Like most things in India, this mobile-ad story revolves around cricket.
Four years ago, in Bangalore, Valerie Wagoner and Amiya Pathak were toying with ways to try out their software, which generates 'missed calls,' a common Indian practice for circumventing phone data costs. They turned to the nation's favorite pastime, creating a polling tool for a cricket tournament. Fans flooded the lines with calls, giving Ms. Wagoner and Mr. Pathak enough fuel to form their company, Zipdial.
Last week, Facebook introduced its newest ad product: a news-feed button that uses the same software trait. One of the ads baits fans of the Rajasthan Royals cricket squad, which is sponsored by Garnier Men. Garnier bought the ad from Facebook. But once the user taps the button, the campaign moves to Zipdial.
After experimenting with polling tools, Zipdial shifted its software to advertising and has since powered campaigns with Unilever, P&G, Disney, Nestle and Coca-Cola. The startup believes it can solve two vexing problems for brands in India and other developing markets, as well as for ad-sellers like Facebook, Google and Twitter: reaching poor consumers, and then tracking them down.
Facebook has over 100 million active users in India, but it knows little about them. Very few access the site on desktop. And two-thirds of mobile users log-in with 'dumb' phones, often accessing the site through subsidized data offered by telecoms. This renders cookies and mobile-app tracking tactics useless. Credit and debit card use is also very rare among most of these consumers.
"They're invisible," said Ms. Wagoner, Zipdial's CEO. "They're transacting in cash, and they've never been online. How do you build user affinity and brand loyalty?"
Reaching the invisible consumer
Her answer is the missed call. Brand advertisers can sponsor sporting polls, like Garnier has, or run their own questionnaires. Some appear digitally, but others run in print or traditional media. Once users call in, Zipdial serves as an analytics platform for ad buyers and sellers, providing what Ms. Wagoner calls an "offline bridge" to brick-and-mortar transactions.
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It works across the starkly diverse country. An Android smartphone user in Mumbai may dial in response to a Zipdial campaign, hang up, then be targeted with a rich-media ad in English. Another might call after hearing a radio spot in Bihar, India's poorest state, and then receive SMS notification ads in Hindi or Bihari.
Amazon, a newcomer to India, even runs ads on billboards promoting its app and services with a 'missed call' number.
"At the end of the day, a large number of users are on feature phones. You have their number, however, you don't know who they are," said Avinash Jhangiani, senior VP-digital and mobility at Omnicom Media Group, India, which is working with Facebook and Zipdial. "This is a great way to go after the right audience."
The audience in India can be huge. In a recent campaign with Disney, Ms. Wagoner said the media giant netted more than two million engaged consumers. Each month, they used the missed call feature around thirteen times.
Garnier Men, a L'Oreal company, has run three separate campaigns with Zipdial, on traditional media, print and digital channels. The brand was also an early tester of Facebook's missed call product. During that period, the company saw its e-commerce sales grow 250% over the prior year, Akshay Menon, digital manager for L'Oreal in India, said.
Zipdial's campaigns can cost between $2,000 and $20,000 a month, depending on the size of the effort and targeting, Ms. Wagoner said. It is sharing some of its offline performance data with Facebook in the partnership, but it is not a financial relationship. Facebook's missed call ads will maintain their usual rates, Ms. Wagoner said.
Big country, small spend
While digital ads are picking up in India, they still lag woefully behind.
CPMs are typically priced around one-quarter or one-fifth of those in the U.S. Mobile ad spending in India reached $85 million between April 2013 and March 2014, up from $19 million two years ago, according to Vserv.mobi, an ad-tech firm. (By comparison, Facebook brought in around $3.14 billion in mobile-ad revenues worldwide last year.) eMarketer estimates media ad spending in India was $5.10 per person this year, just 13% of China's total; in the U.S., the figure is $564.84 per person.
That rate should climb as mobile Internet spreads. Right now, more than 80% of India's mobile lines are feature phones, but that will plummet as smartphone costs drop. Google is working with hardware partners on smartphones in India below $100; Mozilla has promised one at $25.
WhatsApp, the messaging app Facebook owns, is wildly popular among smartphone users in India. It's also a popular way to avoid texting charges -- one that could replace missed calls. In the tests with Facebook, Zipdial measured the responses of those served the ad format and found that feature phone owners used the missed call feature at a much higher rate -- 78% -- than Android owners.
Ms. Wagoner said she's welcoming smartphone adoption -- it allows for higher ad rates, with app notifications on Zipdial campaigns rather than voice or text. Still, the company is working to position itself as an analytics platform, deployable across emerging markets, rather than a one-hit ad format provider.
But, in India, Ms. Wagoner doesn't see missed calls disappearing anytime soon. "Even if you have a smartphone, what's the easiest way to respond to a print ad?" she asked. "Dial a number."