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Hot Seat

‘Sports channels next big step for geo-targeted advertising’

Bengaluru-based media and ad tech company Amagi Media Labs is on an aggressive growth path. Flush with funds from Series D fund raising round led by KKR-backed Emerald Media and PremjiInvest, the company, founded by Baskar Subramanian, KA Srinivasan and Srividhya Srinivasan, is eyeing 2X growth in FY18.

The company’s core geo-targeting advertising business is growing with new channels joining in. The advertiser base is also growing. The media technology business has given the company international fame with big names like Turner, Bloomberg and Vice using the company’s cloud-based technology to launch their channels globally. It is also looking to expand its data-driven media planning and buying platform Amagi Mix.

TelevisionPost.com’s Javed Farooqui caught up with Amagi co-founder Baskar Subramanian to know more about the company’s journey so far and the growth plans ahead.

From geo-targeted advertising to media distribution technology, how has the journey been for Amagi?

Amagi started with geo-targeted advertising on TV; however, in the last few years, we have morphed into a media tech company. We are looking to create solutions for the media industry using technology as a value proposition.

As part of that journey, we looked at the broadcasting worldwide and one of the things that came out is that a lot of TV channels are looking to go across the globe and ROIs are getting challenged due to the emergence of new distribution platforms. This opened up a new opportunity for us in content delivery business. We looked whether broadcasters can distribute their channels anywhere in the world through cloud technology without having to install any hardware in their office.

We do about 100+ channels where we manage pretty much everything over a cloud infrastructure and deliver it to worldwide audiences across 40 countries. Companies like Turner, Bloomberg, Vice Media, Viacom18, Times Network, and NDTV are leveraging Amagi’s technology to deliver their content worldwide both on traditional cable satellite and OTT platforms. So that is the key piece we are working on over the last few years.

Another interesting thing we are doing is the targeted advertising in the online video space. Just like TV channels, we can have geo-targeted advertising on connected devices like tablet where one can watch different advertising depending on who they are.


Geo-targeted advertising is already a mature scalable platform. The next big expansion will be the addition of sports channels besides a few more GECs. Next year many movie channels will also come on board’

Which segment of the business, ad technology or media technology, is growing?

Both segments are growing rapidly. The challenge for us is to manage the growth of both the businesses. Obviously, India is growing because we have signed up with new channels like Colors for our geo-targeting platform. This is a big thing for us. We work with leading TV networks like Viacom18, TV18, ZEEL, Zee Media, Sun TV Network and Times Network on geo-targeted advertising front.

In Viacom18 stable, we have Colors, Colors Marathi and Colors Kannada. From the Zee group, we have Zee TV, Zee Cinema and Zee News. We have just started doing their regional channels as well. Recently, we added Sun TV’s HD channels to our portfolio. We also work with the Times Group’s TV channels. Additionally, we also have TV18 channels on-board.

How does Amagi’s geo-targeted advertising platform works?

The way it works is that there is a technology infrastructure rollout at the head-ends to begin with. Once that is done, the business model is that we buy spots from TV channels. Let’s say a spot costs Rs 100 nationally; we buy it for Rs 100 from them. We split the same spot and sell it to different advertisers depending on the geography. We have an ad sales team that works with advertisers for geo-targeted advertising. We buy inventory, mark it up with our margin and then sell it.

How has geo-targeted advertising benefited broadcasters and advertisers?

The benefit for advertisers is that they will have to pay only Rs 30 in geo-targeted advertising instead of Rs 100 that they used to pay for rolling out ads nationally.

For broadcasters, they get a premium to the regular price that they get for ads. They also get new set of advertisers which wouldn’t have come on TV at all in the absence of geo-targeted advertising. A lot of advertisers who were looking at print are now looking at TV because of targeted advertising since it is cost-effective.

How many advertisers have you engaged with since launching geo-targeted advertising?

Over the past five years, about 3,000 advertisers have come on-board. Many of them are non-traditional advertisers, mainly small and media enterprises (SMEs). In addition, large brands have come on board for geo-targeted advertising.

Every brand has some product salience for different markets. For example, a product like Dove, which gets bulk of its sales from four metros, will think ‘should I spend more money on advertising nationally or in core markets?’ With targeted advertising, brands can do national campaigns with booster for specific regions of their choice. These are the capabilities that brands are leveraging.


‘The reason we have a lot of Hindi channels is because HSM unlike South India don’t have strong regional advertising alternative platform to print. For example, in Tamil Nadu one can advertise on Sun TV, or a Raj TV or a Star Vijay to reach local consumers. Similarly, in other Southern markets, there are many options on TV. However, in HSM, the language is not delineated well as everyone wants to watch top Hindi channels. That’s the reason Hindi channels are very attractive.’

A sizeable chunk of TV channels on your platforms are Hindi. Why is it so?

The reason we have a lot of Hindi channels is because Hindi-speaking markets (HSM) unlike South India don’t have strong regional advertising alternative platform to print. For example, in Tamil Nadu one can advertise on Sun TV, or a Raj TV or a Star Vijay to reach local consumers. Similarly, in other Southern markets, there are many options on TV. However, in HSM, the language is not delineated well as everyone wants to watch top Hindi channels. That’s the reason Hindi channels are very attractive.

We are also in talks with Sun TV Network for geo targeting on other channels in their bouquet. We can technically do Chennai and the rest of Tamil Nadu because these are two different markets. Likewise, we can do the same for Hyderabad and the rest of Telangana.

Is the adoption of geo targeting among broadcasters and advertisers on an increase?

All the major networks have started embracing the market. Top 3 of Hindi GECs have come on board for geo targeting. Zee TV and Colors are working with us. Star India is doing geo targeting on its own. On the other side, advertisers like Unilever, Coca Cola, Pepsi and Parle are leveraging geo targeting.

In that sense, it is already a mature scalable platform. The next big expansion will be the addition of sports channels besides a few more GECs. Next year many movie channels will also come on board. It’s a cyclical effect.

The challenge for an advertiser is that, if you give a 20% reach in a market, he will find it difficult to replace my print/radio advertising. But the moment you reach a critical threshold of 50% and above, it becomes an attractive platform for them to replace print budgets for TV. With Zee TV, Colors and Star Plus, we already have 50% reach on a 3+ frequency model. So once that happens, advertisers can change their media plan to make TV their primary advertising vehicle based on geo targeting.

Has geo-targeted advertising hurt the print players?

I do not believe in this cannibalisation theory because a lot of advertisers are also expanding their budgets creating new opportunities. The overall ad pie, whether it is print or TV, is also growing. The targeted advertising spend on TV is more of incremental advertising. Print, particularly regional print, has also been growing.

Between Amagi, Star’s Ad Sharp and Surewaves, what would be the total spends on geo-targeted advertising?

In my estimate, the aggregated revenue proximity of what we, Star and Surewaves have done is about Rs 200–250 crore. This year, it might be just about close to double of that.


‘The aggregated revenue proximity of what we, Star and Surewaves have done from geo-targeted advertising is about Rs 200–250 crore. This year, it might be just about close to double of that.’

You launched Amagi Mix last year. What potential do you see for a marketplace model like Amagi Mix?

Amagi Mix is providing full e-commerce solutions. There is tremendous potential for Amagi Mix. Our intention is to expand it to print, radio, digital and billboards on the same platform. So Amagi Mix will become a one-stop shop media commerce platform. This is also a marketing platform as it helps advertisers to create their own media plans. Our media consultants will help through the process. We are not just a media buying platform, as we are building an ecosystem by enabling credit from financial institutions. The potential is huge as 20% of all advertising spend is done by SMEs, who need a good media agency model.

How is your content distribution tech business doing?

We work with Indian as well as international companies for taking their content worldwide through-cloud based technology. In India, we work with Viacom18, ZEEL, NDTV and Times Network. Today, we are delivering content in about 40 countries. With Amagi’s distribution technology, the process of launching channels in foreign markets becomes automated. It helps media companies to launch a channel in two weeks and that too at a lesser cost than, say a satellite or a fibre. The cloud technology for delivering content is future-proof. Once content is on cloud, it can be delivered anywhere. Going forward, we will be enabling new processing capabilities using artificial intelligence and machine learning technology to create new user experiences and enable automation of a lot of human processes.

The media tech or content distribution is high margin fast growing business for us. We grew 3X last year and it will be 3X this year also. We are in the early phase of this business. We are a 100+-channel company and our target is to be above 1000+ channels in next two years.

Between India and international, which one is growing faster?

International business used to be nil three years back, but now it is 30% of the revenues. It is growing rapidly and it is a high margin business. In India, the volume growth is higher thanks to new channels coming in. Our blended revenue growth across both businesses will be 2X of what it was last year. Our revenue is in hundreds of crores.

Last year, Amagi had raised $35 million from KKR-backed Emerald Media and PremjiInvest? How do you intend to use the funds?

We received $35 million about 4–5 months back from Emerald Media and PremjiInvest. A large part of our funding is going into R&D both in Amagi Mix and the media tech business. We are also expanding internationally to Indonesia. Currently, we have enough money and are not looking to raise funds.