Ringing in the new

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Paytunes’ technology is ringtone advertising with a difference. What are its prospects?

After a little over a year of operations, Gaurav Tiwari, Chief Business Officer and co-founder of Paytunes, an Android-only app that gives users incentives for listening to ad campaigns, is convinced that his business is getting things right. Paytunes enables brands’ jingles to become the ringtone when users get calls. They are then rewarded with points that can be accumulated and redeemed for recharges, payments or gadgets. Recently, Star TV ran a campaign for its new show Naamkaran on the app, targeting one lakh users, with a ‘Save (show time) to Calendar’ call. Over 3,000 saved it, despite no incentive being offered. This, says Tiwari, is an indication of the business strategy’s success.

India has 50 crore mobile phone users, of whom around 20 crore are using smartphones, and spending three hours on them daily, on average, says Tiwari, citing research. India is now the second-largest smartphone market. Seventy-five per cent of these smartphone users are under 30. The migration to smartphones is rapid; there are models available for as little as ₹1,500 now. In the next five years, a Cisco study predicts, the number of smartphones in India will reach 650 million. The smartphone is overtaking TV and movies as the medium of entertainment so it follows that advertisers should move there, but it’s not. Mobile advertising in India, according to eMarketer, would account for 3.3 per cent of total ad spend in 2016 and 10 per cent in 2020.

The challenge, says Tiwari, is that mobile advertising in video format is not feasible as it consumes data and energy. “Ninety-five per cent of the ads on smartphones are banners and people are neutral to them. That’s where we step in,” he says. A cache-based app, Paytunes delivers audio first, a visual next and then a call to action. Only at this stage is internet required. There’s no other app that uses the same model as Paytunes yet, though there are music apps that deliver audio ads between songs, but users are very unlikely to click on an ad between the songs they are listening.

Reach matters

Users are generally between 16 and 33 years of age. Tiwari says research has shown that the ad reaches at least six people in the vicinity when the user’s phone rings. And users begin humming the jingles. Paytunes’ incentives come with some riders, of course. The user needs to let the phone ring at least for seven seconds, keep volume high, answer the phone and talk for at least 10 seconds. Advertisers are charged (30 paise) only when the user gets points.

The downside of incentives

Of 8 lakh users who downloaded the app, 5 lakh have stuck with it, says Tiwari. Incentivised apps are problematic, says Anurag Gupta, Managing Director of digital media and marketing solutions platform DGM India. They tend to be uninstalled sooner or later. Traditional marketers such as FMCG companies tend to stay away from advertising on such media. There are more transactions on an app that is installed despite the lack of incentives. Paytunes could be a good option if it can progress to driving transactions, and if it can prove effective at increasing top of mind recall and brand lift.

Arun Tyagi, Founder, 361 Degree Entertainment & Media, who has used Paytunes for his clients, says it is a credible proposition as people get 20-30 calls a day, and suitable if advertisers want to geo-target audiences. However, it’s difficult to convince the brand managers to advertise here as the subscriber base is not large enough. If they have all the subscribers of one telecom company on their database, say, that would make a difference, he believes.

Priyanka Shah, Director – Mobile (West/South) at digital marketing agency Isobar, who plans to use it next month, says Paytunes blends well as an option for brands wanting to maximise reach and create distinctive recall. The ability to build regional language audio creatives are possibilities but the lack of interactivity is a concern, according to her.

Paytunes has received $600,000 in two rounds of funding from CIO Angel Network and Indian Angel Network but is on the lookout for more. Tiwari says they do not have enough money to raise too many users. “The more people you reach out to through advertising, the more they will download. That depends on the kind of money we spend. We haven’t done any radio or TV advertising.”

Published on January 13, 2017

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