100 billion transactions in one startup + The First Part
Before Hamshahri and the like pay attention to the capacities of online space and agree that they should be present in such space, businesses like Divar had examined and entered this space and offline businesses can’t confront them. Because without understanding the online concept we can’t gain a share from this field
Ali Jafari and Masoud Khosravi haven’t relied on Iran borders and could help foreign ads agencies to have access to Iran domestic traffic by communicating with outside borders and they have done all these under the name of Adro.
Founders of Adro talk about information from Online ads market, importance of content marketing, efficient methods of advertising for new startups, the future of content based ads and …
When is Adro born?
Masoud: 1393 was the start point of Adro.
How much was your initial capital?
Ali: 150 million tomans that was supplied all by Masoud.
You changed your business model from b2b to b2c from the beginning; what was the reason?
Ali: at first we had ad network for which we couldn’t make a good market and the problem was that big and wealthier competitors were in the market.
After a while we found out that every month a new ad-network is created and their number was so high that we found out when ad networks become saturated in a country, the presence of ad exchange or ad exchange platform for online ad networks would become necessary.
In fact, our only goal was to have an ad exchange so that we can connect networks with each other. When we were implementing ad exchange, we found out that other systems behind it was empty. Thus we designed platforms like dsp and ssp.
Based on current statistics, the whole volume of Iran online ads was more than 55 million dollars last year which includes all channels from email to Telegram and Instagram and …
But based on statistics of 1394, the whole volume of ads in Iran, is more than 4000 billion tomans. thus, you see that the share of online ads is very liitle.
There wasn’t something like your work in Iran; did you have foreign model?
Masoud: the foreign model was limited and no more than 10 big companies in the world worked in this field. The biggest one was Google.
Right now more than 90 percent of the total income of Google is gained from ad exchange infrastructure. Thus one of the reasons that we decided to launch such a startup was due to the good relation of me and Masoud with good ad networks of that time.
In fact this good relation made them to trust us because most important aspect of our work is clarification of duties and tasks and if the ad network that wanted to work with us didn’t trust us, it wouldn’t cooperate.
Masoud: at that time these ad networks were each other’s enemy!
It seems that Adro system could put several big companies all together.
Ali: one of the most important reasons that ad networks joined our ad exchange is the increase in the sale of their traffic. Because their brand would be kept and their sale would be increased.
Most importantly, when they were put together, they could meet each other’s needs and help the growth of market; even now they have common meetings.
The positive point of cooperation between domestic ad networks is that if foreign investor comes to Iran, it can take the whole market.
But when domestic players work on a model of income which is win-win, entering Iran market even with lots of money would be difficult of foreign investors. Because right now there are big foreign companies in Iran market.
What is the benefit of this cooperation and common meetings?
Masoud: the positive point of cooperation between domestic ad-networks is that if foreign investor comes to Iran, it can take the whole market but when domestic players work on a model of income which is win-win, entering Iran market even with lots of money would be difficult of foreign investors. Because right now there are big foreign companies in Iran market.
Here we want to go back to the start of your path. You were to enter a market and launch your business based on it. What were/are the figures about ads market in Iran at that time and now? Including online and offline ads.
Ali: based on current statistics, the whole volume of Iran online ads was more that 55 million dollars last year which includes all channels from email to Telegram and Instagram and …
How much is the volume of Iran ads market in general?
Masoud: based on statistics in 1394, the whole volume of ads market in Iran is more than 4000 billion tomans. thus you see that the share of Online advertisement is very little.
What are the barriers that our approach is towards offline ads?
Masoud: one of the barriers is lack of knowledge of business owners in Iran; that is there isn’t any education in this field to know online space.
Even an employee told us although we considered high amount of money for advertisement, but we neglected online option because there was no one in our company who knew this field. This means a challenge for our market.
The statistics you mentioned to about Iran ads market is related to 1394. The statistics of online ads was more than 55 million dollars last year. Do you have a figure about growth rate of this market?
Ali: we experienced 20 to 25 percent of growth each year. Even our business had 100% growth per year.
What is your prediction about the future of online ads market in Iran?
Ali: we have predicted that the size of online ads market in Iran reaches 85 million dollars next year.
We had powerful traditional ads companies in Iran like Hamshahri newspaper, Peykebartar and … and they found out about the power of online space and added internet to their ads; do you think that these traditional godfathers could gain a significant share of this space? That is could they have those offline space customers in the online field as well? And if no, what would be the reasons?
Ali: no and even I think they have failed. Their act in traditional space is not in accordance with online space.
Also before Hamshahri and the like paid attention to the capacities of online soace and agreed that they should be present in this field, businesses like Divar examined the market and entered this space and offline businesses can’t compete with it because without understanding the concept of online, we can’t get a share in this field.
Masoud: generally they don’t have much chance in front of online businesses.
Can we say that the way of communication between traditional ads agencies and online ads is totally blocked?
Ali: maybe it isn’t totally blocked but it’s very difficult. The challenge we have with ads agencies is related to educating them.
Educations about the nature of this field and other characteristics of electronic businesses.
According to the power you mentioned that is hidden in online field and the capacities, why haven’t big ads agencies come towards this way that much?
Masoud: one of the characteristics of online field is clarification; for example when an advertisement of a company is installed on some billboards across the city, the customer doesn’t have any details from feedbacks while he has paid much money.
But in online advertisement, all details are shown clearly but some ads agencies don’t want to make things clear.
Where are lotteries and predictions which are increasing these days, placed in online ads?
Ali: such advertisements with these solutions guide the user to sites and Telegram channels and don’t have positive result for the user.
Sites and businesses are banned from such things based on law and thus there isn’t any ad network in Iran market that works with sites that predict football or bet. But they are working with sites and this isn’t legal.
Do they earn lots of money?
Masoud: high figures are in their businesses. These companies usually are outside Iran and launched these sites there and they even offer high prepayments for advertising.
Have they proposed to you?
Ali: very much.
Masoud: for example last year at Nowruz, they proposed that we get 300 million as a prepayment and advertise for them but we didn’t accept.
Is their presence a threat for the whole online ads market?
Ali: yes for the nature of market, because the user clicks on a banner and probably he doesn’t have much experience and loses the bet, then he wouldn’t trust internet ads anymore. This lack of trust is a loss for the whole market.
How does Adro work?
Masoud: we don’t work with any site and application directly. Ardo is in a center. On one side of it, there is supply that we work with ad-networks who cooperate with many sites and on the other side there is demand that are online adm networks or ads agencies. Thus we don’t work with advertisers directly.
Therefore, Adro is a market place and b2b. In fact, Adro is more like a screen of exchange and shows different prices of sellers’ ads to buyers.
Since now more than 100 billion transactions have happened in Adro. It may be interesting for you to know how many transactions are done daily in Iran bank network and we have more than triple times per day and we see the capacity to increase it up to 5 or 6 times more in terms of management technical power in Adro.
According to statistics we received, the number of bank transactions is about 50 million per day, but this number of about 400 million per day in Adro
How does Adro make money?
Masoud: We take a percent of transactions done as a share.
What percent and from which party do you get it?
Masoud: 7.5 percent from the buyer. The seller of a product or service for example says he sells for 1000 tomans and we offer it to the buyer and get our percent.
I should add that Adro doesn’t only exchange banner ads but it supports each media and every kind of ads like video, banner and ….
How many online and offline ads agencies do you work with?
Masoud: right now we work with 15 Iranian ads agencies and 5 foreign agencies and this cooperation has happened because when we created exchanging, one of our goals was to make the market bigger.
Thus we created a platform named dsp for offline ads agencies so that they can buy digitally from this platform.
How many transactions are done through Adro?
Ali: Since now more than 100 billion transactions have happened in Adro. It may be interesting for you to know how many transactions are done daily in Iran bank network.
We have more than triple times per day and we see the capacity to increase it up to 5 or 6 times more in terms of management technical power in Adro.
According to statistics we received, the number of bank transfers is about 50 million per day, but this number of about 400 million per day in Adro.
How much is the costs of online ads based on their types?
Ali: for example if I want to give a figure based on the number of shows, it can be 500 rials for each show up to foreign cpm that is about 5 or 6 dollars for each show. In general these figures are very unsteady.
According to the high volume of information to which Adro have access because of the nature of its work, which sensitivities or issues have been related to it?
Ali: the sensitivity is on data but we usually keep information in our country.
Masoud: we have access to 25 million Iranian users each day and show them the advertisements.
According to this information, do you have any figures about one-day sale in Adro.
Ali: each user views almost 70 articles or pages each day in which there is ad banner or ad content. This figure is high in some media like Telegram and even there was a figure that each user can read 700 articles in one channel or group each day.
That is, the behavior of one user is different in Telegram, website and application. But based on estimates, if ad banner is shown to a user more than three times, we don’t consider him a user who sees unique ads anymore.
Thus we show advertisements to each user only three times. Because if we show more, it would affect user’s behavior.
Considering all these, it is interesting for readers to know to what extent they can have sales?
Masoud: it happened that we sell more than 70 million tomans one say. But this figure is related to the peak of our sale and not all days of the year.
For example, from Bahman to end of Esfand we have high sales because of Yalda and Noruz. But we have much loss in Farvardin.
Is there any statistics that determine the figures of online advertisement that for example which one is more interesting?
Ali: banner ads, video that is of different kinds. Also ads that are placed at the end of contents and other ads like a combination of banner and video. In general, these three kinds of ads are used more than others in Iran.
In terms of financial volume, video is very expensive and may be 10 times more expensive than banner ads. But the volume of number of pictures shown by banner is more than that of video.
Masoud: we don’t have many media for video. In other words the space for banner ads is bigger than the space for video. But in general we have from 50-toman traffic available to 6-dollar traffic. All these diversities are related to different media and publishers and …
Ali: in fact this shortage is the result of little number of publishers. How many Aparat or TVplus we have? On one hand, users aren’t spread between different video sites and usually watch videos in one or two sites but banner ads are seen from different sites.
Masoud: now due to the growth of applications, videos are seen more than before.
With which problems and barriers do Ali and Masoud face as founders of Adro?
Ali: one of the main problems is related to site and application because we aren’t the owner of sites independently and provide the traffic offered by site, to one agency; now this traffic can have a good quality or not or can be fake.
In fact the most important challenge of exchanging in the world is the quality of traffic and issues like applying for traffic and topics related to the request from agencies and … do exist.
We experience a hard situation during the first year because we had to try to stop traffics that had many frauds and then after six months we learnt which traffic should be sent to the agency and which traffic should not.
Masoud: right now fraud has become an industry in the world.
Ali: it hasn’t become an industry in Iran yet but publishers do some wrong things. Thus as long as fraud is present and they produce fraud traffic, we should have the necessary development so that we can confront it.
Can you make an example to make it clearer?
Ali: we should act like anti-virus companies. Because viruses aren’t ruined and anti-virus should always be produced. This applies to ads fraud as well.
For example, in America if I want to talk about Google, 25 to 30 percent of ads traffic of YouTube is from bots that is there isn’t any human behind these clicks.
That is 25 to 30 percent of Google ads was waste of money. Google couldn’t stop it yet and I hope that these problems don’t exist in Iran because after that big technology companies should be established so that they can confront fraud traffic with high costs.
I should add that fake ads traffic is worse than site. Thus companies and ad-networks that work on application, face with much bigger challenges.
In fact large part of income would be ruined or wasted. Publisher can do a fake thing and in fact claim a part of money. This would harm ad-networks and advertisers.
Masoud: according to statistics in 2016, more than 8 billion dollars of online advertisement were wasted because of such frauds, that is they know it was a fraud but they pay the money.
Thus 23 percent of vidoes of the world and 11 percent of banners were fake. In fact this fake traffic has become a topic in universities of America and it is an important challenge.
Do you have any competitor in Iran market?
Ali: no. Adro is the only exchange in Iran.