[Rathi_b]

Logan LOC would be very necessary to ambitiously fund their business now, the warrants issue to my mind is just a back door entry to gain stake. My guess is once the warrants are notified by the exchanges we should see rapid activity. You know @logan LOC is not going to be as small as the 260 crore warrants it is going to be a larger amount because they are looking for an upside of 30-50% in business revenues once it becomes operational. We should wait for the warrants now to be notified, I hope it happens early and not like the muskaan issue. Just remember he was talking also of a substantial dividend too for the next quarter in the AGM. When we were at SKR’s office last couple of times we were given concrete updates and that is why we the hyd investors are also hopeful that it will happen in the near future.

[Logan]

Thanks @Rathi_b for your reply and sharing your thoughts with us.

In the November conference call he said the loc is for sorting out all the issues and not necessarily for growth- I think he meant to close off Daum issue. He also talked about bringing in stable investors and it was a personal endeavour of his and he had made a good progress on that.

(Maybe get the price to 5PE and then stable investors start coming in and he can’t say this in public?)

Also in the September call, if you remember, he gave a speech at the end about where he thinks the industry is going and he was very confident that the company has a great future and he also mentioned that they have great plans for the future (didn’t say what those plans are).

Don’t know what to take out from these but maybe after many years (2016) they are finally looking at growth again. The industry is changing so much and if he takes good decisions then it’ll benefit us. Whatever he does, he should not keep investors in the dark.

[hw_tw]

We always talk about BCG’s financials and other Legal issues, it would help if we get to know the progress they are making in their core Ad Tech business.

For example in one of the call during lock down period SKR mentioned that they are adding lot of clients but the ad prices are coming down.

I am sure BCG will be tracking their own KPIs and Metrics. It would help if we know the actual metrics they track. For example Telecom companies track in terms of ARPU, similarly Affle measures it in terms of CPCU – Cost Per Converted User

Some metrics which I could think of. In case of BCG it could be something different too, but knowing BCG in terms of actual business growth would help Investors and Analysts to take informed decision. Infact I would suggest SKR to give a briefing about these metrics rather than focusing on financials and recievable days

– Total Ad Impressions
– Click thru rate
– Conversion rate (if they track it)
– Revenue per million Impressions
– Cost per Click
– Total Publishers
– Total Advertisers
– Growth rate on a or q-q or y-y basis for the above metrics
– Breakup of these above metrics in terms of delivery channels (web, mobile, OTT), formats (text, image, video) and also in terms of region wise, industry wise, age group wise

I guess they also have a tie up with 3rd party Ad Tech platforms. I am assuming in this case they might be just providing services as an Ad Agency. It would help if they can also provide stats generated using their proprietary products vs 3rd party products

@Rathi_b, @admin – please see if you can get this info in your next meeting / mail

[Optimus Prime 06]

Market share increasing

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[Raj]

3 crs+ trade today.. What can be the news?

[hw_tw]

@Optimus Prime 06, @Raj – The AdAuth figures are definitely showing a good progress since long. While this is good and gives us some indication of business growth, we can’t really consider this at face value and expect sales figures also growing in same proportion.

The reason being that we don’t know the total visitors to each of these sites and the percentage of ads they are serving via BCG platform.

For example BCG with 44k publishers lets assume might be serving some 4 billion impressions per day/month whereas some other company with just 10k publishers with higher number of active daily visitors might be serving 2X or even 3X of BCG and also might be earning higher CPM impressions than BCG.

So it ia important to know these stats directly from SKR

[vgsatwork]

Interesting article on efficacy of digital advertising. Do read when you find time…
https://thecorrespondent.com/100/the-new-dot-com-bubble-is-here-its-called-online-advertising/13228924500-22d5fd24

[vgsatwork]

One more interesting read. Don’t think that I am trying to portray the digital advertising companies in poor light. It is only meant to educate ourselves better..

https://thecorrespondent.com/125/the-non-sense-of-online-advertising-when-the-numbers-dont-add-up/267513125-ebeb97f2

[hw_tw]

@vgsatwork – I don’t agree on the view point in these articles. The example of eBay is too basic. eBay as a brand if they are still spending money on eBay keyword it is their marketinf persons mistake. Ofcourse they would still need to do that at important times like holiday sales season etc; to avoid competitor attracting their potential customers.

I believe the advertising industry is here to stay for long and the adtech companies which continuously innovate and adopt to changes will remain in business.

In my view there are these different types of advertising and each of them has their space depending on customers’ needs.

Let me explain it with a bit of physical world comparison.

Type 1 advertising – It is like a pamphlet distributor. They don’t care what exactly you want but still keeps giving you those colorful pamphlets and also give it multiple times if we happen to walk before the person multiple times or if there are multiple phamplet distributors standing across the street at different locations. Most of times we see those pamphlets thrown on footpaths or dustbins. This doesn’t mean all the money is getting wasted. The intention over here is to create awareness and also do some conversions.

In this case, the sales person in the store didn’t had any idea that you are visiting the store because of the pamphlet. They were blank in estimating ROI on this investment but were still doing it as everyone else is doing it and it is important for them to stay competitive and let potential customers know about their presence and their offerings. It’s a pure marketing activity.

Type 2 Advertising – To solve the ROI problem they introduced a unique token no. printed on the pamphlet or just asked customers to show the pamphlet or paper cutting in case of news paper based ads so that the customer can get a special discount or a goodie.

This solved the ROI problem to store owner … they could now calculate the actual amount spent vs the footfalls + business they are generating. They could add additional additional stats like whether the customer was new or existing, their gender, age group, type of items purchased, time of visit etc; to improve their campaign.

Type 3 sales conversion – In this case the sales man or the store owner knew the customer visited with so and so reference but they are still not aware of the choice of the product which customer wants to purchase, his budget, other specifications like color, size etc;. It’s all in the hands of sales man to get to know all these details and sell him/her something as per customer preference … this conversion step really may or may not happen and the real challenge is that the sales person doesn’t know the exact reason or even if they know they can’t do anything or they don’t act upon it.

In the digital world BCG is in space of Type 1 and Type 2 kind of advertisings wherein they show ads (Type 1) and also redirect customers and track these redirects (Type 2) whereas Affle is space of Type 3.

Affle is doing Type 3 a bit differently. Instead of asking the customer their preferences they are monitoring customer moveme ts (page, app visits, clicks etc;) and having an algorithm to predict the likelihood of purchase of a certain product from certain store and place him/her an ad. Their focus is to ensure conversion is happening with minimal no. of ads as they are spending around 40 rupees to track customer data points.

From the brands perspective this is working well and are happy as they know very well what is the cost of customer acquisition. The burgers are dudes.

But the challenge for Affle would be they have to co tinously keep monitoring customer’s on daily basis or keep buying this data from 3rd party monitoring companies and this costs will remain high for them. For example the items which I was looking last week will change in a day or two or in a week.

Right now they are doing it with some kind of anonymization of the data but at some stage they will get hit with privacy concerns, regulatory restrictions or breach of tveir own data or 3rd party provider. I feel this is a huge risk for them and would their whole business down.

While Type 3 is a clear win win for all parties involve I feel the AdTech companies need to approach the same in different other ways too which doesn’t have any privacy concern or have huge cost of data acquisition.

For example again coming back to physical world before OYO days when ever we use to go to a new city, we use yo get first greeted by auto wals for lodging / hotel. Over here we give him our specifications in terms of budget, distance to place, timeframe and few other criteria. This guy would have a tie up with different hotels in the vincinity and he also knows their services, rates and most importantly his commission. He does a bit of calculaton on the spot and gives us 2 to 3 hotels and also gives some pros and cons. If required he would also take us to all the places and have us a physical visit of the room before finalizing.

This process really works and the conversion rate is almost 100% unless the auto fellow has gone terribly wrong in understanding customer preferences.

Coming back to the digital world the same can be achieved with something like a conversational sales bot serving as ad. All it has to do is have a conversation with the lead and understand their preferences and do a sale there itself or redirect him to appropriate store based on preference.

The advantage of this method is that you get better idea about the customer preferences and that too at zero cost compared to continuous monitoring. Also there is no privacy concern as the customer homself is giving all the details. The AdAgency can use these details till they get a confirmation from the customer that they had finalized something or ela se keep recommending him different other options. Basically the AdBot is acting as a agent / broker.

I would be happy to see if BCG
implements something in similar lines and offer customers both conventinal marketing and conversion based sales bots.

[Logan]

Excellent analysis @hw_tw. Thank you for sharing it with us.

[radhutheoptimist]

Regarding digital ad… I can share my personal experience. I bought a watch recently only because I saw the ad while browsing. Some of my few products too I wouldn’t have bought had I not seen the ad. How many of us watch TV ads? We change channel… The moment we see the ad right. But still companies spend billions for TV ads. Same logic applies to digital. Digital ads reach much more specific audience…. So digital ad budget will always grow. This is my personal view.

[Logan]

This was written by Scott M.Stolz on Quora.

What would a world without advertising look like?
The world would be a very different place.

1.Most free content and information would be gone. You would need to pay for everything now. No more free articles, websites, online newspapers. No more free TV over the airwaves either. And most free services like Google Maps and Gmail would disappear too. Certain things might persist, like Wikipedia and public broadcasting (PBS), but they would be constantly asking for donations to stay alive.

2.Products would deteriorate in quality and be packaged in plain packaging. It would be like the former Soviet Union, where factories did not advertise their products either. If you wanted them, you went to the store and bought whatever was on the shelf. Without advertising there would be no way for consumers to compare what products are better. This means manufacturers can make deals with retailers for exclusive distribution deals, and retails would accept them, since there is no consumer pressure to carry other brands (mostly since they are unaware there are other brands since there is no advertising).

3.It would be easier to form monopolies, since competitors cannot advertise. Some back room deals with suppliers and distributors, and it is easy to put a new competitor out of business. And without advertising, no one will even know the new company or product or service even exists, making it almost impossible to launch. So the lack of advertising would give an incredible advantage to incumbents. And incumbents would start behaving more and more like monopolies, increasing their prices, reducing the quality of their services and treating their employees poorly.

4.Depending how far the ban goes, it may even be difficult to find businesses. For example, one neighborhood near me has a ban on outdoor signs. One day I tried to find a business. I spent 1 hour looking for that place, and gave up, because there were no signs. And even if signs were still allowed, if a new shop opened up the next street over, I would never know unless I happened to drive by it.

5.Any business that does not have a prime location would have a harder time staying in business, since their only source of customers would be drive-bys. Real estate prices for prime property would probably skyrocket as a result.

6.Freelancers and independents would have a hard time making extra money, since they can’t get the word out about what they offer. They would have to get corporate jobs, if they could find it. Some of these people would have to go on public assistance since they can no longer support themselves.

Many people hate advertising, but without it we’d be handing money and power over the the incumbent corporations who are already in retail outlets, and are already known in the marketplace. It would effectively kill any competition and any startups, and force freelancers and independents to go back to work for the very corporations they were trying to break away from.

Advertising may not be pretty, but a world without competition and innovation is pretty ugly too.

[vgsatwork]

Dear @hw_tw

As I had mentioned before, I am not trying to portray digital advertising companies in poor light. Given that all of us are invested in BCG, digital ad tech company and we have a vested interest to see this industry and BCG in particular to succeed. But this article makes some powerful arguments which cannot be pushed away just like that and hence shared them with this group.

I had shared links to 2 articles and both are long enough and would require 30-40 min to read through. Not sure if you had the chance to read both of them fully.

But some of the points being made in this article is that the advertisers do not have a reliable metric to track the effectiveness of digital advertising made – be it search advertising, (referred by you as type 1) ROI based (referred by you as type 2). I am not sure there is really a 3rd type as mentioned by you and exists in the industry. Most of the high tech, big data, AI driven targetted ads (based on reading from these article) are nothing but selection effect where targetted discount coupons for pizza are being handed out to individuals who are already lined up to buy pizza. They would have bought the pizza anyway. But the targetted mechanism proves that they had the coupons with them and hence the sales generated by them is directly a result of successful targetted ad campaign delivered through their platform and the pizza guy has no way of verifying or disputing this claim since he does not have the data/metric from his own source to verify/validate this claim..

[vgsatwork]

Update on my earlier post #9744

Day before yesterday I got a call from someone in Brightcom saying that suresh reddy wanted to speak to me and wanted to fix up some time. I thought it was joke. But I did get a call from him last evening on the complaint that I had raised in scores portal. He was trying to understand my concern and I had told him that these allottees being involved in day trading doesn’t feel right and it may not be against the law, but it is against the spirit of it. I also told him that this got reported in the exchange only because the lot size exceeded a given number. Otherwise such trade wouldn’t even have become public knowledge. He told me that he came to know about the trade on that day itself and have spoken with the investor. Per him the investor was trying to check the liquidity by placing a test order and that is all there to it. Since then the investor has been advised against such trades. He also assured that any lock-in period requirements of such holdings would be adhered to.

I did not had any other follow up questions for him on this topic and wanted to update back to you all since I had mentioned about this in this forum.

[buffet]

@vgsatwork

Many other investors also have raised similar complaints on warrant issue. Not sure how these complaints would impact the in principal & final warrant approval timelines from exchanges. Prolonged delay in
warrant approval could impact stock price.

Any possibility of warrant denial from exchanges?

[tanv151]

@vgsatwork Thanks for your post. It is very much in line with the explanation SKR gave us during our meeting last month. Many things are lined up that should push the CMP at respectable levels and may be beyond.

We should see a series of announcements as soon as exchanges approve the issuance of warrants. BSE approved the preferential issue on 8th day after the voting date, so I am hoping their approval on warrants should be received soon.

[vgsatwork]

@ buffet
I don’t think warrants would be denied per se since the resolution towards the same has been passed in AGM. It might mean regulators could take some more time to do their due diligence before approving it.

[vgsatwork]

Ad tech ecosystem overview – informative PPT

http://www.cloudbanter.com/wp-content/uploads/2015/08/AdTech-ecosystem-overview.pdf

[vgsatwork]

This article gives a view of how a given advertising $ is being spent and who gets how much in the programmatic advertisement value chain..

‘There is a big hole in the value chain’: Brands lose 50% of the money they invest in programmatic ads

From quora…
https://qr.ae/pNxv0m

[J.Bedi]

Rakesh Bansal advisory (known face on Business Channels) is also exploring BCG to invest.

[Author]

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