[App Fridays] PayTunes lets brands 'mini-broadcast' jingles. Can ‘Snapchat stories for audio’ sector take off?

Advertising and effective storytelling play an important role in informing potential consumers about a new product and also creating brand recall. Short, catchy ad jingles with emotional undertones, like Bajaj’s popular jingle ‘Hamara Bajaj’ or Closeup's ‘Kya Aap Closeup Karte Hain’, have achieved great success.

But unlike the ’90s or early 2000s, television and radio are no longer the only channels to advertise. End consumers have much shorter attention spans now and divide their time across social media and ad-free video streaming platforms (like Netflix), alongside mainstream television. Jingles on TV generally don’t command the same attention now, and many brands are also complementing their mainstream advertising efforts with targeted display ads or hashtag campaigns on Twitter. The recent #PaytmKaro campaign has garnered a lot of attention online, but not too many millennials would likely recall the TVC.

PayTunes is a mobile app that is positioning itself as a new age audio-visual mobile ad platform, one that combines audio jingles with targeted advertising to help brands reach out to customers. Halfway around the world, Anchor.fm, a venture based out of New York, recently raised $2.8 million in a round led by Accel Partners, and has been considered equivalent to ‘Snapchat stories for audio’. In this week’s App Fridays feature, let us explore PayTunes and also discuss the potential for ‘Snapchat for audio’ offerings.

Story so far

PayTunes was launched in October 2015 by Divya Pratap (CEO), Rakesh Sehgal, Gaurav Tiwari, and Amit Naredi, and currently consists of a 13-member team based out of Delhi and Mumbai. Through its app, PayTunes ties up with advertisers to push short audio ads or jingles as mobile ringtones. After downloading the app and obtaining the necessary permissions, it replaces a user’s default ringtone with ad jingles and then rewards users with redeemable points on each incoming call. This way, smartphones become ‘mini broadcasters’ for brands looking to reach customers.

In June 2016, PayTunes announced that it had closed about $500,000 in pre-Series A funding from Indian Angel Network (IAN) and existing investors CIO Angels. Talking to YourStory, Divya noted that PayTunes had clocked about seven lakh installs so far, with a majority of the app's users based out of cities and states like Delhi, Mumbai, Rajasthan, Haryana, Gujarat, UP, and Bihar.

PayTunes has worked with about 25 advertisers so far, and estimates that it has helped its users cash out about 3.5 lakh transactions, worth about Rs 96 lakh based on their incentives. Divya mentioned that PayTunes has worked with brands like SBI Buddy, Cadbury, Renault, Zee TV, Nissan Motors, Hit 95 FM, Saavan.com, and even the BJP at different stages.

How it works

For end-users: After installing the app, providing some basic details, and verifying one’s phone number, users are automatically fed appropriate ringtone ads based on their geography, demography, and other info.

The longer a user listens to an ad (up to 15 seconds), before picking up the call, the more points he or she earns. On crossing a certain threshold of points, users can redeem them to recharge or pay their postpaid bills or participate in daily contests to win prizes like recharge vouchers, pen drives, mobile phones, or bikes. PayTunes’ description on the Google Play Store noted that it works offline too, with users not required to be connected to the internet to redeem points

1. Ringtone volume should be greater than 50 percent.
2. Users need to listen to the ringtone for at least seven seconds and the call should last at least 20 seconds.
3. To prevent users from gaming the system, PayTunes claims that there are no points on missed calls, calls not picked, or calls on which the phone's ringtone is silenced.

For advertisers: PayTunes works as a complete ad platform with inbuilt analytics, and lets advertisers choose the users they want to target based on geography, demography, and other parameters before pushing their ad from PayTunes’ backend dashboard. While the initial engagement is only through audio, advertisers can also conduct surveys, launch contests on the app, and display them to users, after they complete their call. PayTunes works on an impressions and conversion model, and brands need to pay only for successful deliveries. Brands can also:

• Decide total exposure per user and frequency cap of ads.
• Drive the user traffic to their website through the app.
• Receive real-time analytics of campaign.

PayTunes also has a time-based ad delivery feature through which advertisers can run ads at specific times. For example, a brand like Kelloggs can play its ads during morning hours, while brands like Dominos or Pizza Hut can run their ads only during lunch and dinner hours. TV soaps can target users during their show timings.

The end user experience

Divya explained that PayTunes is positioned as a mass market product for users who don’t mind listening to ad jingles and getting some incentive in return. On signing up for the first time, one major concern for me was the level of permissions the app needs to function. While call and contact access were understandable, PayTunes also requested access to photos, media, and files.

On asking Divya about this, he noted that for some specific campaigns, the brands engaged with users by asking them to click selfies with their product and then upload the pictures through PayTunes to complete the campaign.

On the whole, the PayTunes app is self-explanatory and is also available in multiple regional languages for a wider market of users to understand its intricacies. Based on the details I provided, PayTunes targeted me with two specific ads from Flipkart and LG, which I felt were relevant to me. A majority of the app, though, is based on gamification, and users can accumulate points by referring friends or even installing other apps and engaging with them. While this will appeal to many users in the mass market, I felt that the ability to discover interesting jingles was also an indirect USP.

As a part of the current generation of 20-somethings who barely watch mainstream television and skip Youtube ads or rely on ad-blockers, I would consider using PayTunes just to discover new jingles, provided they are interesting and not all-out promotional messages. PayTunes users also have the freedom to block advertisers, if they wish, but will lose points if they do so.

The last-mile experience is also quite interesting. In the case of the LG ad, I wasn’t sure what was being advertised till I ended the call and saw the promotional page. My thoughts on seeing the final ad for a recent LG phone were similar to Leonardo DiCaprio’s character from Django Unchained, “You had my curiosity… but now you have my attention.”

To keep users engaged, PayTunes will have to keep collaborating and onboarding more brands on their platform to ensure that ads are constantly rotated and users are not drawn away. Anchor.fm lets brands and individuals broadcast short-form audio content, which, like Snapchat stories, disappear in 24 hours. PayTunes could also explore a similar strategy in the future to get brands to keep updating their content on a more regular basis.

While not necessarily in the same space as Anchor.fm, PayTunes also has the power to leverage short-form audio content and provide a more simplistic in-app interface for brands to upload and tweak their audio content quickly.

Sector overview

According to a recent report from IBEF, the Indian advertising industry has evolved from being a small-scale business to a full-fledged industry and is projected to be the second fastest growing advertising market in Asia after China. The report estimated that by 2018, the share of ad spend in India’s Gross Domestic Product (GDP) will be around 0.45 percent.

India's digital advertising market has grown at 33 percent annually between 2010 and 2015, while spending as a percentage of total advertising had increased to nearly $1 billion in 2015. Print contributes a significant portion to the total advertising revenue, accounting for almost 41.2 percent, whereas TV contributes 38.2 percent, and digital contributes 11 percent of the total revenue. Outdoor, radio, and cinema make up the balance 10 percent.

Of the current Rs 2,750 crore ($407.66 million) digital ad market, search advertisements constitute 38 percent of total advertisement spend, followed by display advertisement at 29 percent, as per the study.

Sanjay Mehta, an initial investor in PayTunes, believes that mobile devices will take a central position in a majority of the commerce activities in the upcoming years as users are now spending almost four hours a day glued to their phones. Brands will go where users are heavily engaged, and he believes that PayTunes can help brands that don’t have a strong digital presence engage with large audiences quickly.

Future plans

PayTunes claims to be clocking about 3.5 million ad impressions daily, with a daily reach of more than two million consumers. Rakesh, CMO of PayTunes, notes,

We've managed a strong user growth and a very high retention rate of above 60 percent, which is much higher than the industry average. This proves the acceptability for this product among users.

But now, with Reliance Jio slashing fares and other telecom operators also forced to slash prices drastically, PayTunes may need to tweak its promotional points to better appeal to users. Divya believes that the telecom wars, on the whole, will have a net-positive effect and might not really affect their business.

The team has some ambitious plans like tying up with telecom companies for better redemption plans and extending the usage and its reach by teaming up with mobile manufacturers. The company has initiated discussions with some of the leading mobile manufacturers and telecom companies for this already. The focus for now, though, is only on Android, as Divya and his team believe that the market share of Android in India is big enough, and also because implementing PayTunes on the more restricted iOS platform is a technological challenge that may not give them the needed return on investment at this stage.

You can download PayTunes here.