Airtel’s big ambitions for its ad business

Airtel Digital, the telco’s unit focusing on digital initiatives, is aiming to run over 3,000 campaigns for leading brands, beginning with the auto and fast-moving consumer goods (FMCG) sectors, before expanding to other industries, a top executive said.

Airtel Digital will take further steps to monetize data on the network to create business streams from not just advertising, but also from gaming, entertainment, music, cybersecurity, cloud for small and medium enterprises and communication platforms as a service, chief executive officer Adarsh Nair said in an interview.

“The businesses contribute about ₹1,000 crore in revenues, and one part of it is advertising, which is leading since we started it earlier. We’re already seeing a 200% year-on-year growth in revenue, and we expect this to continue for the years to come," he added.

It is banking on first-party data of its large customer base across telecom, direct-to-home and fibre-to-the-home businesses, which can be dissected to provide targeted advertising to customers. Nair said Airtel was not investing anything into the business, but was generating revenue, creating a complete upside for sustainable growth for the ventures.

“We’re also working on location-based advertising based on consent from the consumer, which will be a big revenue generator. We’ve piloted it and we’re waiting for the data laws to roll it out fully because it needs a consent framework."

Location-based advertising will work on geo-fencing which targets consumers in a small area, such as a mall, and brands can offer discounts or promotions to consumers in that area through the carrier’s ad service network. Through a partnership with hybrid blockchain platform provider Aqilliz in which Airtel acquired a strategic stake early this year, users will be able to register their consent for various brands that will be connected to the platform through their databases.

“Users will be in control of the advertising that comes to them, enabled by blockchain, so we will put this out once the data laws and consent frameworks (are established)," he added.

Nair said Airtel was well-placed to pitch its advertising services with nearly 200 million people digitally interacting with the brand, and more than 2,000 enterprises and over 1,000 SMEs that were already buying products from the carrier.

Monetization from the network is an essential progression for India’s No. 2 carrier as it takes on Reliance Jio and Vodafone Idea for a larger share of revenues from over one billion mobile customers.

Years of tariff wars after the advent of Reliance Jio, which brought down data charges to the lowest in the world and introduced free voice calls, eroded profits and squeezed margins, giving way to a three-player market. The telcos have begun raising tariffs since December 2019, but also realized that they can no longer be just dumb pipes for data and voice and have to find more ways to monetize.