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OOH Interviews

Mr. Rajan Mehta

Founder and CEO | 26 Jul 2010

“The industry has evolved over the last four years. When we started, we believed we were the first ones. Within six months we saw 25 players in the market. And that was not surprising because people predictably thought it was easy business. It was a good time for investments as well, compared to today’s market. Then came the recession and that separated the men from the boys.”

Rajan Mehta founded LiveMedia, India’s largest digital destination media company, in July, 2006. The company has a national presence and a current employee strength of over 100. It has successfully raised two rounds of funding with Draper Fisher Jurvetson, Bay Partners and Samsung International and has also recently taken a majority equity stake in one of its competitors –Tag Media.

His last assignment was as Vice-President and Member of the Board of Directors for India of Nortel Networks. He looked after the Service Provider Segment for all of Nortel’s carrier products (wireless, GSM, CDMA, Optical, Data and Switching) in India. As a part of his responsibilities, he managed a high performance team focused on service providers – including landline, wireless, long distance, ISPs, infrastructure providers and utilities.

Earlier, in Nortel, Mehta held positions as diverse as Executive Assistant to the President for Asia-Pacific and Director-Business Development for India. Prior to joining Nortel Networks, Mehta worked for companies such as Motorola, Ascom, Crompton Greaves, and Pertech Computers. Mehta is an alumnus of the Indian Institute of Foreign Trade, New Delhi and the Punjab Engineering College, Chandigarh

LiveMedia is a young start-up company funded by Draper Fisher Jurvetson, Bay Partners and Samsung International. LiveMedia has pioneered the concept of digital destination media, also known as “captive audience networks,” in India. Through this platform, it has created an alternate channel for communication for reaching out to customer segments that are thin users of traditional media and are otherwise difficult to reach.

Q. How did the idea of LiveMedia come about? How has the journey been since its inception in 2006?

We started operations four years back. I spent 18 years in telecom and then decided to be an entrepreneur. I don’t come from media background but had some observations of its industry. One of the observations was that if you look at traditional media like TV, print and also radio to an extent, all of them are designed for consumption at home. But what has happened over the last decade- is that lifestyles are experiencing gradual shifts towards spending less and less time at home and more outside. These destinations can be offices, clubs, gyms, restaurants, salons, etc. The premise that we worked on was that people have moved out to their destinations and traditional media is still focusing on in-house advertising then some part of advertising must move out with them to their destinations. On one of my travels I came across a synopsis of a research paper from Carnegie Mellon; it was a research project on internal communication in large organizations. It stated was that all the traditional methods of communicating with people were losing their sheen because of their size. The conclusion of the study was that if the communication is predictable then the receptivity drop. They came up with a solution that if companies mixed their internal communication with something those workers would like to see and something that is unpredictable- communication would work. This gave strength to my idea and we started off.

Q. What is your current market-share and territory wise which are your strong and weak areas?

The industry has evolved over the last four years. When we started, we believed we were the first ones. Within six months we saw 25 players in the market. And that was not surprising because people predictably thought it was easy business. It was a good time for investments as well, compared to today’s market. Then came the recession and that separated the men from the boys. Out of the players that remained, there were four that needed a mention, as each has a special positioning. Live Media has approximately 5000 screens at about 2400 locations. These span over about 70 cities. We are positioned as a captive audience network and that means that you will see LiveMedia only in places where people go and sit and spend an average of 30 minutes. We have screens predominantly in the hospitality sector and corporate that includes BPOs and high-end corporate offices. Next in line is the personal care category, which includes gyms and salons. And lastly, we have healthcare. We also do a little bit of specialized retail. For example, for rural retail we have tied Hariyali of DCM group and ITC Chaupal Sagar. About the competition, there is a company called OOH. I believe they have about 3200 screens covering about 600 locations and majority of their screens are in malls and elevator lobbies. They are addressing the segment of people who are in transit. Third is a company called Tag Media. They have about 2000 plus screens, of which half are their own and the rest they have rights for Future Media of Future Group. They are focused on modern retail like Spencer’s. Now, we are the largest stakeholders in Tag Media. Fourth is a company called GSM. They are in McDonald’s in the west and in the south and they do some railway stations as well. They have around 500 screens and about 200 destinations. If you see a total, there will be around 11000 screens in the market, out of which LiveMedia has 5000. In terms of locations we have about 75% market share.

Q. Since the reach of this form of advertising is deep and you can really target audiences segmented on the basis of age, sex, income bracket, etc. then is the content for screens at, for example, McDonald’s and a healthcare centre different?

That will be a point of arrival for us, when we have surrogate channels targeted at different audiences. But today 80 – 90 per cent content will stay the same and only 10-20 per cent will change. For example in corporate one will see more of business humour. We have a tie-up with Randy Glasbergen who specializes in this kind of humour. In healthcare we make sure we air more of Health Live.

Q. Since the age group that you target is 15+, what are the types of companies that typically advertise with you?

So far we have had 210 brands advertise with us in the 196 weeks that we have been operational. Out of these 35-80 per cent are repeat customers. We see a whole gamut of advertisers. One of our biggest segments is Media itself. Most of the TV channels advertise with us. So do radio channels and press. It is interesting since TV is competing media and they advertise with us. Automobiles and lifestyle companies advertise with us as well, as do banks and finance companies. We have had FMCGs also as our clients, like- ITC personal care products, P&G, and various others. FMCGs in mass are yet to embrace our medium. The feeling that I got, was they thought we were too small to be considered seriously. But that is changing, between the four major players we can reach 150-200 million people in a month.

Q. What percentage does OOH make of a typical advertising budget? It still is quite small compared to traditional media like print and television, so how do you think the market will be in future for OOH?

It is not more than 0.5 per cent of the total media spend right now. But it is growing because it was zero four years back. It has challenges, but it is gaining ground. Another thing is that people are spending lesser time than ever before at home.

There are four different channels that I see. One is that we need to grow our network and it needs to be relevant. Secondly, content wise we need to be even more engaging. And we are constantly doing that by doing customer service, talking to people. Thirdly, the medium will become interactive when we take it online. So when one is sitting in front of your computer and seeing a product or a service, one can communicate with it through one’s phone. That is being worked upon and in a not too distant future, it will materialize. Lastly, we must create a reverse cycle for measurement and monitoring. All these things when put together will see an inflection point. Industry, since we started operations in October 2006, has grown to be a 50 Crore worth industry. If you track any other new medium for its first four years than we will not be second.

Q. Can you name a few innovations that you have done for your clients?

Lot of times, what we do is- develop content based on themes for products of our customers. There are financial services groups and they wanted to educate the viewers on finance. We developed a programme called ‘It’s all about money, honey!’. This is animated and gives financial tips. Content changes on a weekly basis. We did another innovation for one of our telecom clients. We have a horoscope programme and when a viewer sees the programme it flashes the name of an astrologer whom they can call right away. We did another innovation for one of our insurance clients. They did something around new year’s and we put up posters in BPOs and invited people to write their resolutions on them. This showcased tremendous involvement.

Q. What was the impact of the economic slowdown last year on your company? How has the scenario been since the start of this financial year?

We are recording more than 100 per cent growth compared to last year. Targets are always evolving because as we keep growing the network as the targets change.

Q. What are your revenues targets for 2010-2011? What are the new territories that you plan to break into?

As a policy we do not publicise our financial figures. However, we are growing by over 100 per cent compared to our last year’s numbers. We are continuing to expand both horizontally into newer cities and towns and also vertically into newer sectors like educational institutes, golf courses etc wherein we are putting up our screens in their cafeterias, coffee shops etc.

Q. Who are Live Media’s direct competitors? What is it that LiveMedia is doing more or differently to stay ahead of its competition?

Our direct competitors would be companies like OOH and we have built some clear differentiators to ensure that we stay ahead – these differentiators are :

• Captivity – Since we install our screens mainly in places where people go and sit for an average of 30 minutes, the observation and absorption level of any messaging on our screens is much higher.

• Content – We devote 50 per cent of the time towards content and are currently running 15 different branded programs, each of which are well researched and targeted to the profile of people in the locations where we are present. Our content creates engagement, thereby making the advertising more impactful.

• Classification – We are now over 4 times the size of our nearest competitor, in terms of the number of locations we cover and this gives us the ability to offer a critical mass in terms of audience reach in any of the sectors to our advertisers. This helps advertisers to precisely target their potential customers.

Q. How is the OOH market in India compared to foreign, more mature, markets?

As a part of the shift from the conventional towards new media, the OOH market is growing simultaneously in many foreign markets. We see the same trend in India although the shift is slightly slower.

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