If efficiency is there then I don't mind paying programmatic tax: Atique Kazi, MD, Xaxis India

With global giants such as Facebook facing trial over data privacy and laws like the General Data Protection Regulation (GDPR) paving the way for more accountability and grievance redressal, the spotlight is on digital and digital advertising.

Atique Kazi of Xaxis India (GroupM’s outcomes-focused programmatic media company) spoke to BestMediaInfo.com about the current challenges plaguing the industry, how will the draft bill on data privacy change the digital advertising landscape in India and the new trends the industry can look forward to.

Kazi, who joined Xaxis India as National Director from Yahoo, was elevated to the position of Managing Director last year.

Excerpts:

You deal in data and data pool. How has GDPR impacted you? How much effect is expected from the draft bill on data privacy in India?

The GDPR governance is for EU and, therefore, the impact on Xaxis India’s business has been very limited. But a lot of companies in India have taken proactive steps and made themselves GDPR compliant. The impact, especially for us, was on a few campaigns which were targeted to the EU region. They were put on hold for some time till the required changes were made and that was really the only impact.

As far as the draft bill on data privacy is concerned, it is a promising step forward. As a market, we definitely need the right data laws and more importantly we need good governance around it. What I have excerpted out of the draft bill is that consent, compliance and conflict will be the three key areas. In terms of consent it is completely about understanding how a consumer’s data is being used. It will bring in transparency and give control to users in terms of how data about them is being collected and used. In terms of compliance, it is about setting up the right rules of engagement when it comes to data. The third aspect is conflict. When one sees something going wrong today, there is no solidified law that one can turn to, but once the law comes in, I believe it will articulate what legal recourse can one resort to in case things go wrong.

Programmatic advertising has a lot of leakage. One of the emarketer.com reports suggested that only 40% of the client's money goes to the publisher and 5% to the AoR. Rest 55% goes to the DSP, trading desks, SSP, etc. When can transparency be expected in programmatic space buying?

Of what I have seen in India, the numbers vary a lot. It depends on what kind of programmatic set-up has been deployed, what kind of measurement and data companies are used and many other factors. I really encourage the market to evaluate the programmatic cost it is paying, against the efficiency it brings in the campaign. We need to focus on whether the cost is bringing in efficiency. If efficiency is there then I don’t mind paying the programmatic tax.

I don’t see transparency as an issue out here. It is more about asking the right questions. As a buyer/client, one needs to ask the right set of questions to uncover all the charges, and for that it’s good to be well versed with programmatic value chain.

The usage of AI in digital advertising is still not as widespread as much as it is talked about. Are any specific factors holding it back?

In content and advertising, AI has been mainly around us in the form of personalisation. AI usually has to be executed in a very implicit and seamless way. Many publishers are using AI today to serve users personalised content and advertising. At Xaxis, we deploy our proprietary AI technology called ‘Copilot’ on many campaigns globally. So, there is adoption but having said that, a lot of technology companies have to really open up their codes to AI.

Coming to the factors holding AI back, one of them is mindset — there is this fear of what will happen if the AI model goes wrong and people also find it too technical. The other factor would be availability of data and the right user permission to use it. Most importantly, talent is a big problem. Data scientists are difficult to find, and few can understand how advertising and marketing. People also want immediate results and that can be a problem.

In the name of digital agencies, small shops are being set up in every lane of the city. When and how much consolidation do you see happening? Will the network agencies be the only survivors say, five years from now?

Some boutique digital agencies are creating amazing work and I see that they are very close to the client. However, what I have also observed in the last five years that I have been in the market is that they face challenges when it comes to talent retention. Many also face financial and cash flow issues. They also struggle in terms of leveraging ideas and collective trading and the need of global network. I don’t know if consolidation is the way ahead but I believe the larger network agencies will start operating like small shops going forward.

You have, in your many previous lectures, talks and even blogs, advocated for how India is gearing up and embracing digital advertising faster than its growth elsewhere. Is the backing out of people like P&G and HUL a deterrent to the growth? While P&G has returned to the medium, it has not been as rampant in the usage of the medium, as it was doing earlier.

Digital advertising in India is definitely growing and faster than any other English-speaking market. I feel that the challenge we face today is measurement and attribution. What matters to a brand manager is outcome; and not digital advertising outputs like CTRs, view rates, CPVs, etc. Any brand going off or low on the digital medium for a short period is likely finding answers on how to measure digital investments or re-shaping their digital advertising strategy. The audiences are on digital; we just have to continue to find better and accountable ways to reach them.

Globally, one set of audience who could 'most obviously' be found on digital were millennial parents or first-time parents. Isn't India different in this sense? Any specific trends that you have identified for this segment of audience?

India leads the globe when it comes to millennials. Approximately 26% to 28% of India’s population are millennials and 80% of them currently live with their parents, according to a study. This means many of this age-group will transition into their new life stages which would attract independent housing needs, marriages, children and all other related buying decisions that come with it.

This demo now has great spending power, is most connected on digital and defining the new and young India. A lot of marketing science works goes in understanding and decoding the behaviour of this age group.

Being a millennial first-time parent myself, I can tell where my age group will add more online on-demand video consumption not only for ourselves, but for our kids too. We will also drive the world into omnichannel approach.

You recently partnered with Vidooly for a brand safety tool. What does this tool protect the brand exactly from? Do you have similar tools elsewhere in the world? Why does India need it?

Brand safety and brand adjacency is very important for us. 100% Brand safety on open network cannot be guaranteed but can be increased if we are aware and in control where the ad is running. We do everything possible to ensure that this done with all the resources and guidelines available.

Partnering with Vidooly is such an initiative.

The tool helps analyse select YouTube content to ensure contextual safety for specific brand values, enabling the prevention of ad placement in or adjacent to content that could affect brand’s reputations.

The understanding of select YouTube channels which it provides, helps in better targeting choices too.

Trends for 2019-2020 on digital advertising in India?

The next big thing for me on digital would be democratisation of data. AI and machine learning are also going to be big when it comes to digital advertising. I also see measurability and accountability being questioned in digital media and the focus will shift from output of digital advertising to the outcome of digital advertising. I also see video CPM’s going further down, maybe similar to large banner CPM’s on quality sites and newer digital buying currencies will evolve on digital.

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