It’s been a roller-coaster ride for Komli Media so far, the Indian digital ad network that has raised around $97 million from investors including Peepul Capital, Norwest and Nexus Venture Partners.
Within few weeks of raising its biggest funding of $30 million in October last year, Komli’s CEO, Prashant Mehta, quit the company, raising concerns about the startup’s future. Till then, the startup was aiming to achieve $100 million in revenue by 2014.
Amar Goel, who founded Komli in October 2006, had to take the charge back after the CEO’s exit. Now, Goel is bringing several key changes to ensure that Komli gets back on its growth path again.
Firstly, Komli is now officially moving into the direction where most of its global peers are headed in terms of building the next generation ad platforms.
Goel told me in an interview that the startup is launching its remarketing demand-side platforms (DSP) that will mean a massive shift in the way it earns revenue. To start with, the billing will shift to SaaS model, where marketeers will pay on the basis of how how successful the remarketing campaigns are. This post from Digiday explains why DSPs matter and how do they work.
As part of its new strategic shift, Komli is also making few management changes. Ashwin Puri is being appointed as the head of Komli’s newly created remarking DSP business unit and Damien Lavin will now lead the startup’s South East Asia and Australia businesses.
Overall, Komli’s transition story is no different from how the digital ad startup Turn was forced to shift from its traditional ad network model to an algorithm-based platform that relied heavily on big data to help customers manage ad campaigns on-the-fly.
In some ways, this shift is similar to how e-commerce companies transitioned from inventory-led models to a marketplace.
“We’ve invested a lot in user interface and algorithms running these platforms. In 3-5 years, almost all our revenue will come from these platforms, ” said Goel.
Komli has already signed 20 customers including online fashion retailer Myntra to use its remarketing demand-side platform (DSP). The startup is hoping to achieve ad spend worth over $100 million on these new platforms in about two years.
“Komli’s detailed reporting and analytics allows us to monitor our campaign performance and optimization closely and brings a whole lot of transparency into the entire process,” Gowrishankar TS, a digital marketing manager at Myntra said.
Traditional ad networks have been facing a double whammy of sorts over past few years — on one hand both Google and Facebook have been quietly, but smartly chipping away the share of digital ad spend — and on the other hand, marketeers have been demanding more control and transparency.
“Remarketing and social ads now account for around 20% of the digital ad budgets, and marketeers are asking for solutions that help them manage their ads across search, social, etc., on their own because they are spending more,” added Goel.
While remarketing is nothing new, the idea of combining them with deeper, analytics-based demand-side platform, will help customers track and manage campaigns on-the-fly, without leaving any room for confusion about how effective a particular campaign has been.
Clearly, big data is at the core of Komli’s new strategy.
“Just today I was looking at some analysis our team has been doing about the time between 2nd purchase versus 3rd purchase at a given site, and the exponential drop off this has. This is all coming from our big data analysis,” said Goel.
For now, Komli wants to remain focused on South East Asia markets, which it estimates to be worth around $1 billion annually. India too, is a growing market and already worth around $500 million in social, digital ad spend.
Backed by investors such as Peepul Capital, Norwest, Nexus, Helion and Draper Fisher Jurvetson, Komli has acquired six companies over last two years.
“We are not looking to aggressively chase any acquisitions, an IPO too, is not on the radar yet,” said Goel.
As Komli makes this transition from being a traditional online ad network to providing analytics-based platforms, it faces some tough challenges from Google, Facebook and even InMobi. For Amar Goel, who had to come back after the Komli CEO quit last year, a lot is riding — not just in terms of investor money, but also in ensuring that the startup he founded is back on track, and turns profitable soon.