Jivox's video advtg platform available for licensing in APAC region

 Jivox will now focus more on evolving the technology behind their video advertising platform and licensing the platform to publishers.

e4m by Sai Prasanna
Updated: Nov 28, 2011 4:50 PM
Jivox's video advtg platform available for licensing in APAC region

 Jivox, a multi-screen interactive video advertising technology company, has announced the availability of its interactive video advertising platform for licensing by publishers and digital content owners in the APAC region.

Around two months back, the company had entered into a partnership with Komli Media, the premier ad network in the APAC region. As a result of the partnership, Jivox will now focus more on evolving the technology behind their video advertising platform and licensing the platform to publishers.

Naren Nachiappan, Managing Director, Jivox, elaborated on the reasons behind the move. He said, “As a business, our value is directly correlated to the value we provide to our customers. The Jivox platform technology is going to enable publishers and content owners to get the most revenue out of their content. The more revenue they get, the more license fees flows back to us. In a technology business such as ours, you are only representing your technology so, 100 per cent of that revenue comes to us. It is a high profit, high margin business.”

Growth strategy
The company recently received funding of $8.2 million. Nachiappan shared the growth strategy and how the funding is to be used. “A big chunk of our investment will be in technology and that, we think, will fuel growth. At least 50 per cent or more will go into expanding our technology platform capabilities. Almost 90 per cent of the investments in R&D will be in India since we are building the product here. Analytics is an area that we will be focusing on – we already have BrandGage, but it will get much more sophisticated and the types of data it can track will be more detailed. More engaging ad units, support for all the new video enabled tablets and smartphones, and interactive TV support are other important areas of investment for us. In addition to enhancing our platform we are also expanding sales channels across North America and APAC.”

Jivox has a significant presence in North America with their own direct sales team and has customers such as Bloomberg Businessweek, Gannett Corporation (which publishes USA Today), Hearst Corporation (publisher of Cosmopolitan magazine, among others), and CBS. Their market share in terms of platform sales is over 30 per cent in North America.

In India, Jivox commands a 70 per cent market share, with a growth rate of approximately 200-300 per cent CAGR over the last three years. Last year, the online advertising market in India stood at $250 million, growing at 30-40 per cent year-on-year. Out of this, 50 per cent can be attributed to display advertising and 50 per cent to search advertising. In the display advertising space, the video advertising market was worth approximately $30 million last year, and doubling on a yearly basis.

Microsoft, Unilever, Samsung, Nokia, Mahindra & Mahindra, and Vodafone are some of Jivox’s clients, the media business of which will now be handled by Komli Media. The major concentration of the client base is in sectors such as Tech (20 per cent), FMCG (20 per cent), Telecom (15 per cent), and Auto (10 per cent) companies, with the remaining 35 per cent spread across miscellaneous sectors such as infrastructure, education, travel, and women and children oriented products.

Sharing his views on the key growth drivers for Jivox, Nachiappan said, “The primary growth driver is the proliferation and adoption of video across devices. The consumption of video has significantly risen over the last 2-3 years. People are watching video, live cricket streams, etc., on Smartphones, iPads, and iPhones. Another driver is the awareness amongst major advertisers that online video is a powerful medium for communication as they are realising that more of the mindshare of the public can be captured via video. Some examples are Unilever and Microsoft. Unilever started working with us a few years ago and every year they have come out with more campaigns and higher spends towards online video advertising. Microsoft has done more than 15 campaigns with us, each campaign larger than the last.”

Yet another driver is the higher engagement rates for video versus other online media. Clickthrough rates, which is a measure of how effective an ad is, is about 10 times more for video than for display ads. The probability of clicking a static banner or a text link is about one-tenth the probability of clicking a video ad. This is also one of the reasons why clients’ perception towards video advertising has changed.”

Evolution of video advertising in India
Speaking on the evolution of video advertising in India, Nachiappan remarked, “Right now, we are in the third generation of video advertising. The first generation was what we call pre-roll. When you click on a content or news clip, just before the clip plays, there will be a 20-second video ad. There was no interaction. The second generation was interactive video ads which we pioneered in India. Our third generation is multi-screen, where the advertiser creates just one ad and our technology platform will deploy it across all devices. But, it will be tailored for that device. For instance, Android supports Flash video formats, but the iPad doesn’t and their sizes also differ. So, all of those are automatically handled by the platform and the advertiser will regularly receive reports on how the ads were received, across which platform, etc. A year and half ago, you would have to go to different vendors for video ads for mobile devices and web advertising.”

The company has seen an expansion in terms of size of budgets that existing clients are spending and the total number of clients. Average campaign spends in 2007-08 was about 1.5-2 lakh. Now, they regularly run campaigns where the average spend is around Rs 10-15 lakh. Adoption has taken place across all sectors – what started with Tech has now expanded to include the Auto, FMCG, Telco to Infrastructure sectors. They are now targeting major media companies in the APAC region.

According to Nachiappan, video was a great mechanism for branding because people remembered the product, brand; they understood its value proposition and interacted with the ad. When they decide to purchase and execute a search on Google, if that brand shows up in the results, then it is more likely that the consumer will convert to that brand because the awareness is already there.

“Many people say that conversion in Google for search-related advertising is higher, which is true, but the conversion will not occur unless the customer already has a favourable view of the brand. Video is focused on the front end of the marketing funnel, where we are creating brand awareness, telling them how to engage with the brand, enables brand recall, and a very positive view of the brand is created. So, that is our principal focus,” he added.

A key reason for Jivox entering this market is because they feel that publishers need a way to monetise their inventory and generate the high rates that interactive video can offer, in contrast to the steadily decreasing rates that banner ads command. Also, a publisher does not necessarily have to have video content; they can run an in-banner video ad if they don’t have video content.

For example, if a newspaper is online and does not have any offline TV content, they can still run video ads on the text page with the Jivox platform. The Jivox platform allows clients to create video ads by themselves, where they have the option of using multiple creatives, putting them up across different sites, and gauging their effectiveness or also using a single creative and making several versions with slight changes and tracking the response to it. Nachiappan concluded, “The permutations and combinations of video ads that can be created with the Jivox platform are infinite.”

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