We have all suffered the random pop-up ads that take over our screens when we would rather be reading the news, watching videos or playing our favourite game on our phones. To make matters worse, we end up bearing the data costs for ads we did not want to see or hear in the first place. Divya Pratap Singh wants to change the way advertisers’ messages are packaged and propagated. What's more, he wants the advertiser to bear the related expenses; but that’s not all…he wants the consumer to benefit in some way.
A serial entrepreneur, Divya, a software engineer from IIT Delhi, is no stranger to the perils of running a startup in a cut-throat environment. His previous venture 365hops.com – a market place for offbeat travellers and activity seekers – failed to really take off. However, the idea for his next startup was already brewing. He, along with a classmate Rakesh Sehgal and his business partner Gaurav Tiwari, with whom he was running a startup Publify – a digital signage advertising platform– were all operating out of a co-working space when the idea struck. "Somehow both our startups didn't do well and we wrapped them up at almost the same time. I had started to work from Rakesh and Gaurav's office as I had to close my own. In June 2015, during a discussion we were having, we realised that everybody was trying to reach mobile consumers, but there were only limited options to do so. It was just a co-incidence that one of us got a call on the mobile and as the bell rang, the inspiration to start PayTunes struck us," says Divya.
PayTunes is a mobile advertising platform where advertisers can selectively target mobile consumers using a ringtone. PayTunes is the first platform that is bringing audio-advertisements to mobile phones on such a scale. Currently, most mobile advertising is via banner ads on mobile apps. YouTube and some other platforms provide video ads but these are skipped by mobile consumers due to high data consumption. "With our innovative ad delivery approach, we are trying to overcome these limitations using the very 'natural,'" he laughs, inserting air quotes, "phenomenon of incoming calls with minimal data usage, while providing the advertiser with options to target the consumers based on their profile."
The PayTunes Android app replaces a user’s ringtone with ad jingles and rewards users with points on each incoming call. Users can later redeem these points through mobile recharges and bill payments. Advertisers can selectively choose the users they want to target and push their ads from the PayTunes platform's backend.
From a user’s perspective, PayTunes is an app that rewards them for just receiving calls. The whole system is automatic; an ad is delivered through the platform and users don’t have to download any ringtones or do anything at all to get these rewards. “We are coming up with more options for users, like giving them the option to dislike or discontinue certain ads as well,’ says Divya.
For advertisers, PayTunes provides enough targeting mechanisms to deliver ads to their desired target audience. The advertiser can select users based on gender, age, location, profession and other criteria with data on exact ad exposure per user as well, making it different than existing platforms in this domain. “There are several mobile ad media that brands are using to reach mobile consumers, but they all have their limitations (in terms of type of ad content they can deliver) and issues of wastage and user retention.
“Our aim is to create a targeted and precise mobile ad delivery platform without any ad wastage,” says Divya. “Sure, there have been uninstalls of the app. Generally, apps in this segment witness an uninstall rate of around 30-35 per cent; we are also in a similar category. Some people who are not interested in listening to ad-jingles in place of ringtones tend to uninstall the app. Some people find it refreshing, though, to hear new ad-jingles in place of their boring ringtones. They intend to keep the app for the added advantage of earning from it on every incoming call.”
Every user gets a reward point on each incoming call, when the jingle is played on the ‘ringing mode’ of the phone successfully. Currently, they can redeem these accumulated points by doing a free prepaid recharge or making payment on post-paid bills.
Since its inception, feedback has been pouring in that users want more control over the
ringtones, like wanting to have the ringtone category feature within the app where they can select or deselect the type of ad-jingles they receive – a sign of building interest. The advertiser, on the other hand, is interested in more user analytics for current users and user profiling on the platform
PayTunes’s approach has never been tried before in India. "We had our concerns over how users would react to the product as their mobile ringtone would change daily. We ran a pilot with our alpha version on around 200 users. When we saw that people were grabbing it with both hands, our doubts were cleared and we decided to proceed with the product," he says. The only issue was creating a system that users could not misuse as they were distributing digital money. “We had to plan and research before we could finalise our approach and achieve the same with minimal loopholes,” says Divya.
However, finances were a concern as their debut startups had not succeeded; hence, raising a round of funding was critical. They successfully raised $100,000 in funding from CIO Angel Network at the end of September 2015.
“We have got huge traction and word-of-mouth around the product; we reached 25,000 downloads within a month of launching without any major spend on advertisements. We want to build on this good start. We are actively looking to raise the next round of funding as this is a going to be critical in spreading our wings to different parts of the country.
The beta version of the PayTunes app was launched in mid-October in 2015. Since then, the app has been downloaded more than 50,000 times. Most of the users are college-school students and people with jobs in the under-33-years’ age group. “Although we have not penetrated the older user segments as much, we are witnessing even greater retention rates in the lower-age segments. We are currently experiencing a growth rate of 15-20 per cent per week, and are expecting to hit the 100,000 download mark in the first week of January, and 1 million users within the next six months. We aim to sign up 100 advertisers to our platform within the next quarter. We are running exciting campus programmes in more than 100 colleges across India as we are trying to first target the youth. We are majorly depending on referrals and word of mouth publicity to reach other segments,” says Divya.
The PayTunes team is in the final stages of talks for ads on their platform with ICICI, Pidilite, Pepsi, Easy Cabs, Mahindra and others. They have already engaged with media agencies like MadHouse, OMG and PHD media groups for campaigns.
The Indian digital advertising industry is valued at $0.8 billion right now. It is expected to become a $ 1.8 billion industry by 2018, considering that the digital ad spend is growing at 32 per cent a year with increasing focus on mobile devices.
Innovation and creativity are really all an advertiser’s got. As a lot of articles have rightly pointed out, smartphone penetration in India is over 60 per cent, yet, companies’ ad-spend on mobile advertising does not reflect this immense popularity. and is only hovering at somewhere around 2 per cent of their total advertising budget. Even within the segment, banner ads are the only form of multimedia advertising that companies have tapped into.
In this space, monotony acts like a cancer. Thus, by virtue of using a unique medium and space to advertise, and in turn even incentivising a user for listening to an ad, the company has managed to create quite a buzz. However, more aggressive marketing, and more and more perks being awarded to users would definitely enable them to widen their net.