In an exclusive interview with SME Times, KA Srinivasan, Co-Founder, Amagi Media Labs Pvt. Ltd said the small and medium enterprises (SMEs) in the country can now advertise on national TV channels along with big brands of India by spending a tiny fraction of their budgets. By eliminating spillage and focusing on TV advertising, SME's can significantly save costs and build their brand on best of the TV channels targeting their region.

Could you tell our readers about Amagi Media and its profile?
KA Srinivasan: We, at Amagi, make TV advertising smarter. Amagi brings the best of the TV channels to regional businesses at costs lower than a radio spot .We do this by 'targeting' the ads locally, very much like split-runs on newspapers where you can buy ad space on a local edition instead of buying ad space on national edition. We have partnered with a number of TV channels to buy spots nationally from them and then use our technology to split those spots by region & sell these regional/local spots at a fraction of the national rate. So, for an SME, a TV ad spot can now cost upto 80-90% lesser compared to a national TV spot, often making it even cheaper than a radio-spot locally.

Amagi was founded in 2008 and is currently available in 35 cities across India with a bouquet of national TV channels in movies, music, lifestyle, news in both Hindi and regional languages including regional GEC. Hundreds of advertisers across India have been advertising using Amagi to reach local audience at an ultra-low-cost.

Tell me more about Amagi Media's product and how it will help SME in creating a new way of advertising on TV?
KA Srinivasan: Think of being able to advertise on top TV channels along with big brands of India, but spending a tiny fraction of their budgets. That is what we offer to the customers. TV is the most powerful medium and has the highest reach across all media in India, and yet, it has always been wasteful and expensive. By eliminating spillage and making TV advertising targeted, SME's now can significantly save costs and build their brand on best of the TV channels targeting their region.

Amagi, through its proprietary, patent-pending technology splits a national TV ad spot into multiple regions and allow an SME to buy only a regional spot instead of a national spot. This fundamentally changes the way TV advertising has been done in India. Our mission is to make TV advertising affordable and bring it to the reach of every business in India.

It usually becomes difficult for the small businesses in the country to build their brand on the best of the TV channels. Is this trend changing at present?
KA Srinivasan: TV, being a broadcast media, has always been expensive for smaller businesses to leverage. With availability of more regional channels as well as Amagi's option of targeted ads, SMEs now have started adding TV to their media plans - in fact, sectors like local FMCG, consumer durables, educational institutes, TMT manufacturers and local durable vendors have flocked to TV by increasing their share of advertising on TV significantly. If you look at the broad advertising spends across India, you see the growth of local and SME businesses on TV fueling the media market. A lot of one-time regional SMEs have now grown dramatically by being able to focus on there marketing and advertising strongly. There are a number of case studies on businesses like Pothy's or Lion dates, which used TV to build strong brands and grow exponentially in terms of revenues.

Usually, SMEs are unaware of brand building, marketing and advertising. What is your take on this?
KA Srinivasan: Often, marketing and branding are an after-thought for business owners - we will use whatever is left-over after expenses for marketing and advertising. SME's will remain small if they don't think and invest in marketing and promotion. Marketing and advertising are an investment, not an expense. Advertising and promotion go a long way in laying the foundation for the small business to grow quicker and stronger. Unfortunately, some SMEs don't spend enough time & energy thinking about brand building, marketing and advertising leaving them in an eternal trap of no money and so they cannot spend on branding and hence they have no money. However, we are starting to see a change in the attitudes of entrepreneurs. They are looking for a growth platform to not just build their brand, but to get sustained increase in sales. By being smart about their spends and planning, business owners can ensure the best return on their marketing spends.

Is financial constraint a major issue for SME in India to promote themselves?
KA Srinivasan:  In reality, I would say that financial constraints are hardly an issue for promotion. For example, with Amagi smart advertising platform, a 10-second spot on some of India's premium channels could cost only a few hundred rupees in the local region; for a budget of Rs. 50,000, a business can often do a multi-week campaign locally on these channels. It is mainly an issue of awareness of options available and how to spend smartly - the budget often doesn't matter. You need to look at maximizing returns on the budget you have rather than just assuming that advertising is expensive and for the big businesses only. Of course, the other big issue with TV advertising is making the TV commercial (or the ad) - this often tends to be expensive. To address this, we provide creative services as a value-added service to our customers so that they can get high-quality TV commercials as part of the media package.

How much growth have you witnessed in the advertising industry? Is there any change in the trend or medium of advertising?
KA Srinivasan: We have grown at a rate of around 500% for the last 2 years and are well on our way to grow again this year by more than 400%. Significant part of this growth is coming from regional advertisers shifting from non-TV (including print, outdoor and radio) to TV. Worldwide, TV plays a big role in SME advertising - more than Rs. 30,000 crores is spent on spot cable advertising (like what Amagi provides) in US, almost all of it from local/regional businesses. We expect to see this happening in India as well with SMEs/regional businesses contributing 15-20% of total TV advertising pie going forward.

Are you planning to capture the online medium of advertising, which is in boom at the moment?
KA Srinivasan: We are currently focusing solely on targeted TV advertising as we believe there is a huge gap to be addressed here and hence are focusing on TV.

(Namrata Kath Hazarika can be contacted at namratakh@tradeindia.com)