 A very warm welcome to everyone who's watching. Now, programmatic advertising can be considered what quantum mechanics is for physics. Everybody talks about it, but very few understand it well. But we have a very special guest here with us, who has a deep understanding of the domain. Now, he's going to tell us why programmatic advertising has become the be-all and end-all of the digital world and for brands and why DSPs launched by e-commerce platforms have an edge over the others. Now, let me welcome Sankar Mehrotra, VP monetization of Flipkart. Hi, Sankar. Hey, Neeta. Great to be here. Thanks a lot for having your work. Glad to have you. Now, Sankar, India is one of the fastest growing programmatic advertising markets in the world. Now, earlier, the challenge for its growth was that digital consumed a very small part of the ad file. Now, but in the past two years, courtesy of the pandemic, now, we've seen it grow on my leaps and bounds. Now, I'd like to really know from you how programmatic advertising as a discipline has used that tailwind to its advantage. Got it. Great question, Neeta. And it'd be awesome to kick off the discussion with this. Let's talk about the overall digital market to begin with. There are multiple numbers that are there for the market. There are some estimates that put the market at about 19,000 crores, which is for 2021. 2022 is set to grow to about 23,000, 24,000 odd crores. I think most of these numbers, though, vastly underestimate what the real market size is. From our data triangulations, I would stick my neck out and say in the last year, which is in 2021, the digitally advertised market might have already reached 30,000 crores. There's a large part of the market. You have your SMEs and SMDs who are spending, which perhaps is not even getting captured. Lots of money are going behind, let's say a lot of profiles with the downloads, etc., which might not even be getting captured. So if you think about digitally as an overall opportunity, it is much larger than what has perhaps been reported. And in case the market is less than 30,000 crores, it could be north of 35 of the total index. So it's an opportunity at this point of time, and it's only set to grow. As internet penetration keeps on rising in the country, as more and more people start their online journeys through mobile, the share of digital expenses is only going to increase because as users move, the brands will too. So that's about the overall digital. Now, within digital, you have multiple segments. Typically, we try and break up the market as social, video, display, and there's this entire commerce advertising space, which is getting, I would say there are multiple people who are actually playing in this domain. There's us, there's our competition, there's phone play, there's Paytm, there's Nike, there's Mentra, so many pairs who are coming up. So the entire commerce advertising space is also getting extremely active, and there is a huge amount of investment that is not going down in this space too. Now, just going back to also what you had asked about programmatic. Now, the programmatic really is providing accuracy and efficiency at scale. The entire digital world is distributing more and more towards performance. I'm not saying that I fully agree to the movement of migration, but it is pivoting more and more towards that. And there are sectors and there are verticals, which are relying very heavily on programmatic already. You think of a vertical like gaming, you think about all consumer tech, you think about all tech and tech. All of these categories are very, very big on programmatic already. And the reason is really quite simple, how we reach the most relevant audience at scale. So I think this trend is only going to grow. Already moving in a direction where the numbers are set to go, programmatic makes even sense for a lot of brands and categories, and you can see more adoption happening on it in the coming years. Like you mentioned, I think the investment is already huge and growing by the day and for the right reasons. I think it's a big boon because apart from saving time on manual insertions, you can actually measure the campaign performance real time as opposed to waiting till the fag end of the campaign to figure out whether it was successful or not. So that's a huge opportunity there. And you are an integral part of the programmatic advertising ecosystem today. In February, you launched a custom built demand side platform in partnership with MediaMan. Tell me, how was the reception from the market so far? Yeah. See, I mean, again, I'll just take a step out, right? The pieces of us doing a DSP in the first place, right? Think about it. Users take a lot of actions on the destinations of the split part, right? They browse through multiple categories. They wish list items, they add things to part. They use multiple payment methods and so many other things, right? Now, we're able to churn all of these actions into some insights, right? Now, what we are essentially trying to do is understand user intent in some way, right? Really understand what is the user trying to achieve, etc. And if you think of us as a platform, a job that we do well is to hyperbosomize, right? So when users come on the part, your experience on the part versus my experience on the part is very different or could be very different, right? The kind of merchandising that you might see was absolutely recommendations that you're going to get all of that is different, right? Now, we use all of these insights to show ads on the platform, right? What we do is build a lot of these anonymized ports and use these insights to show ads on the platform. We've actually just taken that narrative forward, right? The cohorts that we use to public users on Flipkart and I don't like that, let's say is surface relevant content to our users on platform are the cohorts that we use, you know, on RDSP too, right? So whether you retail on Flipkart today or you do not, you can use all of that intelligence to surface the right kind of computation to the right kind of user. An example, if I were to think of, let's say BFSI as a category, right? We have an understanding of which customers are, let's say cash customers, which customers are using a particular type of credit card, who's using debit card, who might be on UPI and dependent on the product that you have, you can choose one of these cohorts to show the right kind of part to be irrespective of where they are, you know, off-platform, right? So really is the thesis of our DSP, right? It's early days, right? It's just been about seven or eight months and it's a market which like we are saying is set to go. The architecture or thesis of having this DSP is fundamentally very strong. We've seen month on month growth, we are growing quarter but if I have to simplify what you said or maybe ask you in a very direct sort of a way, there are so many DSPs out there in the market. So I think there are two ways of going about it. One, you can go through scale like the number of people that you can actually reach out or maybe the richness of the data, you might have lesser number of people but the data that you have on them is really rich. So in this case, which category would the flip cut DSP be? Depth very clearly, right? You know, so let me just again try and break it down, right? So you can get limitless inventory through multiple supply sources, right? What makes a difference is the kind of layering that you can do on top of that supply, right? Where you start to focus more and more based on your brand, based on your customer, based on the goals that you're talking about, right? And again, up to the point I was making in the previous question, right? We understand user signals, we understand their intent and again, they're able to analyze them and say, okay, this is a market cohort for x-ray category. Let's say this is a cohort which based on things like the recency of their purchase, frequency of their purchase, the value of their purchase, you can have a kind of a segment. You can say this is a cohort that has browsed, let's say diapers, and hence you might want to show a toy ad. So, you know, all of that intelligence is to be available on our DSP, right? So to your question, what is the difference you're talking about? It is the depth of what we are able to provide to our customers. And I think another advantage is you're actually getting consumers closer to the purchase cycle. So you know their behavior much better than any other, you know, website. I mean any other DSP could basically. Yeah, I would think so, yeah. And that really goes back to the point of trying to surface the right kind of communication to the right kind of user and avoiding as much spillage as you can, right? So I think that is exactly the position that we want to take and that is exactly what we're trying to do. And you know, let's come to the consumer point of view. Now, you know, there is more competition than ever to reach consumers today and you know, resonate with your niche interests and habits. They are so much more tech savvy and better informed about what's available out there in the market. So how programmatic this advertising and your DSP specifically beneficial for the new age consumer? Yeah, see think of advertising as a spectrum, right? Advertising is really you can think of it as a gradient, right? As customers, your intent can perhaps be broken down into four parts, right? There are times when you have your intent, which is very, very clear, so call it strong intent, right? There are times when you have latent intent, there are times when you have a nascent intent and there are times when there is a new intent that is to be created, right? Advertising obviously straddles all of this, right? Now, for someone with a very strong intent, right? Typically, what that customer will do is go search for it, right? Maybe you can search on a horizontal or if it is a product where you will perhaps come to a destination surface, right? The job of advertising when a customer has strong intent is really to surface the selection that the user is looking for, right? So, advertising has a role to play there too, right? When you think of intent, intent, you know, it's advertising can play the job of reminding, right? And weak-indulging their interest so to say, right? When it comes to nascent intent, perhaps you can amplify, right? Showcase the products and services which are based on their prior activity and multiple behavioral signals. And when it comes to, you know, let's say new intent, you can inspire, right? You can show things that they might need but they haven't pursued it themselves, right? So, I think with the customer being digitally savvy, digitally smart, it's not that advertising does not have a role to play. I think the need for advertising gets pronounced depending on what part of the ingredient the customer might be in, right? And again, programmatic is meaningful in this environment because it allows the right kind of content to be surface to the right kind to use or have the right kind of time dependent on what their intent is and where they are, right? So, I think advertising has a role to play if you continue to have a role to play. You know, that's, you said something very interesting, you spoke about, you know, how advertising can be a reminder, you know? And as soon as somebody talks about a reminder, I think of retargeted ads, you know? Whatever you say, I mean, their nuisance, of course, they are effective but, you know, a DSP can do a lot more. You know, it can literally adapt to various types of display advertising campaigns like you mentioned catering to the various modes of the consumer at that point in time. Can you elaborate what kind of specific solutions you have with the different sets of brands and advertisers that you have on that? Yes, so I'll pick it up into two components. There are things on deck and there are things that we do off deck, right? When I say on deck, I mean our assets like our app, M site, etc. On deck, we largely cater to pandemic brands and sellers and there are multiple solutions that are available, right? We can showcase ads to them when they're on the home page, we can showcase ads to them when they are on various category pages, we can showcase ads to them when they are towards the end of their shopping journey or towards the closure of their shopping fund, right? And there are multiple experiences, that there are large format display, there are shopping ads, there are things that we call as X2X3, right? Multiple experiences which are again pre-targeted and standardized, right? Similarly, there are search ads, right? So when a user is searching for something, how do you surface the right kind of selection, what do you end over index on, which is actually a big guardrail that we have is that we maintain very high relevance. So depending on what the customer is searching, we want to show very relevant content, right? And not showing unnecessary kind of, you know, just tonight. As you go off deck, right, our DSP is an effort, right, where we are trying to use this understanding of the customer that we have on all open internet supplies, right? So our DSP is plugged into multiple supply sources and we are trying to use all of this understanding to show ads to users anywhere on open internet, right? And it can be for any category, right? So for example, if I think of an endemic and any brand, X, Y, Z, right, they're already advertising on the platform, but they definitely would be doing things off-platform, right? How can we ensure that we provide them a more relevant and a more targeted kind of an opportunity irrespective of the size that they want to buy off it, right? So that is the opportunity for endemic, right? For non-endemic, it is about using this intelligence, so using these cohorts to create relevance, you know, for their customers whenever they're browsing off-platform. So on-platform off-platform, both kind of solutions that are available and catering to both endemic and non-endemic kind of products. And which are the biggest categories of advertisers here? Yeah, you can see there are multiple categories on the platform, right? There's handsets, there's electronics, there's CPG, which is very large, there's fashion. So there are multiple categories that we are already catering to. And we started to make headway with categories like BFSI and all the, you know, in the past, in the past one year, there was a lot of foundation work that had been done around it. And we're seeing tremendous faction happening from these categories. And another thing that we noticed recently is, you know, third-party data is getting deprecated across the world, you know, for various reasons, industry, channels, privacy, everything else. Do you see that as a trigger for Flipkart DSPs to, you know, go a step further and solve the problems of marketers, you know, first-party data like we were talking about? It's really, really helpful. Yeah, yeah, no, it will be right. It will happen across all destinations who have first-party data and who are using the signals that they might have available in an anonymized fashion. How to create relevance for their customers and brands will definitely see higher traction in the future, right? There are a lot of solutions that have been developed like, I mean, there are companies that are trying to figure out unified IDs and all of that, right? So you see a lot of development happening. So let's say third-party cookie deprecation on phone, things like what Apple is doing with IDF and application, etc. I think the ecosystem will work, right? But I think the merit or the value that first-party data holders will have is something which is going to get amplified in the near and the long run. There's not to say that there might not be solutions that have been put here. Anyone with first-party data, you will see brands migrating across it. And one last question, what are the key trends, other trends that you're seeing in this programmatic advertising space in for the next couple of years? Yeah, no, so a couple of things we already spoke about, right? The impact of it might be limited in India, but let's say IDF and application is another big trend. Third thing is this entire interplay between let's say world gardens and open web, right? So in some markets, it is observed that there is let's say time spent on world gardens is reduced. I'm not sure whether it is to find it or not, but in some job of ease it is, right? So there you've seen the narrative of open web getting more and more pronounced, right? And really it is a green space right now, right? Time will tell how this value plays out, but I would say the entire interplay of world gardens and open web is something that we're going to see playing out in the coming years, right? I think CTV as a trend is something that is there to speak, should see more and more advertisers wanting to latch on to it, right? Last but not the least, and I spoke about it when we started this commerce advertising is going to see this proportionate gains, it will grow faster than the rest of the market, right? In the next few years, like you said, it will play out in this domain now, right? You'll see a lot of advertisers wanting to find it as their customers move towards platforms of business, they want to move their purchasing orders. So yeah, I think that would be the so good. So if we have to sum it up and tell people exactly what Flipkart DSP gives, provides to advertisers, I think it would be like a 360 degree funnel for reaching out to the target audience. I mean, yes, I mean, I mean, it is, yeah, especially for endemic brands, right? I mean, now endemic brands can bring traffic back to the platform and see exactly how their ads have performed, right? So, so you have to back in the case of getting reviews, absolutely. Absolutely, great. Thank you so much, Sankar for this very enlightening discussion. It really has helped me make progress in my understanding of the programmatic advertising space. And I bet it has helped the viewers as well. Thank you. Thank you so much for joining us. Yeah, no, thanks a lot, Nita. Tejja has spoken to you, greatly enjoyed this conversation. Thank you.