Mobile advertising technology company Applift India Technologies Pvt Ltd, part of the Berlin-based Hitfox Group, is building new programmatic advertising tools for its internet-based clients. The Bangalore-based company is developing a new tool called 'Dynamic creative testing'.
Based on the tags/labels, the tool will generate a creative for advertisers, who want to advertise through programmatic buying. The new tool has been developed at the Applift laboratory in San Francisco.
"Creatives have been under-valued in case of programmatic advertising. The tool helps in generating a graphic based on the need of an advertiser," says Rohan Patil, managing director, Applift India.
In programmatic advertising, artificial intelligence (AI) and real-time bidding (RTB) are used to buy online advertising inventory including display, social media advertising, mobile and video campaigns.
Patil adds that with performance oriented advertising gaining traction in India, it's a matter of time before programmatic advertising becomes the next big wave in the online advertising world.
"By the third and fourth quarter of FY 16, programmatic will become part of mainstream digital advertising," he explains. AppLift's key clients include Flipkart, Myntra and Practo.
The Indian advertising industry is projected to grow 16.8 per cent to reach Rs 51,365 crore in 2016, as per the annual Pitch Madison Media Advertising Outlook (PMAO) for 2016. This is a growth of Rs 7,300 crore over last year. In 2015, the industry grew by 17.6 per cent, exceeding mid-year projections of 13.8 per cent.
The report further states that digital advertising will grow by 30 per cent in 2016.
While ad spends on search is likely to stabilise and desktop display would see a drop, programmatic advertising, which saw some traction in 2015, is expected to see growth in 2016, as per the report.
The business modelAs of now, a major chunk of Applift's revenue comes from non-programmatic buying, mainly mobile application downloads. For example, in case of internet companies, every time a consumer downloads any one of the apps, the company pays Applift a certain amount of money.
The firm, which follows a cost per installation (CPI) based business model, claims to earn 60-80 cents for download of an app on an Android mobile phone and more than one dollar in case of iPhones.
It claims to be clocking 15,000-20,000 app downloads for each of its clients every day.
"Instead of focusing on increasing the number of app downloads, we would like to increase the number of repeat purchase or usage of an app," explains Patil.
In case of its re-targeting business, the company claims to earn 15-20 per cent margin from online companies which use its tools for push marketing. In push marketing, e-commerce platforms push promotions and discounts through the mobile apps.
While there is no immediate plans to raise fresh funds or acquire a new firm, Patil says the company will be expanding its team of 80 people to 120 by December this year. Last year, it had acquired BidStalk, a self-service platform that allows advertisers to buy ad inventory in real time.