Chetan Kulkarni, CEO of
Vizury Interactive, confirmed the development but declined to give details on the size of the deal and the fund deployment plans, for “competitive reasons”.Advertisers are increasingly relying on web analytics tools of online marketing companies to judge the relevance of a website publisher's keywords, traffic, content etc. Publishers rely on them for selling their inventory to the appropriate advertiser and for understanding the profile of website visitors.
Several online marketing companies also act as networks or intermediaries between advertisers and publisher websites to match demand and supply for online ads.
Vizury's website states that the firm has developed a proprietary visitor relationship management (VRM) behavioural targeting engine that enables an advertiser to engage in conversations with its website visitors using display advertisements. The tool identifies visitors from the advertiser's website and studies their behaviour and website exploring pattern. VRM then creates an advertising specific banner wherever the visitor moves on the internet which should ideally prompt him/her to perform the desired action.
Ojas is an early stage investor focused on technology companies and typically makes first round investments to the tune of $250,000 to $1.5 million. This is its second investment in recent times; it bought into hardware product startup RiverSilica Technologies in December.
According to the Internet & Mobile Association of
India (IAMAI), the size of the online advertising market including display and text was Rs 785 crore in 2009-10. VCs are showing rising interest in online advertising and marketing firms. According to Venture Intelligence, online marketing companies received funds worth $71 million in 2010. This was up from the $58 million in 2009.According to investment banking firm Viedea Capital's director Dipak Srinath, what has caught the attention of VCs is that companies are allocating more money to online ad spends. Auto, banking, insurance, education and travel are some of the biggest spenders on internet ads. Companies like Mahindra & Mahindra are experimenting with the web and to interact with potential users for generating interest and co-creating products before they are launched.
Earlier this month, internet advertising firm Komli Media received a third round of funding worth $15 million, and Ybrant Digital received a fourth round of funding worth $ 48 million. Even mobile ad networks like InMobi are drawing VC interest.
Mohanjit Jolly, ED of VC firm Draper Fisher Jurvetson (DFJ) India, said there are a bunch of new trends that is making the online advertising space interesting. First, the number of internet users, which currently stands at around 60 million, is expected to double over the next few years. “Also, with the growth of e-commerce we are seeing a greater number of advertisements to publicize these services. Moreover, social networking sites have opened up innovative ways of advertising through games etc,” Jolly said.
Helion Advisors MD Kanwaljit Singh said that the increasing popularity of display and video ads as a branding tool is another positive trend. “The youth connect through internet is becoming vital as a branding strategy,” he added. Additionally, firms like Jivox offer value added tools for advertisers to create their own advertisements, while PubMatic enables publishers to undertake real time bidding and brand protection tools.
Sachin Maheshwari, director at funding firm Zephyr Peacock, said that online marketing companies like Ybrant Digital and Ozone Media are now expanding to overseas markets and making acquisitions to widen their revenue base.
VCs are also encourged by some good exits. Mumbai Angel Network is said to have exited at a good valuation from mobile advertising firm InMobi when a group of VCs bought its stake last year.
Internet advertising still forms a small segment, about 3%, of the total advertising pie in India. The figure is forecasted to grow to 5% by 2012. It faces challenges like slow internet connections and general averseness of Indian consumers towards online purchases. But with broadband becoming cheaper and 3G coming in, the change could be rapid.