Managing Director | 09 Feb 2009
"Print and other mediums as a percentage are loosing share to the online media, though they are all growing but, as the market expands the increase has taken up more by online than by any other traditional forms of mass communications."
Naren Nachiappan, Managing Director, Jivox India comes to Jivox from Wind River (NASDAQ:WIND), where he was Vice President and General Manager, he was a part of the executive team responsible for reigniting growth and adding over $100 million to the top line in three years. Naren was directly responsible for taking the Device Management business from a concept to a multimillion-dollar revenue rate in under nine quarters. At Wind River, Naren established the company’s first product development team in Bangalore, India, with a zero percent attrition rate through his three-year tenure.
Earlier in his career, as CEO of Proceler and as Senior VP at VenturCom (acquired by Citrix), he was responsible for pioneering several industry innovations such as “the first support for automated application acceleration using hybrid SoCs” which resulted in Proceler’s nomination for the 2001 MPR Analysts choice award, and the first flight-essential certified UNIX for avionics applications on the Boeing 777.
Naren graduated from Harvard University and holds an MBA from the UC Berkeley Haas School of Business
In conversation with Robin Thomas
Q. You began the Indian operations in Bangalore and now Delhi since March 2008, how has the journey been so far? How have things changed?
Ten or fifteen years ago when people were thinking of technological markets India was seen probably a decade behind. Ten or fifteen years ago if there was an innovation in the US it would have taken probably five to ten years longer before it would appear on the store shelves here in India. Today, that’s changing, for instance the iPhone, is already here. So, the barrier for India being part of the technological landscape has really come down. Since we are headquartered in California and while we have caught some early trends in the United States we find that India is very close behind. People are beginning to look at videos as the right form to express their brand. The gap that we see in the California and in the United States of America and what we see today in Bangalore and Mumbai has become narrow. You have advertisers here who are thinking in exactly the same terms as the advertisers in the California. We are thinking about how to get the message of the brand across, how to get the brand recall and how to get the positive impression about the brand and they all feel that videos give a user much more of that capability along with a much better text and that’s the single more important message we are giving to our customers. Online video advertising is not very different in India, its happening right now it also helps in giving an emotional appeal to the brand which no other medium can do better. It’s been a great journey for us, infact our journey happened to be faster than we had anticipated.
Q. What is the market share of online video advertising in India?
Currently the total share of video advertising in India is low. In India the total market share of online media around 400 to 500 crore, a part of that is search, so a chunk of that market is the search market, the other is display where you go to a website and see the advertisements along with the content and of that display portion is video. There isn’t any research available for the percentage of the online video market share in India, however the market share is definitely smaller than that in the US, but the growth rate of the this medium is the certainly higher than the United States. Therefore the slice of online video advertising is also growing.
Q. Could you elaborate on the online video advertising particularly in the time of global financial crisis?
Print and other mediums as a percentage are loosing share to the online media, though they are all growing but, as the market expands the increase has taken up more by online than by any other traditional forms of mass communications. There are several reasons for this, as more and more people are spending more time online, the average young adult get their news, entertainment and even their shopping done from the online medium which has seen a sharp rise. The other reason is that the online media is measurable, we can tell our customers exactly how many viewers watched our videos, and we can also say how many of the users have clicked on them and got to their website, we can also say how many minutes or seconds they have watched a video ad so, this type of very detailed information is already available for online advertisers. We can also customise the advertisement in the online world where it is possible for us to know that a customer is on the website and even though you are coming on the same website you can possibly watch two different advertisements and that is not possible with any other communication so far except for online.
Q. How different are the western market in comparison to the Indian market?
There are only few things that we are doing different here in India as this is an era of convergence so it’s not that different. However the few differentiations that we are working on are- if people come to a website with a relatively low banquet connection, we want to make sure that they still have a good user experience. For instance the size of the video advertisements and the way we would be stream it on the publishers site is potentially a little different in India with some of the sites than it might be in the United States where you might have a larger video home. Secondly, some of the contents are probably a little more Indian oriented; we are adding a very local specific content. So, if you are trying to do a video of a restaurant you would probably like to have an Indian environment or an Indian background in your bill board image all of them a slight different when compared to the two markets but, by an large it’s the same.
Q. On paid advertisements in the online medium
It’s been several months now since paid advertisements have begun and this is precisely one of the few reasons why it has been a great journey for us. I think the market is ready and we also have the technology for paid advertisements and its happening right now.
Q. Who are your target audience?
The internet would be a great place to go to if you are targeting the age group of 18 to 40 or even 45. It’s not just the young, even the older and more mature audiences are also coming online, however it is definitely the young audience you will find online. No matter whom your target audience is every one is spending quite a lot of time online.
Q. What is the overall market size of online video advertising in India?
The overall market size which is around 500 crores and of this 250 crores is search, however of the remaining 250 crores how much is video advertising and text there is no public statistics as of now, if you look at the US online video advertising would be 10 to 30 per cent. In India online video advertising would be probably less than 10 per cent.
Q. Few years down the line where do you see online advertising?
Online advertising as a whole is certainly increasing and within the online advertising, video advertising is the fast growing segment. Five years ago, the number of searches far exceeded videos watched which represented only a small fraction. In the next three months the expectations are that the number of videos watched per day is to exceed the number of searches online. In other words the online video space is attracting more eye balls than the searches and that’s where a marketer would want to go to because that’s where more eye balls are.
Q. Are you‘ll also into regional advertising?
Yes, we are into regional advertising too, for one particular matrimonial customer we had Tamil ads that would show up when it went to Tamil oriented site and then we had more of a national advertisement that was in English that would show up regardless of what site it went to so, the regionalisation is already happening and there will be more of them happening. This is the power of the medium where everybody can have a personalised and customised which you can’t do with a mass broadcast medium.
Q. Are you looking forward to venture into tier II and tier III cities of India?
Yes it’s already happening but, it will further spread only when these cities will go online in large numbers there will be more viewers coming from those cities coming to the same publishers sites and as natural consequences we will be there.
Q. In your opinion what is the future of online video advertising and the digital medium in India?
The future is great and it has no direction to go but up. India as a country is becoming more digitally oriented and people are beginning to realise that digital interaction with their customers whether it is Kiosk, home PC, mobile or any purposes people are going online and that’s where your customers are and that’s where the future is.