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Startup of the week: How a Ladooo plans to disrupt the mobile advertising economy?

ladooo-beta-23-b-512x250 bThe tiny little mobile screen is full of advertising prospects, provided you use it right. In app advertising, flash ads, banner ads – all make sense on mobile only when put across to the right TG at the right time.

Slight misjudgment in placing the ad and it becomes an annoying notification, which the consumer buzzes off right on. What do you do now? How do you get it right?

Instead of flashing an ad of your mobile app, you give them an opportunity to download your app and make money out of it. Sounds impossible? Well, not exactly!

Enter, Airloyal!

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AirLoyal is a Reward based Ad Platform that drives consumer attention, engagement and action. The company has an Android app called ‘Ladooo’ to reach users across target segments in the country.  The company is co-founded by Nithyanandan Radhakrishnan, Ex- Member of Executive Council, Infosys and Raja Hussain.

In the lieu of the service tax added on mobile advertising and the heating startup economy in India how sweet the Ladoo actually is? Let’s hear from the horse’s mouth.

In conversation with Raja Hussain, CEO of Airloyal. Edited excerpts:

What inspired you to come up with Airloyal?

Brands and their advertisers today compete in a crowded environment and find it hard and expensive to retain attention and drive engagement from consumers for their digital advertising campaigns. Airloyal seeks to be the answer to this problem and help deliver measurable engagement for advertisers through Ladooo, which has a value proposition for Advertisers & Consumers.

Globally, 68 per cent of mobile monetisation is gained through apps. In India, 95 per cent of the subscriber base use prepaid mobile (800M) and there are 200M Mobile Internet Users in India today with 80M Smart Phone Users. We chose this category since we see immense potential for growth in this area.

Right from ideation to execution, how has the startup journey been?

We realized that the mindset of the young Asian consumers in emerging markets was very different to their counterparts in the USA or more developed Asian countries like Japan and Korea. The biggest problem for advertisers to reach consumers is to get their attention. This was becoming tougher and tougher as there are too many ads trying to get the consumer to click something, download an app, share something on Facebook, etc. In markets like Indonesia and India, prepaid mobile users accounted for more than 95per cent of the mobile subscriber base and the biggest problem for consumers in these markets was that they need airtime (recharge/talktime/topup) for making calls, to stay connected to the internet to access WhatsApp, Facebook etc. For most people, their need for airtime was far more than what they could afford.

Airloyal was founded in August 2013 to focus 100per cent on this opportunity and address this challenge. Despite having started only three months ago, Airloyal’s first product, Ladooo, registers several thousand new users every day, with more than 40per cent daily retention, and has given away rewards worth 50,000 dollars to its users.

How does Ladooo work?

Ladooo is a mobile application that incentivizes users to download/install by offering mobile ‘free’ airtime to new subscribers. Then the application serves as an advertising platform targeting subscribers. Anyone who downloads the Ladooo app and completes offers to get airtime is a valid user. There is no subscription involved here. When a user installs Ladooo and when they complete offers, they earn money in their wallet. Then the user can choose to top up any mobile number (belonging to any mobile operator) in India. Airloyal has established integrations with all the carriers either directly or thru aggregators and prepay their carrier / aggregator partners and they allow us to top up specific user accounts in real time. The money they earn goes to their Ladooo wallet; it does not expire. They can choose to use this money to top up their prepaid mobile accounts based on the top up plans supported by each operator.

Ladooo is the name of an Indian dessert. Why Ladooo? How did you decide to name your mobile app after it?

We wanted to name our consumer product and explored many different options. We finally arrived at “Ladooo” (pronounced as Laddu). Ladooo symbolizes gifting or free and celebration. If you think about it, you would have never really paid for the Ladooo’s you have eaten.

It also catches the attention of our consumers.In addition; we plan to take this brand across the world. When there is an “apple” from the US that the world loves, why can’t there be a “Ladooo” from India that the world can enjoy?

Mobile ads are now subjected to service tax. How will this impact Airloyal? 

Yes, this would mean that the advertisers need to increase their spend to address this situation. If not, they will be able to achieve less with their current budgets. This is a growing but still a small industry, the government must reconsider this.

Please shed light on your business model. How are you monetising your services?

Our business model is straightforward. We give away up to 50 per cent of what we get from advertisers. We charge advertisers on Cost per Engagement (CPE). We don’t work on Cost Per Mile (CPM) or (Click-through Rate) CTR basis. We only charge for the engagement we commit to get for the advertisers.

How has your financial journey been so far? Are you looking for a new round of funding?

We invested our own capital when we started. But very quickly we raised additional capital from Zhenya Tsvetnenko, one of Australia’s most successful entrepreneur and investor. We are now profitable and growing fast. We are in the process of raising our Series A. You will hear from us soon.

Who according to you would be your closest competitor?

We are a new model and a first of its kind. There are a lot of me-too players in the market. Out of them, we feel that Jana and Pokkt are doing somewhat similar things to us. We are building a tight community of users in the 15 to 25 years target group. We are focused on India now and are able to run deep engaging with direct advertiser clients and brands.

How are you marketing your services and products?

Consumers: 100 per cent word of mouth and viral so far.

Advertisers: Events, direct relationships and ad agency and ad network partnerships

How big is your client base and how would you describe your TG? 

Roughly 30 brands engage with our platform; including, Goibibo, TicketGoose, iPlay, Cleartrip, Flipkart, Quikr, The Times Group, Vodafone India and Bharti Airtel, among others.

We target 15 to 25 year olds. They are students or first-time job holders. This is a big market in India and a lot of advertisers such as new app advertisers, ecommerce sites, apparels, movies, fashion brands, and the FMCG industry want to reach them. We are an effective platform for these advertisers to reach these users. Our advertisers love the fact that they pay only for guaranteed engagement and their campaign can be targeted based on geography, device type, demographic and past interests.

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How strong is your current team? Where are you based out of?

The company’s corporate structure is based out of Singapore. But we are all in India for now. We have offices today in Chennai and Bangalore. We are a team of seven now. We plan to scale quite fast as we will launch our service in a couple of SE Asian countries before the end of Q3 this year.

How has been the mobile ad spends traction so far? 

 More and more brands are open to spending on the mobile platform primarily for 3 reasons:

  1. It is targeted
  2. It is a platform that the consumers use most
  3. It is ROI driven

We can see that the budgets are starting to shift from online to mobile as well as from conventional (TV/Print) to mobile.

What is your vision for 2014?

Our vision is to be the most effective digital advertising platform for advertisers who want guaranteed engagement for their targeted digital advertising campaigns. In 2014, we intend to acquire advertisers and users, secure Series A funding, expand engineering, product and marketing and get 1M users in 12 months’ time.