Digital advertising on the upswing Business Standard, June 29, 2012 The share of digital advertising in India has been steadily growing. According to the Indian Digital Advertising report, prepared by the Indian Market Research Bureau and the Internet and Mobile Association of India, the Indian digital advertising market this year is estimated at Rs 2,851 crore, compared with Rs 2,277 crore last year. The market is expected to double to about Rs 4,391 crore next year. Thanks to the growing demand for domestic ad networks such as Komli, Tyroo and Tribal Fusion (which buy and sell online space for a host of websites) is growing, despite the presence of Google and Facebook, considered key digital advertising vehicles. Media buyers representing advertisers are increasingly approaching these ad networks in search of the best deals for their clients, and most are not disappointed. These networks have been growing steadily, and are now beginning to attract venture capital (VC) funding. Earlier this year, Komli raised $36 million, led by partners, including Norwest Venture Partners, Nexus Venture Partners, Helion Venture Partners, Draper Fisher Jurvetson and Western Technology Investment. Another ad network, Pubmatic, also raised $45 million earlier this year. And, the buzz is Tyroo is also in talks to raise $10 million from VC funds. Typically, media buyers looking for online space use ad networks as a route to mark the presence of the brands they represent. There are about 10-12 ad networks in India, the popular ones being Komli, Tyroo, Tribal Fusion and Ozone Media. Google’s Adwords, an automated tool that allows a media buyer to directly book space online,

based on his/her requirements, is another prominent ad network. Komli chief executive Prashant Mehta said in the last year, the company’s business grew about 100 per cent in India, though experts say this was also aided by a small base. Mehta declined to specify the company’s revenue. ―Over the past two to three years, we have been growing three to five times. We work with 75 of the top 100 traditional advertisers in India. This shows our penetration in the domestic market,‖ he said. In the last 12-18 months, Komli has focused on a technology platform. Mehta says the firm’s focus on the graphical (display, mobile, video, and social) digital market continues to see quick growth. ―The investment we are carrying out in technology is not only for us. We want our clients to use it, too. We have started real-time bidding. This could be bidding on impression or bidding on multiple pools of inventory across the world,‖ he said. For Tyroo, growth is being driven by the recent boom in the e-commerce segment. ―Today, we have a total of 250 unique advertisers. One of the biggest growth areas for us has been the e-commerce segment. We partner almost all the major e-commerce players in the country and represent almost 10-15 per cent of our client ad spends,‖ said Siddharth Puri, business head, Tyroo Direct. Revenue from the e-commerce segment accounts for 10-15 per cent of the transactions. The total active client base of Tyroo Direct is 122. ―What we bring to the table is end-to-end performance channel management. We drive approximately 4,000 transactions daily to our e-commerce clients,‖ Puri said. Industry experts say while Google has huge presence in search-based ads, other players are attractive when it comes to costs. ―The price difference between Google

August 2012 Contact: india.commerce@international.gc.ca

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and some domestic players, in terms of the cost per click, is as much as 30-40 per cent,‖ said a senior industry executive. However, Tanushree Radhakrishnan, media director, Zed Digital, the digital arm of ZenithOptimedia, said, ―You need time at hand when you are using Google’s Adwords, since you have to operate it on your own. But it is effective, since you are in control of the situation. With the other guys, you are dealing with representatives who would ensure you get what you want.‖ Typically, the issue is the more cost-effective an ad network is, the lower the cost and the better the deal But Arnab Mitra, national director (digital), Starcom Mediavest Group, says in the last few years, there has been a shift from cost to the online presence ad networks can provide. ―Ad units such as banner ads, scrolls, etc, have long been commoditised. Increasingly, advertisers are demanding to know what technological innovation the ad network can bring to the table. That is the key,‖ Mitra said. TCS Insights: There has been a continuous growth in internet usage in urban and rural areas over the years. In India, the trend is truly shifting towards digital platform with several personal mobile devices now available for internet access at affordable prices. Out of the total advertisement budget spend by companies, digital advertisement is getting a larger piece of the pie each year. Canadian companies can take advantage of this emerging digital medium in India with their innovative technological solutions in the display, search, online, and mobile advertising spaces.

JWT picks majority stake in Hungama Digital Business Standard, June 14, 2012 The race to acquire digital assets among ad agencies in India is getting hotter by the day. After Leo Burnett acquired Indigo Consulting in April, JWT has made inroads into the Neeraj Roy-promoted digital major Hungama. The WPP-owned agency has acquired a 51 per cent stake in Hungama Digital Services, which is into digital advertising and promotions marketing. The deal size is estimated to be Rs 25 crore. Hungama Digital Media Entertainment, also known as the Hungama Group, has a turnover of Rs 200 crore. Digital advertising and promotions marketing constitute 15 per cent of the group’s turnover. Mumbai-based Candle Acendo Cap was the advisor to Hungama on the deal. ―Hungama Digital Services is the coming together of two exceptional teams in a globally relevant market. We hope to offer integrated digital and experiential services to our clients and prepare brands to connect, interact and now

transact with their customers,‖ Roy, managing director and CEO of Hungama Digital Media, said. Colvyn Harris, CEO of JWT India, added, ―Digital is our next new frontier. The idea of the partnership is to build a digital offering for our clients, so we can live up to being a single source partner across all their marketing solution needs.‖ Hungama Digital Services would be a part of JWT’s overall digital offering, Harris said. In the past few years, most ad agencies in India have been scrambling to acquire digital assets despite the fact that digital advertising constitutes five per cent of the ad spend in India. Most advertising honchos admit the investment made in digital is for the future, as the penetration of mobile and other digital devices continues to grow. India ranks second after China in terms of mobile phone penetration, with a total user base that exceeds 500 million. By the end of this year, the base is likely to touch 696 million, according to a report by Gartner. Advertisers in categories such as fast moving consumer goods (FMCG) have already begun migrating online in an attempt to catch the attention of consumers there. While FMCG companies have been a tad slower than players in banking & finance, insurance, travel and telecom, who adopted digital advertising early, the former have been devoting their attention to the medium now. Most brand managers in FMCG companies today come up with both online and offline campaigns as part of their integrated marketing plans. It is here that the role of the digital agency becomes critical, say ad experts, since they are specialists in this area. Digital agencies are expected to leverage their core competence and come up with campaigns that stand out of the clutter. The accent of digital campaigns in the past few years has been to not only inform, but also engage. TCS Insights: With 100 million active internet users and more than 850 million mobile phone subscribers, India is at the cusp of a digital revolution. Foreign companies are aggressively moving into the Indian digital space to take advantage of this movement.

Liqvid raises $3 m from SBI's Japan arm Hindu Business Line, August 1, 2012 Integrated eLearning content solutions provider Liqvid on Wednesday said it has raised $3 million from a subsidiary of SBI Holdings, Japan. Liqvid provides English learning and training solutions to individuals and organisations under the brand name

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EnglishEdge offering on personal computers, tablets and handsets. It is a venture launched by key members of egurucool.com, one of India's foremost eLearning brands. The company plans deeper penetration into the school market with EnglishEdge portable language lab. It also plans to expand to colleges because of growing demand. Following this, Brijesh Pande, board member of SBI Ven Capital Singapore, is joining the board of Liqvid, the company said. SBI Holdings is one of the largest private equity firms in Japan with more than $3 billion funds under management. SBI has investments in more than 13 countries across Asia. ―We believe it has wide applicability, not only in India, but in a number of non-native English speaking countries in Asia,‖ he said. TCS Insights: In India, the trend in education has moved significantly from distance learning to e-learning. With the increased usage of Internet in urban and rural areas and favourable demographic profile of the country (50% of Indian population is less than 25 years and India will be one of the youngest nations by 2020), companies targeting e-learning solutions could see interesting growth opportunities.

Mobile VAS company Altruist acquires Sweden’s Teligent TechCircle, July 25, 2012 Chandigarh-based Altruist Group has acquired Sweden’s Teligent Telecom in an all cash transaction, which would help the latter to set up a launch pad into developed markets like Europe and United States. Altruist is picking up ―almost 100 per cent stake‖ in Teligent Telecom, a supplier of infrastructure solutions and value-added services to telecom carriers, its founder and CEO Dheeraj Aggarwal told techcircle. For more details on the deal value and other plans click here. ―With this acquisition, Teligent will serve as the platform for our entry into developed markets as business development from ground zero there (developed markets) is fairly tough. Teligent will start as our footprint in these market and we will look to add more services in those markets,‖ said Aggarwal. While Altruist has presence in Southeast Asia, Middle East and Africa, the transaction will expand its presence in Europe, North Africa and US. Teligent Telecom was formed after a management buy-out of messaging, charging and platform business of Swedish stock exchange-listed Teligent AB. The investors in this buyout included top Ericsson executive

Einar Lindquist, who also led the company as CEO till recently. Aggarwal said that Teligent currently provides mobile VAS services of a traditional nature like voicemail and messaging. Teligent’s clients include leading carriers like BT, Vodafone, Telenor, Maroc Telecom and DTMS. Teligent, which has now become a subsidiary of Altruist, will continue to operate under its own brand name, given its reputation in the market. Altruist Group was formed in 2005 by brothers Dheeraj and Anuj Aggarwal. Altruist is involved in mobile social networking, mobile advertising, rich media content and value-added services for telecoms operator and brands. Altruist has had a fairly aggressive inorganic strategy, with this being its fourth outright acquisition in the last four years. In 2009, Altruist acquired Mumbai based Mobile2Win in a share swap transaction. This was followed in 2011 with the acquisition of web and mobile technology firm RelayStrategy LLC, which builds mobile applications for Android, BlackBerry and iPhone platforms. Altruist also acquired Delhi’s Mobisoft Telesolutions, which runs the website Phoneytunes.com, offering mobile wallpapers and ring tones, in 2011. It also invested seed capital in a Mumbai-based mobile gaming start-up called Vegam, for a minority stake. Altruist competes with various VAS companies in the country such as One97 Communications, Affle, ACL Wireless, IMI Mobile, Indiatimes Mobile, ValueFirst Messaging, Comviva, OnMobile and Spice Digital. TCS Insights: We all know that the Average Revenue Per User (ARPU) is low in the Indian market, even with the incredible growth in new subscriptions per month. As a result, Indian value-added services companies are expanding in other markets to take advantage of high revenue models. This article gives an example of an Indian ICT company going global even if opportunities are still strong in the domestic market.

InMobi acquires UK-based Metaflow Solutions Economic Times, July 31, 2012 InMobi has acquired UK-based Metaflow Solutions for an undisclosed sum, the Bangalore and San Francisco-based mobile advertising network announced on Tuesday. The latest acquisition comes less than a month after InMobi bought over San Francisco-based MMTG Labs. The financial details of both transactions are yet to be disclosed by the parties involved.

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"Our acquisition of Metaflow Solutions will help us to continue to rapidly expand the distribution and monetisation of content for our developers and publisher partners," Naveen Tewari, founder and chief executive, InMobi, said in a press statement. Metaflow, a mobile app management and distribution company, will see its entire team absorbed by InMobi, and will become an integral part of InMobi's developer-oriented efforts, led by Piyush Shah, vice-president and general manager, developer platforms and performance advertising, according to the press release. "With the recent acquisition of MMTG Labs, along with today's acquisition of Metaflow, we will augment our value proposition by offering highly compelling distribution, monetisation, and engagement solutions to app developers globally," Shah said. The latest deal is further affirmation of InMobi's strategy of growing through the inorganic route, as it looks to unseat global leaders Google and Apple in the $6 billion global mobile advertising industry. The company has been intensifying its efforts to capture a greater share of the lucrative North American market, which contributes almost a quarter of the global market share. It estimates that it reaches about 500 million consumers, in over 165 countries, through more than 93.4 billion mobile ad impressions monthly. InMobi has significantly ramped up its acquisition activity, after Japanese telecom company SoftBank invested $200 million in September 2011, and what is still regarded as one of the largest investment in the mobile internet space till date. The investment - which was paid out in two tranches - has played a significant role in bulking up InMobi's war chest as it scouts for companies to add to its portfolio. Other backers of the start-up include venture capital firms Kleiner Perkins Caulfield Byers and Sherpalo Ventures, both of which have invested $15.6 million across three rounds of funding, prior to the SoftBank investment. TCS Insights: Recent acquisitions by InMobi demonstrate strong growth in the mobile ad market. Indian companies are strengthening their product portfolio with app management offerings and distribution tools. Canadian companies in mobile advertising, Internet and app development can take advantage of these opportunities.

Vodafone partners with Vserv for app monetisation TechCircle, July 26, 2012 Mumbai-based mobile advertising network Vserv.mobi has entered into a partnership with telecom operator

Vodafone for monetisation of the apps offered by the telco via its app store, VStore. The partnership will enable developers targeting app distribution through the VStore to monetise their apps with the help of Vserv’s app monetisation platform AppWrapper, the company said in a release. Binay Tiwari, head of marketing, Vserv.mobi, said, ―Advertising combined with micro transaction based pricing models are ideal for targeting the vast majority of prepaid mobile users in emerging markets. AppWrapper enables this in just one click.‖ AppWrapper platform offers developers free as well as paid app monetisation models, across both smart phones and feature phones without any coding effort. The paid models include Try & Buy which allows users free usage of the app and have to pay if they want to use it further; Pay per Play, through which users have to pay every time they want to use the app; and Subscriptions– users can opt for monthly, weekly subscriptions, depending on what the developer offers. Vserv has applied for a patent for AppWrapper, which allows developers to connect into any billing mechanism — be it direct telco billing from mobile operators like Vodafone or app stores like Nokia and the Android market, Google Play store. Vserv Digital Services Pvt Ltd was founded by Dippak Khurana and Ashay Padwal in January 2010. The company had earlier raised $3 million in series A funding from IDG Ventures. Prior to that, Ajay Adiseshann, founder and managing director of the mobile payment company PayMate had also invested an undisclosed amount in Vserv. The company claims to have more than 10,000 apps listed across Android, WP7 and J2ME platforms from developers such as Glu Mobile, Digital Chocolate, Indiagames (now part of Disney), Nazara, Jump Games, among others, while 150 advertisers are advertising and around 8,000 publishers are connected to the network. The Mumbai-headquartered company has offices in Delhi and London and it plans to open one in Singapore soon and later in the Middle East and Africa. To know more about the co, read here. The company competes with the likes of InMobi (raised $200 million from Japan’s Softbank at a rumoured $900 million valuation) and Admob (acquired by Google a few years ago for $750 million). InMobi had recently struck a deal with Cricbuzz, a leading cricket property that provides information on scores, news, match schedules and ball-to-ball commentary, for monetising mobile ads on Cricbuzz’s mobile site and apps for the Indian market. TCS Insights: The monetisation model for apps developers in India is changing. Mobile advertising network companies are partnering with carriers to provide billing solutions – this will help app developers

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to scale up their offerings. There are huge opportunities for Canadian companies in app development in this market.