MobiAD Archives

InMobi Bets On Developing World Advertising
An Interview With Naveen Tewari, CEO

inmobi-man2.jpgInMobi is one of the world’s largest and fastest growing global mobile ad networks.

The company was founded just 3 years ago by three Indian entrepreneurs. It is now active in over 35 markets and processes over 7.5 billion ad requests per month.

Growing a company this quickly in a market that is evolving as fast as mobile advertising is not an easy task. We spoke recently with Naveen Tewari, CEO and founder of InMobi about InMobi’s 2-stage strategy for growth, as well as the key changes that he sees coming to the global mobile advertising market.

Naveen, your company began with a strong focus on the Indian market. Can you tell us about the basic structure of that market?

In fact there are 2 distinct sets of users in the Indian market.

The first segment uses the mobile as a “snacking device”. They have other ways to access the internet at home or work, and the phone is a secondary means.

The second segment is the one that I think is more important. These are people whose first access to the internet is through mobile. The mobile is not the “third screen” for them, it is the only screen. This second segment is actually more exciting because it is really huge, and will grow significantly over the coming 2 to 3 years.

What factors do you see effecting growth of the Indian market?

india_phones2.gifA couple things have to happen over the next couple of years. First of all, more local mobile content needs to be developed and published. Most of the mobile content distributed today is primarily global. We have local entertainment content over mobile, but it doesn’t go much beyond that.

We see that one of the main reasons behind this is that the size and reach of the mobile market in India is not really well understood by the content community. Correcting this view is something we are working hard on over the coming 6 to 9 months.

We believe this will help the local mobile publishing industry to grow, which in turn will provide much more high quality mobile inventory into which InMobi can sell mobile ads.

So in effect InMobi is working to “prime the pump” in the Indian market.

InMobi has moved well beyond the Indian market, what areas does InMobi see as high growth over the next couple of years.

We’re actually making a couple of long term bets in Asia-Pacific and Africa.

In both of these regions there are lots of people coming on line for the first time, and for most of them mobile is the only means of access. This is the group we would like to target, although in the short term the value of these markets might not be appreciated.

Luckily though, there are pockets of activity where the value of these segments has already begun to be recognized. For example Indonesia and Malaysia are both huge markets, and South Africa is very upbeat.

These are “lighthouse” markets in each of these developing regions that showcase how vast this media can become. InMobi currently reaches 50 million people in Africa and 100 million in Asia each month, but it may take another 2 to 3 years for the entire region to fully develop. This is a long term bet we are playing.

naveen-image3.jpgRecently you’ve made some strong moves into other more developed markets, how does that fit your strategy?

The second segment of our overall strategy is to go after the more developed, higher value – lower volume, “mobile as a third screen” markets, such as America and Japan.

In these markets consumers are already splitting their time between PC and mobile, and we’ll be working to take a share of the mobile segment.

In the short and media term these markets show a lot of promise, and over the next couple of years they should be the leaders for us as the developing regions mature.

However, at some time they will hit a saturation point. At that time, we expect that the developing markets will have grown to a point where they become the larger part of our business.

What about the level of competition you have seen in these various markets?

In the US you have lots of competition as there are many ad networks, and we were prepared for this.

However, outside the US, the competition is very similar in Asia and Europe, and I was actually pretty much surprised by this. In each market we see a couple of competitors, but it is pretty much the same.

We are also now just starting up our operations in Japan, and there the competition is not other mobile ad networks, but rather it is the mobile arm of existing ad agencies.

Is there a differences in the ad formats you need to support in different regions?

We actually support the same set of ad formats across the world. However, the uptake may change by region – for example in Africa it may be 10% rich media buy where in Europe it would be 40%.

naveen-quote1.gifOf course there certainly are regional nuances that we need to take into account. For example, when we came into Europe we needed to get a good app strategy in place because the smartphone penetration is much larger. And when we entered the US we had to spend more time working with ad mediation agencies.

Overall however, I’d say that 80% of our business is globally applicable. And that is why our business is scalable.

What is your view of the role of ad exchange & optimization companies?

I think it is too early for them to pop up, and in the short term it may be hard for them to survive.

They work well when you have significant supply and demand side complexity, for example if you are solving the problem that a publisher doesn’t know how to work with 20 ad networks.

The reality is that a publisher doesn’t have 20 mobile ad networks to work with, only two or maybe three. So your value as a mediation layer is not that high at the moment.

What future trends do you see for the next 12 to 24 months?

There are several things we think are important to be aware of.

App Economy: First, the whole app economy will grow into a very different thing. I believe that in the long term browsers will again become dominant. But in the short term, apps will make consumption of data services very easy, and so they will increase the consumer uptake. Apps can change the user experience and take it to the next level so that phones become a major media for data consumption. This is what apps will do for us.

Mainstream Mobile: Secondly, mobile as a marketing medium will become more mainstream over the next two to three years. Before it was always budgeted as part of “Other”. Now it has started becoming its own line item, even though it’s still a small line item.

Data driven: Finally, we need to make this medium much more data driven. The promise has always been there that we can know a lot about unique users. But that has been the promise for the past 10 years, and where is it? We are now working on ways that we can know the user based on their consumption that we see across our network. Then we can put this out to advertisers so they know they are reaching the right users far more precisely and targeted.

naveen-close1.gifEach month, we reach out to 170 million people across the world. We need to know much more about those 170 million people than we do today – we want to enrich the information about each user. And if we can get that data in a useable form, that is valuable information that will help this whole ecosystem to grow.

08.03.2010    Tags: , , , ,
Interested in Mobile Marketing and Mobile Commerce?
Subscribe to MobiAD News
Get the newsletter!

Subscribe to MobiAD