Update:
Tushar Vyas, Director & CMO at SureWaves writes in to inform us that they are also “actively pursuing what can be called Spot TV opportunity i.e. local advertising and content insertion on Broadcast TV space at distribution points. SureWaves solution for Broadcasters allows seamless ad & content substitutions at MSO cable head-ends/ distribution points to pipe geo-targeted local ads or localized content within the national feeds. As you would know, Television is India is still largely analog – we have developed capability to address analog as well as digital systems. We are actively engaged with few leading broadcasters and MSO in field pilots. This is second solution from SureWaves after centrally managed digital Signage platform.”

Update: some interesting questions (via phone):

— How is the advertising being served at a local level? Are local ads being served on top of national level ads? Does regulation allow this?
— Is only remnant inventory being monetized by local advertising?
— What happens to advertising, which agencies have bought at a national level?

More questions? leave a comment, or mail nikhil@medianama.com

Earlier (29th April 2010): It’s been almost three years since we first read about Rediff Chairman and Managing Director Ajit Balakrishnan launching a new venture, seeking to “create a disruption in the TV industry using contemporary internet technologies.” VuBites, it appears, is it.

VuBites, set up as a separate company (VuBites India Pvt Ltd), addresses the television advertising business in India, and does two key things:

— Local Advertising In Cities: Keep in mind that local-city specific advertising or ad delivery does not exist in India, because broadcast and ad insertion takes place at a national level. While cable operators have run their own “channels” (often with pirated content), viewership has been slack, and advertising at a very small scale, often with neighborhood specific ads. TV channels distributed nationally attract more viewers, so the opportunity to run ads on them, hypothetically, is greater.

An implication of Cable TV in India becoming digital is that it can allow digital insertion of advertising on clean TV feeds. The business assumption here is that while for an advertiser, the cost of buying ads for a specific city is lower than a national campaign, the revenue – as a sum total of local advertising across cities – for a TV channel is higher than in case of a national campaign. This essentially broadens the advertiser base for a TV channel (greater competition, lower dependency), while also improving return on investment for an advertiser.

Source: Vubites

— Online Creation and Delivery of TV Ads: Vubites also allows advertisers to create an advertisement, buy a spot on TV in a city, and receive reports on delivery of the ad online. Online creation of video ads is not new: Jivox has had an Ad Builder for a few years now. This allows advertisers to reduce the cost of ad creation by using and editing stock video footage. Similarly, Vubites’ VuCreator also allows advertisers to create ads, but in broadcast quality, MPEG2 format. We’re not sure if VuCreator has free videos for usage, but the website does say that users can buy stock photos from their partners. VuBites allows the ease of buying spots using a previously aired campaign, much like the online space, as well as cancel campaigns.

However, it’s worth noting that not everything is digital or online: once a campaign has been booked, the user needs to send a signed hard copy of the Release Order before the deadline, for the activity to begin, and the company also retains the right to hold a campaign until a signed hard copy of the release order has been received. Do read their terms and conditions.

Both of these are seen as advantages of IPTV, which has failed to attract a mass audience in India, and lacks a sufficient base for location targeting on TV. Digital Cable can’t do personalized/behavioral targeting, which IPTV, with Internet-like analytics, can.

Competition: Amagi

AmagiVubites will compete with another startup, called Amagi. Amagi’s service is already operational in Ahmedabad, Hyderabad and Bangalore, covering Star News, and Aaj Tak and Headlines Today from TV Today. According to a tweet (screenshot) from Amagi’s Alistair D’Souza, “Amagi local ad insertion is started in Ahmedabad, Gandhinagar, Mehsana and most of North Gujarat going up till Mt. Abu”. A client: Kanva Shirts (screenshot). From Amagi’s website, details on how it works:

amagi how it works

Source: amagi

We wouldn’t be surprised if Vubites works the same way, apart from also enabling online creation and booking of advertising.

Futuregazing: An Auction Model?

One feature we might see emerge in the future, is the online integration of an auction system for buying ads on television, which Google had attempted (click here for a demo). That depends entirely on how the local advertising business scales, and whether it’s able to attract sufficient advertisers. One challenge that scale bring with it, is the content of the advertising might need to be approved before going on air: even now, VuBites’ terms and conditions clearly state: Any campaign/channel/ locality can be blocked basis the judgement of Vubites, broadcaster, the MSO or any relevant governing body. The user will be notified of the same as soon as possible.

Note: these are our observations. We’ve requested Rediff CEO Ajit Balakrishnan for an interview on the companys plans.