is no truth in it. It is a marketing media channel.
The category of clients that uses ad network according to him is growing at a fair pace. The largest FMCG company now in India is spending 25% on ad network of their digital budget, so it is fairly large. And on the other hand e-commerce companies are spending 40% on technology, so they are completely dependent on the sector he says.
Puri says growth in adnetworks in the last 6 months has been good. “Targeted billing at Tyroo in the last calendar year was achieved in the first 6 months, so from a growth perspective there has been no down fall.” He says, “I don’t think the ad network industry will get impacted by the slow down. The number 1, 2 and 3 tier has got established very clearly and being a leader in the market we don’t see any challenge. We will see spends coming to us. As far as performance is concerned our Direct business is doing decently well. We are in a situation where we have more demand than supply. We are growing quite decently even on the Audience side. Because of the slowdown that happened people would want to reach out to Audience at a cheaper cost and ad network has always been cheaper.”
On probing about their foray into the Mobile space Puri Opines “Both our businesses are now independent. The way we look at mobile is that we feel it is just another extension. If you have noticed since last year we have tightened our platform and we feel that our advertising has become more mobile friendly,” he says. The real growth is happening in the mobile sector and in application. Penetration of applications and mobile web will definitely affect them he says.
Does he see any discrepancy? To this he says that the digital ecosytem is much settled now, marketers have understood the domain and the ecosystem; and have their expectations very clearly defined. There is a value creation. This is helping them to grow. He concludes by saying that they are strongly placed and are one of the top five companies in the industry today.
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