Making the cookie crumble differently
Source: Business Standard| View Online Article
Hitesh Chawla from Fazilka, Punjab, hadn’t heard of Indian Institute of Technology, Delhi, the technology school he graduated from, till he was 15. Now, his start-up, SilverPush, is pushing back the frontiers of technology.
The company has just won a round of funding from Dave McClure’s 500 Startups, after being nurtured under the wing of Rajesh Sawhney-backed GSF Accelerator with Siddharth Puri of Tyroo as angel investor.
On being a successful applicant to GSF, Chawla, 30, says, “I wasn’t really expecting I would get in, though I hadn’t given up on the entrepreneurship dream.”
SilverPush is one of the many companies trying to perfect the technology of mobile ad re-targeting and among the 50 companies the world over that are known for cross-device re-targeting. “Expect mobile re-targeting to be the next big space for innovation, investment, and acquisitions,” said an October piece on AOL-owned technology news website TechCrunch. Forbes listed ad retargeting in the top seven online marketing trends for 2014.
For most advertisers, re-targeting is the Holy Grail, and mobile is the road to it.
Demystifying ad re-targeting
If you search for shoes on Snapdeal, leave the site without a transaction and then log on to Facebook to view a friend’s latest display picture, chances are the picture will be followed by a shoe advertisement, as you scroll down. This concept draws more customers and accounts for more sales than banner advertisements on websites, which is why companies and brands are increasingly focusing on retargeting.
Large companies such as Drawbridge and Tapad, with revenue run rate of $20 million and sales of $100 million, respectively, are the big fish of cross-device ad retargeting, following consumers as they move from desktops to tablets to phones. This is done by dropping a cookie on a website a consumer has visited and matching these cookies. The Wall Street Journal describes cookies as tiny pieces of code that marketers deploy on web browsers to track people’s online movements, serve targeted advertising and amass valuable user profiles.
The problem becomes more complex in trying to track consumers on mobiles, as these devices don’t accept cookies. Increasingly, though, it will be important for brands to have a mobile strategy, as Indian users increasingly access internet through smartphones. About 20 per cent of online transactions are through smartphones.
This is the technology SilverPush is trying to sharpen – tracking users as they move from browser to app on mobile.
No clear answers
“You’ve heard the phrase ‘it’s not rocket science’. Well, this is rocket science,” says a senior marketing executive of a mobile phone company, requesting anonymity as he isn’t authorised to talk to the media.
Since cookies do not exist in mobile retargeting, everyone’s fishing for a way out. Social networking giant Facebook launched its own mobile retargeting last month, a year after launching its ad exchange.
On SilverPush, Alok Mittal, a venture capitalist who has invested in location-based mobile advertising company AdNear, says, “In mobile, there are no cookies. So, I am curious. Expenditure will shift to the mobile advertising area, as mobiles are available to 600-800 million. The Indian market, however, is still very slow.”
SilverPush founders say they identify a smartphone device (read user) through 50 parameters, based on data collected through ad exchanges, app owners and advertisers. This data is crunched to arrive at a smartphone’s profile. “We sanitise the data; we segment it,” says co-founder Mudit Seth, 27. “We come out with the intent of the user, based on which we come out with user behaviour.”
So, a person who browses photography sites will be shown camera advertisements on games she plays.
SilverPush claims to have profiled 80 million devices in India, virtually most of 3G/4G users, which mobile marketing resource site mobithinking.com pegged at 88.5 million, based on the Telecom Regulatory Authority of India statistics. “We have collected this data in the last six months,” says Seth.
Though feature phones outsell smartphones globally, the trend is expected to change by 2016.
The ad exchanges SilverPush works with – Smaato, PubMatic, MoPub (being bought by Twitter) and AdIquity – also have ad inventory from publishers or app owners such as Facebook and Angry Birds. SilverPush bids for this ad inventory through the exchanges. The cost of the ad depends on the popularity of the publisher; displaying an ad on Facebook is among the costliest.
“We process a billion ad requests a day for India alone; now, we are starting in the US as well,” says Chawla. The company’s clients have included Myntra, Jabong, Dominos, Airtel, Paytm, Firstcry and Samsung.
For Seth and Chawla, SilverPush is the second entrepreneurial venture. Earlier, they partnered an outdoor advertising company that failed to take off, as the two found the business non-transparent.
Now, both are excited about innovations in the mobile space. “In (every) six months, everything changes,” says Seth. The two say their company is expanding its reach by working with ad agencies such as ad2c and Madhouse, which provide it work instead of going to clients directly.
Chawla says the company is rejecting buyout offers. “(The offers are) very enticing personally, a million-plus dollars in cash,” say Chawla and Seth, almost in unison, seeming excited as they play with their mobiles in the cafeteria of their Gurgaon office.
For SilverPush, the big guns of internet are likely to pose the biggest challenge. Google, Facebook and Microsoft are developing systems to bypass software companies that place cookies on websites and develop data mining abilities on their own.
Microsoft has announced it will give marketers the ability to track and advertise to people who use apps on its Windows 8 and 8.1 operating systems on tablets and PCs. The company will do this by assigning each user a number – a unique identifier – that monitors them across all their apps.
Google’s plans, which the company disclosed only in broad terms, would also use a unique identifier.
Facebook’s new ad service, launched in October, got around traditional third-party advertising cookies by doing the tracking on its own, said the Wall Street Journal. When a person visits a website selling shoes on a work PC, a piece of Facebook code placed on that site – Facebook’s own cookie – recognises the person has logged on to Facebook using that browser earlier. The shoe seller can then send the person an ad for the product on the Facebook mobile app, even if that person never registered with the shoe seller.
If you understand the online world, the world of desktop web, cookies are the secret sauce to everything cool that can be achieved through online advertising. Websites put cookies on you when you visit their pages, and these can do wonders when it comes to targeting.
On the browser-led internet, cookies for all browsers are common. Google will look at your cookie from a previous visit to a news site and show you an ad with a, say, Newsweek subscription. Naaptol will study your browsing habits, and if you are identified as, say, a woman, offer you cutlery deals.
The web is the only medium able to segment consumers by their behaviour, and allows advertisers to target customers. On billboards or TV, behavioural targeting isn’t possible.
Mobile phones, however, don’t store cookies; you need another identifier. For smartphones, while Android has its own ID, iOS (Apple’s operating system) has not settled on a particular ID and so, everyone’s struggling there. Luckily, most smartphones in the Asia-Pacific have Android operating systems.
That’s what SilverPush has done – it has developed the ability to identify Android users. By identifying the sites you have visited, they can segment you in terms of female, age group, sport lover, etc. Because they have been able to identify Android users, they are going to advertisers.
For instance, when Gillette brings out a ladies’ razor, SilverPush can say “through my technology, I can identify five million women users and re-target them for you”. So, instead of Rs 2 a click for a generic ad campaign, Gillette may be happier paying double for reaching a targeted audience for better conversions.
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Amit Bhartiya is former managing director, Komli Mobile, an independent mobile ad network