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In a pivot, it's tough to get people to turn around:Ozone Media CEO

One of the things we were fortunate with is that Ozone Media has been dominant in the India market for long. We are aware of what is happening in the market.

twitter-logoTaslima Khan | August 7, 2014 | Updated 16:58 IST
Kiran Gopinath, CEO Ozone Media

Q Ozone started as an ad network. How have you evolved?

A We started out with the pure ad network model in 2006. The ad network model at that time meant you aggregate media space from publishers and use the technology called ad serving technology to target users and sell that to advertisers. What happened in that model was that you had a publisher management team which would go out and acquire publishers and bring them into the network.

Secondly, it would also manage campaigns on their platforms and their payouts. And then we had a sales team which would sell this space to advertisers and an accounts management team that would manage these campaigns on the network. In the middle we had an ad operations team which would load all these campaigns on the server and then serve ads based on what targeting criteria need to be met.

That was the model that was there for a long time over the last decade. Now if you had to scale that model and expand to, let's say Singapore, you literally had to follow a cookie-cutter model wherein you had to replicate the entire thing in Singapore. The only thing that you could use seamlessly was the ad serving technology.

But other than that you need to set up a publishers acquisition team and a sales team in that market. Somewhere in the middle you could hope to get cross-utilisation of the inventory in India and Singapore. Therefore, this model gave rise to a possibility of ad networks that had to expand, acquiring ad networks there.

Q What did you see changing?

A What happened towards the latter half of the last decade is that you had an exchange called Right Media which came about. What these people started doing was link all these sources of inventory together and all sources of advertisers together.

You could get in touch with another ad network and source inventory with another ad network if you didn't have your own inventory. And then Right Media was bought out by Yahoo. But that model then evolved into something better.

There came demand-side platforms (DSPs), which could hook into these exchanges and then source inventory, and then there came supply-side platforms (SSPs) that were helping publishers link up with many ad networks that were there. These SSPs can help publishers decide which ad network to work with -Ozone or Tyroo, someone who can help them get maximum revenues - their major concern. So publishers could choose and switch between them.

So the SSPs became aggregators of publishers on one end and DSPs became aggregators of advertisers on the other end. And DSPs and SSPs gave rise to ad exchanges. One of the prominent ones, AppNexus, was part of the team of Right Media when it was bought out.

In the process, if you think above 33,000 feet, there was a democratization of inventory. Anybody sitting in a small village or town can access inventory anywhere else in the world. So the ad network model was more region-centric and so went out of the window with the advent of all these ad exchanges as sources of inventory. 

Watch video: Our company has grown phenomenally since we pivoted: K.Gopinath

Q How have ad exchanges changed the game?

A Pubmatic is a supply-side platform. So they bring in all the inventory and an ad network like us can hook in and buy inventory from them. Or if I am a trading desk, I can hook into Pubmatic and buy inventory. If I am a DSP, I can hook into Pubmatic and buy.

What happens at exchanges like AppNexus it that they have became an aggregator for all. So you have SSPs like Pubmatic and RubiconProject hooked into them. And on the other side you have Turn, MediaMath or OzoneMedia plugged into it.

It becomes an exchange wherein you have both inventory and campaigns from advertisers and one can start trading on the platform which makes it very easy. So it becomes a place where people can come to push their campaigns and for publishers to choose which are the best campaigns that can promise maximum revenues.

They can look at and pick up campaigns in real time that make sense for them, anywhere in the world. Most publishers have inventories across the world, so you can make money out of it, which you couldn't do earlier. So this whole democratization has changed the whole landscape of digital advertising.

So if you have to be a player in this space, you cannot be limited to a region anymore. This is how things are changing completely. We saw this coming a few years ago. We started working with multiple exchanges. India has been a tough market in the sense that we were not getting paid in time, so the whole system was getting affected.

A mix of all this was affecting us including, of course, what was happening globally. It made sense for us to pivot completely from just being an ad network to becoming an ad technology and programmatic company.

Q When did you actually get a hint of how things were going to change from here?

A That was 2012 and we finally started making changes towards the end of 2012 in the organisation. An ad network is basically a huge sales organisation and since we were to pivot completely from there, we had to let go people and bring in more engineers and product managers.

Q What were the key changes you were seeing in 2012?

A We looked at the new technologies coming into play. We saw the rise of DSPs and SSPs. Companies like Turn, MediaMath, RubiconProject, AppNexus were becoming strong. Google itself is a very powerful exchange and it bought out a couple of companies, both SSPs and DSPs. India is a little slow to see these changes.

Q Being the CEO of the company, how did you spot change?

A One of the things we were fortunate with is that Ozone Media has been dominant in the India market for long. We are aware of what is happening in the market. Even earlier in 2010, DSPs and SSPs started becoming prominent. One of the things we did since the beginning was to keep trying out many things.

We never really stuck to one business model to be working on the whole of our lives. We kept tinkering on mobile and video technologies right from 2007. We got into programmatic way ahead of time in 2012. Our programmatic media revenues started scaling up in January 2013. That was enough reason for us to believe that this was something that will work for us. We were earlier sourcing inventory from a set number of publishers and selling it to advertisers.

What we moved on to being is to source inventory from other aggregators as well. Also, selling inventory not just to advertisors but also other aggregators. That scaled the business quite significantly. That's growing phenomenally well for us.

Q Until 2012, when you were just an ad network, what was the scale of the business?

A We didn't scale down the India network business until March 2014 when we shut it down completely. That was not scaling beyond a certain point. In terms of publishers we had about 2,000 and advertisers we had about 200 of them on board. We brought down this model completely.

QWhat is the biggest advantage of this shift?

A We get paid on time and hence can pay our partners in time. It often took six months for advertisers to pay in India. Our cash flows are much better. Also, the biggest advantage is scale. We are able to play globally now.

Q What were the internal changes you had to bring about?

A We changed the culture in the organisation. We were earlier a huge sales organisation with total head count of 73 till December 2012. We brought it down to about 40. It is a totally different set of people. We have engineers, product managers and all of that. A sales organisation is very different from a technology company. The way we operate has changed. We are very global in nature in terms of revenues and clientele and partners. Now 75 per cent of our revenue comes from the US. We are on course to be around $100 million by 2016.

Q How important it is to make a timely pivot.If you did it two years later, what would have happened?

A I have seen in the past that the pace of change as it happens has increased drastically. So you have to be really in tune with what's happening. You can't sit back and say, 'you know what, this is going to continue for the next three years'. You have to be on your toes, see how things are changing and push really hard. If you don't listen to signals or you ignore them, you get killed or you are completely redundant. You have to keep adapting.

Q Does a pivot also mean changes in terms of the people? Who would you value more in the company now?

A You are right. We value our engineers, our products person, the ad operations guy who is at the centre of programmatic.  

Q What is the biggest road block for a company to be thinking in terms of effecting a pivot? Do you face a lot of contradictory forces within the company for you to take such a decision?

A I think whenever you are making a huge change, it is very difficult to get people to turn around. People don't believe in what's going to happen. There will be many people who are comfortable doing what they are and think that is what they are going to do for the rest of our lives. It's very painful because you have to just let them go. But you have to try your best to get them to pivot. Actually, very few people manage to do that out of a pivot. A majority of them are still in the state of disbelief and disagreement about what's going to change. They will wake up only when they see the whole world shifting in that direction, which can be late.

Q What are the three successful strategies to make a pivot happen?

A
I think you have to look at what market are you really going to look at. You have to look at a global play and whether it is a pivot that can scale up. Then you have to look at what people you have and what you would need to get on board. Also, you have to be a little unemotional about the change. It doesn't feel good really, but from a business stand point you really have to see what value does it create for you and your investors. You try and retrain your people but you may have to restart with your team all over again.

Q Will it also get to a point when some people will like to leave because they become insecure about what's going to happen next?

A Yes, it does. People are nervous. When we were deciding to move out of India for the ad network business, a lot of people were jittery. They were people who said, 'you know what, this is going to be a disaster'. People don't really look at the writing on the wall - the numbers are going down and this is the business which is going to go down.

That's fine, you just have to let them go. You can go ahead only with people who believe in what you are building next. You really can't afford to have those people around because they are going to slow you down. Sometimes, the best idea is to get fresh people into the organisation and to build your organisation all over again.

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