Amagi, one of the three companies seeding the localization of television advertising in India, has raised Rs 25 crore (around $5.4 million) from the Nadathur Group, reports Livemint, taking the total funds raised from the Nadathur Group to Rs 37 crore (around $8 million.

What They Do

Amagi – and competitors SureWaves and (Rediff owned) Vubites – allow local, city based advertisers to buy ad spots on TV channels in India, potentially increasing monetization for Multi System Operators (MSOs) and television channels. In India, advertisements on TV are typically placed at a national level and then broadcast across the country, making the channels dependent on a small set of media planning agencies, reducing the flexibility in targeting ads to a particular set of consumers, and at the same time, due to the high cost of advertising, making TV advertising out of the reach of many local businesses. With digitization, these businesses are trying to help expand the advertiser base for channels, and help them monetize the ads which are otherwise used for house inventory.

Amagi makes another pitch: targeting national advertisers who have otherwise launched a single ad on multiple channels, or released different ads on different channels. Amagi rightly suggests that they can serve different variants of ads for different regions in India, in the same ad spot on the same channel.

The challenge, in my opinion, is currently one of creating a market. The race is now one of a landgrab – expanding to multiple cities, bringing channels, cable operators and MSOs on board, and once there is inventory, building out sales to sell to local advertisers on board. There is an interesting problem here which Rediff and Vubites appear to be addressing differently – the creation of a video ad for TV. Vubites has an online ad creation tool called Vuplanner, while Amagi has an ad-creation team (according to its website) for first time advertisers.

Stats

Based on media reports, this how the companies stand:
– Amagi: 22 cities, 400 advertisers, 11 broadcasters, targeting 100 cities.
– Vubites: 6 cities, 9 cable operators, targeting 100 cities (our report on Rediff’s Vubites acquisition)
– Surewaves: Tie-up with Asianet in Kerala. Very little information on the company, apart from the fundraising announcements.

The Challenge

A potential spanner in the works for the Spot TV businesses is if the channels see the opportunity in this business, and start addressing the issues with localization of TV at the source. Instead of allowing Amagi to insert ads at the MSO level, broadcasters can move their delivery of channels to the cloud, and feed different streams to different MSOs and Cable operators. Star India is moving its content to the cloud, for enabling digital delivery to multiple devices – why not to MSOs?