Oct 16, 2017

Inside Ola’s ambitions to build Play into India’s biggest out of home advertising platform

BYSunny Sen

Bhavish Aggarwal, co-founder and CEO of cab-hailing firm Ola, is quietly working towards building a large advertising business with Ola Play, a project that company insiders say is No. 1 priority for him.
“The real play is advertising… Bhavish wants to create the country’s largest out-of-home (OOH) advertising business with Ola Play,” said a source familiar with Aggarwal’s plans.
Ola has installed more than 50,000 tablets in its cars, which plays movies, sports, serials, and music. It has also partnered with Saregama, YupTV, Hungama, among a dozen production companies to create bespoke content for its commuters.
“Work on [the OOH ad business] has already started… The time of the launch has not yet been decided by the company yet,” a second company source, who is not authorised to talk to the media, said.
Ola Play is the taxi aggregator’s in-car entertainment device, like the ones available on flights. It is limited to audio and video entertainment with features that allow riders to control air conditioning and other car features, as announced last year, yet to be introduced.
An email sent to Ola requesting comments for this story was not replied to.
Ola's soaring losses
Aggarwal’s ambition to monetize Ola Play is aimed at reducing losses at Ola, which has its bottomline in red as it battles American rival Uber for control over the Indian cab-hailing business. As per its last filing with the Registrar of Companies (RoC), Ola reported Rs 2,314 crore of losses on revenues of Rs 758 crore in the year to end-March 2016.
The Ola CEO hopes that Ola Play content will create stickiness and allow personalisation, which brands will pay for targeted advertisements. The OOH industry, while small, is growing rapidly — it is expected to become Rs 3,640 crore by 2020 from Rs 2,610 crore in 2016.
According to KPMG’s latest media and entertainment report, OOH will grow at a CAGR of 11.8% in the coming years, especially due to development of regional airports, privatisation of railway stations, setting up of new business and industrial centres, growth in smart cities, and increasing focus on brands on OOH.

Art of Personalisation

FactorDaily had reported last week that Ola is coming out with a new app, a new service, a bunch of new features, and a redesigned logo. The company is building technologies that will create profiles of riders who use Ola Play. What content they like to view, how many times, how they use the app, the places a person visits, and demographics, will be captured and stored in the cloud.
“When the person takes a new ride, he will be able to watch the movie from exactly the same place where he last stopped it at when his last ride ended… the car temperature will automatically set itself depending on preferences,” said the first source. “That’s the whole philosophy of a connected car.”
Between this content, Ola hopes to place digital ads that may even be interactive. “Over time, Ola Play can become your personal PC, where you can work on Play and store the work in the cloud,” the source added.

Ad industry veterans think it’s a good move. “Just like every part of a consumer’s journey in his/her day is replete with opportunities for brands to build engagement, this move by Ola is an interesting way to engage an important part of a consumer’s day: transit,” said Pooja Jauhari, CEO of digital marketing agency The Glitch.
Jauhari pointed out that it will be important that ads should be customised. “There are two ways to look at it when we look at consumers: short and snappy content that shows enough value for the busy transit traveller to register and branded content for the leisurely consumer who likes longer forms of storytelling,” she said.
Some of the other factors that will define how much the ad is viewed will be the the time of the day and distance travelled.
Unlike other OOH platform, Ola Play presents the opportunities of personalisation and interactivity. For example, if Amazon is running an ad and the commuter wants to buy something or if the commuter wants to buy a movie ticket after seeing a PVR ad.

Scaling up Ola Play

The bigger question, however, remains why will brands go to Ola, and not just a Google or a Facebook. As far as screens are concerned, the market is highly fragmented with screens in hospitals, bars, hotels, and even at quick-service restaurants like McDonald’s.
Ola wants to play on the network effect. “In the next one year Ola plans to have more than a lakh screen in the cars with Play,” said the second source.
Do the math: Aggarwal is looking at six to seven lakh rides a day on cars with Play. That’s 18-21 million rides a month. To be sure, that is smaller than the market of 300 million smartphones but is a number significant enough to be monetized.
“Ola will provide a captive viewer during the 30 minutes to one hour. For advertisers, it’s one more medium of advertising. Riders don’t mind as they are already stuck in a car on a trip,” said Arvind Singhal, chairman of marketing and retail consultancy Technopak.
Aggarwal wants to build a fleet of a million cars — up from the nearly half million now. Once that target is met, Ola will be naturally on the radar for large national advertisers, said the second source.

One expert questioned the Ola strategy of chasing advertising pointing out the ad business and the cab business are as different as chalk and cheese. “Netflix has spent hundreds of crores to build a streaming business, advertising is at the core of Google’s and Facebook’ strategies, and all these are complex businesses. Ola’s core business is cabs, which is also difficult and the company is burning millions of dollars. Do they have the bandwidth to start an advertising business,” asked Harminder Sahni, founder, Wazir Advisors, a marketing and brand consultancy.
That only time will tell. If Aggarwal cracks this, Ola will be rivalling not just Uber but also Google and Facebook, along with dozens of small OOH companies.

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Sunny Sen is a writer of FactorDaily.