Chetan Kulkarni, Gourav Chindlur and Vikram Nayak were colleagues at the Bengaluru office of Austin, Texas-based software firm Trilogy, where daily discussions at lunch would revolve around Bollywood and cricket, with some tech ideas thrown in. Kulkarni, who had completed his engineering in computer science from NIT Surathkal and MBA from IIM Lucknow, had joined Trilogy in 2004. Nayak, with a masters degree from IIT, also joined around the same time. Chindlur, an engineer and MBA from IIM Kozhikode, had just joined the firm in 2007.
As they were exposed to various aspects of internet advertising and building email marketing platforms and behavioural targeting products, the trio, then in their early 30s, sensed that digital media would grow into a huge business in the coming years. By July 2008, they had all quit their jobs at Trilogy, and by December launched their company, Vizury, which, according to the company, means “doing good” in Swahili. “We knew there can be a lot of opportunities, at the intersection of data, technology and marketing, and that is the area we chose,” says Kulkarni, CEO, Vizury.
The idea was to solve a very basic problem that advertisers faced in driving online sales — many buyers simply drop off at the checkout stage. “We wanted to help advertisers get a sense of their digital data and use it to power their own marketing conversations across digital channels with the end goal of having one-to-one conversations with the customer,” points out Chindlur, chief operating officer, Vizury. Simply put, the product, visitor relationship management, helps companies find out who visits their website, what products or services they check or view, and at what point they dropped off without making a purchase. It also helps advertisers analyse the tons of digital data that already resides within their systems, and based on the insights culled out, the platform delivers relevant ads on a real time basis.
For instance, if a customer checks the fares for an air ticket from Chennai to San Francisco on travel portal makemytrip, and drops off without booking the ticket, Vizury assigns a cookie or an alphanumeric code to the user. It then alerts all its media partners such as Google, Yahoo, MSN and Facebook to inform the Vizury server the next time the user comes online. When the user gets online next, the ad servers at Google or MSN inform Vizury’s server that the user with that particular code is online and the company’s ad server then puts together an ad or a latest offer for the Chennai-San Francisco route from makemytrip. All this happens in real time, in about 12 milliseconds, as the user is browsing the web. “This level of personalisation allows advertisers the flexibility to give customised offers or recommendations to their potential customers by aligning their campaigns to their individual needs,” explains Nayak, chief technology officer, Vizury. If that smacks a bit too much of Big Brother watching, Nayak is quick to reassure. As far as privacy concerns go, the company uses anonymous cookies that don’t have personally assignable data, and users always have the choice of opting out of the ad.
Unlike some media companies, Vizury does not buy inventory on ad networks beforehand. It uses real time bidding (RTB). Here, the algorithm that it has built will assign a probability to the buyer going ahead with the transaction, based on how many times he viewed the ad or checked out fares for the sector or going by his previous transactions. If the probability of the transaction is high, then it bids higher for the ad space but if the probability is low, then it has the option of not bidding for the space or bidding lower.
Vizury offers clients a performance-based platform, which means it earns a commission on every sale it makes. In most cases, it gets paid only when a user transacts on its customers’ websites. “We are not there to take away their marketing budget. We want to create a long-term customer engagement and sales channel,” says Kulkarni. Right now, the focus is on websites and banner advertisements. For every 100 viewers who see an online advertisement, only one goes on to click on it and even fewer go on to complete a transaction. The challenge with banner advertising has been that of relevance. But now, display advertising is more data driven. By placing the right ads at the right place at the right time, the worth of those impressions can definitely go up. Vizury’s re-targeting software helps advertisers convert more of their prospects, increasing their online revenues. “We contribute about 3-8% of revenues on their websites,” says Kulkarni.
While it started with the Indian market, the company soon discovered greater demand overseas for its product. Vizury now gets 75% of its revenues from international markets and has offices in Dubai, Beijing, Sydney, Sao Paulo and Tokyo. Kulkarni explains the company has followed a strategic decision to be present only in markets where it can be the leader. As a result, in some countries such as the Netherlands, Spain and Italy, where it could not scale up operations to desired levels as some partnerships didn’t work out, it exited within six months.
Apart from the usual challenges of adapting to the new environment of a country it enters and hiring local talent in large numbers, the company ensures that its content is tweaked in line with the local culture so that it puts out more relevant ads online.
Surprisingly, the company is yet to make a foray into the US, which is considered the world’s largest digital marketing destination globally, with an estimated size of $8-10 billion. “We wanted to enter the US when we started but we did not have the money. We then felt it was better to address markets where we could be market leaders rather than be the fourth or fifth company in the US,” explains Kulkarni. Now, with a stronger brand, a larger international presence and a product that has been tried and tested, the company is planning its US foray soon.
Vizury’s business model pits it in direct competition with Google and others such as myThings in the UK, Criteo in France and Sociomatic in Germany. It competes with these firms in Brazil and China, as well. “Google is an ecosystem and you have to live in it and prosper in it,” says Kulkarni, who believes there are gaps in the internet ecosystem that need to be plugged. “Our bet is that Vizury can build a niche out here,” he says. From its first domestic client, Cleartrip, it has gone on to add over 500 clients to its portfolio, including airline majors Jet Airways, Eithad, Virgin Atlantic, travel sites such as Expedia, Makemytrip and leading e-commerce companies like Jabong , Snapdeal and Flipkart. Its overseas customers include travel site Ctrip in China, Netshoes in Brazil that sells sporting goods, and Souq, an e-commerce site in the UAE.
Growing up pangs
It was a struggle when the company started out, though, as 2008 was certainly not the best time to start a business. And, with the global financial crisis unfolding at the time, raising money from venture capitalists was tough. “There were times when we started to question whether we were in the market at the right time or if the product was relevant, but we never wanted to give up on the idea,” says Chindlur. However, they managed to raise funding of $150,000 from family and friends, in 2009.
The next year, Vizury raised $2 million from Ojas Ventures and Inventus Capital. “We did take some time to wrap our heads around their business model. Having said that, we are very impressed with how Vizury has managed to scale up its business in the last couple of years,” says Parag Dhol, managing director, Inventus Capital. A third round of funding worth $9 million came in October 2012, and was led by Nokia Growth Partners along with the existing investors, Ojas and Inventus.
The company is now looking to extend its proposition to mobile devices. “We are going wherever data is generated,” says Nayak. “We definitely have plans to do something around mobile in the coming months.” Most of Vizury’s corporate clients have customers who are increasingly accessing their website or making transactions on their mobile phones and tablets. In the case of travel portal Expedia, which is a client, as much as 30% of traffic is from mobile devices and 12% of transactions take place through the mobile phone.
Building a global company out of India has never been easy but a few such as inMobi, Druva, Mu Sigma, Zoho and Vizury have managed to do that, and the rewards are much higher. Vizury has grown over 200 times in revenues since it started, albeit on a lower base. With annual revenues of around $20 million (75% from overseas operations), and a team of 150, its founders hope to maintain the revenue growth momentum during the next couple of years as well. “We have just seeded many of the international markets, and this year we expect a lot of growth to come from these markets,” says Kulkarni. Vizury’s promoters estimate the market opportunity to reach $2-3 billion in Japan and China by 2015, and $1-2 billion in Australia and Brazil around the same time. With more and more companies increasing their digital advertising spends to reach their customers in real time, things appear to be on target for Vizury.