| 'What pleases me most is that response-sensitive small retailers are advertising on our media'
Punit Gupta, CEO, BEST TV, assumed the position in early December 2009. Before joining BEST TV, Gupta worked as CEO with a portfolio company that invested in consumer-focused businesses. Prior to that he was with McKinsey and Company in Mumbai and London where he led strategy, growth and business turnaround projects for clients in consumer goods, retail, private equity, IT and telecom sectors. He has also worked with Oracle Corporation and Andersen Business Consulting in India and the US. Gupta has set challenging goals for this company in year 2010 and is hopeful of surpassing them in view of BEST TV's strong comeback in the recent months. He shares the company's outlook for the near term in a conversation with network2media's Rajiv Raghunath. Excerpts:
You have not worked in the media industry before. So, what was the key factor that motivated you to join BEST TV?
At Mckinsey I have had the opportunity of consulting in the media space apart from working with consumer-facing companies. I found the media industry to be youthful and energetic and fun to be with. So, it is not an unfamiliar territory. Of course, my decision to join BEST TV was influenced by the company's strong fundamentals, scalability of the business, strong team and significant investor backing. You will perhaps know that we are backed by Intel Capital.
You have diverse industry experience. Does that give you added advantage in steering BEST TV's expansion plans?
Working in diverse areas gives you the opportunity to understand the different tools that may be employed for a company's vertical and horizontal growth. To cite one such experience, while I was with a PE firm, we did a deal for a distressed bank wherein we worked on both an organic growth strategy as well as acquisition of three other banks. All this had to be achieved in a relatively short time. As I said, the diverse industry experience has helped me to think through different business model and I am hopeful that the experience will come to bear at BEST TV.
How has the journey been for BEST TV and what is the key learning from the experience?
The journey has been up and down. When the business began, the advertisers had shown remarkable interest in the new media, to the point that the company achieved record revenue per bus. At that stage, BEST TV only covered 100 buses. But, as the business progressed, new realities emerged, one of which was the problem of wear and tear of the media equipment.
The buses are pressure cleaned which would cause certain wear and tear of our equipment. We had to revisit this issue to find a durable solution.
At the same time, BEST TV like many other companies was affected by the economic downturn. The increasing operational challenges, technological complexity and dipping advertising revenues posed great challenges for the company. But, I am happy to say that we have got past these challenges. The advertising revenue has picked up significantly and our media has gained reasonably wide acceptance in the market. Advertisers and planners are now earmarking a certain percentage of their ad spend for BEST TV.
Are you satisfied with the level of client response to BEST TV?
I am satisfied in parts. Some sectors have responded very well. For instance, media businesses like radio and television are advertising on our media in good numbers. FMCG advertisers are also looking at our media with long-term plans. What pleases me most is that small retailers in the city who are highly response-sensitive are advertising on our media. We are working out multi-year deals with the retailers. This amply demonstrates the efficacy of our network.
On the flip side though, big OOH spenders like telecom and financial services have not marked any great presence in our media.
You are operating in a niche area. What are the key differentiators of BEST TV vis-à-vis other DOOH formats?
There are several differentiators that one can talk about. We have a large daily captive audience of 50 lakh commuters, determined by the ticket sales. The figures are audited and certified. Also, BEST TV screens give audio output which helps the advertiser to connect better with the audience compared with the DOOH screens that are in the silent mode.
Research has shown that a commuter on an average spends 25 minutes in a bus, of which 10 minutes of this time is spent watching the TV displays. This is an endorsement of our high customer engagement.
Does this work as effectively in a crowded environment like it is in most buses?
Our research shows that it does.
What steps would you to take to retain your leadership in the transit OOH domain?
We have asserted our leadership in this domain by pursuing continuous improvements in our offerings. For instance, we are working on our programming formats.
We are also looking at the M&A opportunities in the market. The challenge lies in discovering a balance between the business of the particular entity and its valuation. Let me say that we are actively looking out for asset-based firms that are reasonably valued.
Industry research plays a key role in driving business. Have you initiated any particular research studies in your domain and how would disseminate the key findings to your target audience?
We have engaged IMRB for specific research projects. Now we are in discussions with a particular research firm for developing a weekly tracking system. This will help to maintain our leadership in the DOOH domain given that the industry as such has not given adequate attention to research.
Proprietary research has a high cost attached to it, so we are not so much into it. But, there are spinoffs from our research which we could share with the industry.
You are a Mumbai-centric in your operations. Do you have plans for geographical expansion? And which are your target cities or regions?
We are cautious in our geographical expansion and we would like to enter the metro markets where the ad dollars go. Delhi market is definitely on our agenda, given the new developments in the city ahead of the Commonwealth Games. But, whether we would enter the city before the Games is a decision we have not taken yet.
How to you propose to use technology to add value to your product offerings?
Technology is a focus area for us. There are three key technology pieces that we work with: GPS, GPRS and wi-fi. With GPS, we generate huge traffic data. The data also helps to develop location-based advertising solutions, with which as the bus approaches a store that has been mapped, the screen will display offers and schemes available at the particular store. The data generated by GPS could also be used for traffic management and by different government agencies. GPRS enables the advertising platform, while wi-fi exhilarates the uploading cycles.
BEST TV has a strong tech team. We work closely with the Intel tech team to develop innovative solutions. Technology is our biggest focus outside of our monetized business.
What in your view are the key growth drivers for the OOH industry, and the digital OOH segment in particular?
The key growth drivers are: acceptance of our media as a mainstream media, better auditability, and demonstrated customer engagement.
Where do you see BEST TV in the next 3-5 years?
In 3-5 years we should have grown from 3,000 screens now to 25,000 screens. We should have also gained possession of different asset classes in the transit media. We would like to see BEST TV become an iconic property.