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Business Model 101: How the Auto Rickshaw may just change your marketing budgets

In Entrepreneurship by NextBigWhat8 Comments

Auto rickshaw advertising may have really captured the fancy of the masses with the innovative “Capacity – 3 Idiots” campaign painting the town towards the end of last year but the medium has been live for quite some time now and has helped build many brands in the process. Many of India’s prominent start-up brands have been largely built using this medium.

The Road so far

Mouthshut and Tally were probably among the first technology brands to use this medium effectively to build a presence in the offline world. Mouthshut even claims to have received 30M PVs/month as a result of the initial phases of the campaign, an imposing number considering typical startup marketing budgets.

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Following the success of these brands, other home-grown tech companies like MapMyIndia and Zoho have leveraged auto-rickshaws well to create a presence for their brand.

Till very recently, this space was largely unorganised. A company would get 100-200 autos, pay the rickshaw owners a couple of hundred rupees and paint the brand on the hood of the auto.
To ensure that the auto rickshaw drivers are incentivized to retain the ad, some companies even pay the driver an amount if the ad is still present after 3-6 months. MapMyIndia has been following an incentive plan along those lines.

What works

Cost: The cost, without a doubt, is among the most attractive reasons for using this medium.
Engagement: If you really think about it, auto rickshaw ads can engage the user longer than most other ad media. A person stuck in traffic, often, has little else to do than stare at the back of the vehicle in front. In fact, this is pretty much the same reason that billboards placed at bus traffic junctions charge higher than those along the road at non-junctions.
Mobile coverage 24X7: The performance of the ad is inherently linked to the performance of the driver . The more the number of trips that the driver makes, the greater the visibility.

The Road Ahead

The potential of this advertising medium has always been immense and it is, of late, being recognized by various groups which are trying to organize the entire advertising process.
Nyayabhoomi, a Delhi-based NGO which works on promoting auto-rickshaws and improving their services helped get the Municipal Corporation of Delhi (MCD), which holds advertising rights in Delhi, to approve advertising on auto-rickshaws on a revenue-sharing basis.

Following the MCD approval, JKJS, an auto-rickshaw advertising company, has started providing out of the box ad solutions on 5000 autos in Delhi, making it the single-largest provider of this nature. Their service “Ad it on Auto” adds other VAS to the advertising including ensuring replacement of ads in case of wear and tear.

Various models are being pursued to innovate in auto-rickshaw advertising:
Customized auto-rickshaws: Better suited for advertisements with spacious back, side and roof display space and multiple inside panels.
LED advertising screens: On the back of auto-rickshaws to enable nighttime viewing

Taking auto advertising to the next level, and moving from outdoor formats to indoor formats, three young entrepreneurs in Mumbai have started ‘Meter Down’, a 24-page general interest monthly magazine which provides passengers travelling in auto rickshaws with short, crisp and quick-to-read articles. The general interest magazine is placed free of cost for the passengers and features a mix of travel, entrepreneurship, lifestyle and fashion-related articles. the idea is to get local advertisers to advertise in the magazine to an engaged audience which has little else to do when stuck in traffic jams.

Finally…

Think wild and LED screens coupled with GPS capabilities on auto rickshaw hoods could, one day, vary the advertisement based on the locality the auto rickshaw is driving through. ;-)
I would like to see the day when MNC’s coming into India actively budget for marketing on the auto channel. ;-) As for now, I hope more startups benefit out of this cost-effective medium.

Sangeet Paul Choudary is a leader in the New Ventures group at Intuit Asia-Pac and and loves chicken soup (for the stomach), post-modern satire (for the soul), an over-emphasis on business model and an under-emphasis on powerpoint. This post was first published at Venturati

Comments

  1. sheetal lakhani

    Ohh yes publicity on transport vehicle is the best means for publicity as they are moving around in the city most of the time. As many of us staying in mumbai would have seen product add, movie add, and etc on the local trains, buses and auto rikshaw. But publicity on auto is the cheapest and the new medium for fast publicity

  2. Ashish Abrol

    Auto rickshaw advertising might be a cost effective medium but is not a medium which is likely to survive beyond 2014 in New Delhi. with metro connectivity spreading across the city, auto rickshaws will soon be considered an ancient relic. If there are 55,000 auto rickshaws in the city today, I expect this number to drop by as much as 60-70% over the next 4 years. During the same time, radio taxis will pick up pace and will increase by over 100% from the current number of 1500.

    Having said that, one can certainly consider the auto rickshaw as an option till it is still around.
    Ashish Abrol

    1. Sangeet Paul

      Good point, Ashish… Number may fall in Delhi but if you really look at its potential across India, it is going to be a long tie before the auto rickshaw stops plying the roads of this country

  3. Ram

    Here at BankBazaar.com we do auto advertising. It is a very effective Below-the-line marketing technique. As mentioned in the blog post, it is also very cheap. I totally agree with all the points mentioned in the post. The sector is unorganized and is a potential opportunity for an entrepreneur. We found that going to the auto drivers directly would save a lot of cost. The firms that we approached charged very high and had absolutely no idea of tracking.
    My best advice to companies vying this medium of advertising would be: go and hit road yourself, at least for now.

    1. Sangeet Paul

      Ram, Great to know that you guys are benefiting from this medium. Definitely seen your ads on auto ricksaws around the city…

  4. rahul

    hi guys
    i know one of the enterpreneur who has in there under more than 10,000 rickshaws for advertisement those who want to do advertisement its the best mode of business to advertise in rickshaws.

  5. Fahd

    Can someone share example costs for this? And any aggregators I can approach for advertising? Thanks!

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