Month: March 2022

Ad Expenditure

Shabbir Chunawalla

In 2021, cinema and OOH media suffered in terms of ad expenditure. They are expected to bounce back in 2022. Traditional media print and radio are expected to see a decline in growth rate in 2022. Print media expenditure will be Rs.12,667 crore in 2022.

The overall ad expenditure is likely to touch Rs.1,07,987 crore in 2022. (almost Rs1.08 trillion).

India’s expenditure on the digital medium is estimated to reach Rs.48,603 crore in 2022. Thus digital accounts for 45 per cent share in the media spend in 2022. So far, TV was the dominant medium, with a share of 42 per cent in 2021. The share is likely to fall to 39 per cent in 2022. Thus digital medium will overtake TV. TV’s ad expenditure will be Rs.42,388 crore.

In terms of ad spend India is the ninth largest market. In terms of incremental ad spend, India is the fifth highest market.

India’s digital spend is the highest. It is attributed to increased e-commerce advertising, the rise of influencers and short-form videos along with OTT. In 2022, there could be revival in ad expenses of FMCG brands.

Hydrogen Production

Shabbir Chunawalla

Hydrogen is the cleanest form of known fuel. Hydrogen could be grey, blue or green, depending on the production method. Grey hydrogen is the most common form and is generated from natural gas or methane through a process called ‘steam reforming.’

Blue hydrogen is that hydrogen, the carbon of which is captured and stored. It is carbon neutral hydrogen.

Green hydrogen or clean hydrogen is sourced from renewable energy sources, such as solar or wind power, electrolysing water into hydrogen and oxygen atoms.

Blue hydrogen costs $1.2 to $1.5 per KG. Green hydrogen costs $3 to $6.55 per kg. Fossil-based hydrogen costs about $1.8.

As costs would come down over a period of time, those could reach $1 per kg by the end of this decade.

Value of Money

Shabbir Chunawalla

All currencies, in a sense, are cryptos. As currency, they are a medium of exchange. It is a mutual agreement, irrespective of their intrinsic worth. This has happened especially after the currencies went off the gold standard. Britain did so in 1931 followed by the US in 1933. The US was going through the Great Depression and Franklin Roosevelt decided to print more dollars to fund his New Deal. Before the thirties, the currencies were backed by the reserves of gold in the central bank’s vaults. Paper money was a promissory note that could be exchanged for its value.

No tie up to the gold and the currencies have become ersatz money used in board game Monopoly. Even when gold standard prevailed, its supposed value was a fabrication (there was a mismatch between the demand and supply of the precious metal due to its relative scarcity).

There were token exchanges — Roman empire paid wages to the workers in salt. It was called ‘sale’, and that word later became satary. Even cowrie shells were used as currency. These days a piece of paper with the signature of a bureaucrat promising to pay the value has acquired legitimacy. Is the value, say a particular sum, the same over a period of time? It is a make-believe value. That is why cash has been code-named in terms of several graphic terms.

Money, as a concept, is based on notional worth. It is fungible. It could become worthless by a single stroke of pen when demonetisation is announced.

Tulip Mania

Shabbir Chunawalla

There are examples in history of mad speculations. They draw a number of investors. The Dutch tulip mania happened between 1634 and 1637. It was trading in tulip bulbs. Prices soared everyday. It was a frenzy. The price rise attracted more investors, and that escalated the prices further. The rise was 200 times in a month. The rare varieties were priced even higher.

The bubble burst finally, It bankrupted so many. Crypto mania too could lead to the same fate. The RBI governor warns that in crypto the underlying is not ‘even a tulip.’

Bitcoin reached the dizzying heights of $60000 to $65000. Even now it is at $35000. Even other cryptos have risen dramatically. The budget tax of capital gains aims to discourage crypto trading. The RBI feels cryptos are a threat to financial and macroeconomic stability.

Facebook as a Monopoly

Shabbir Chunawalla

Facebook is on the way to its journey from a personal social network to virtual reality metaverse. However, of late, it faces challenges. The price of its stock declined by 26 per cent on account of poor financial results. Its business of targeted advertising has become vulnerable due to change in Apple’s privacy policies. It also faces a threat from the legislators in the EU and US who may introduce similar measures.

The Federal Trade Commission (FTC) claims that Facebook followed a ‘buy or bury’ strategy. It acquired WhatsApp and Instagram to protect its monopoly power. It continues to follow buy or bury strategies to move into VR. The FTC offered enough evidence that buys of WhatsApp and Instagram were to neutralise actual and likely future competitors.

However, FTC case faces a convincing argument. Facebook is free and so there is no question of it being a monopoly. What is to be proved that Facebook is charging predatory low prices to drive out competitors. Or alternatively it is prohibitively costly and hurts the consumers. Facebook being free, runs the argument, is harmless. The FTC feels that even a free monopoly could be harmful. It is difficult to prove this. Even then Facebook exercises monopoly power in the market of personal social network.

The suit ties up the company in a legal battle and puts tremendous pressure on the revenues. FB earns close to 99 per cent of its revenues in advertising — say $118 billion in 2021, with $39.4 billion in profits.

Facebook’s Advertising Adversely Affected

Shabbir Chunawalla

Facebook revenue declined sharply since its access to iPhone data has been restricted by Apple on account of change in its privacy rules. There is anti-trust scrutiny of Facebook around the world. There is a decline in the user base. Still Facebook attributed its likelihood to miss the target of $10 billion in ad revenues due to changes initiated by Apple Advertisers who find that their ads had become less effective. Even Google which also sells personalised ads on iPhones gets unfair advantage — allege Facebook. Facebook has to seek consent of the iPhone users for being tracked, but Googles search results and browser do not have to. Thus some ad budgets shift to Google for more effective targeting.

Google has already decided not to use iPhone users data where permission has to be sought. Google does not depend on third party data as Facebook does, since Google runs its own operating system Android and its own ad exchanges.

While doing Google search too, consumers leave behind valuable data which is enough to do effective advertising across Google-owned properties. That is an incentive to advertisers to prefer Google as the media.

Facebook finds it difficult to show whether the ads on its platform lead to sales and thus makes the platform less valuable. It lacks the conversion data. It makes real-time decision-making difficult.

Google banned cross-site tracking through its safari browser since 2017, and that was extended to third-party search engines. As an alternative it offers Duck Duck Go for search in Safari.

Facebook’s criticism of Apple and Google may attract more scrutiny from regulators.

Facebook alleges Google faces a different set of restrictions from Apple. It implies Apple is lenient towards Google since it uses Google as default search browser and Google pays Apple for this.

Grammarly

Shabbir Chunawalla

Grammarly was set up by three Ukrainians in 2009. It has a manpower of 600 employees. It has 30 million daily active users across the world. It has become a unicorn. The idea of Grammarly is to make people use software to communicate well. It wants world to write better English — error-free, no plagiarism and a proper grammar. The idea originated from a previous company they created to help prevent plagiarism.

At least two of Grammarly’s founders have become billionnaires — Max Lytvyn and Alex Shevchenko. Alex is a Canadian citizen. Brad Hoover is the third co-founder. He joined Grammarly in 2011. The breakthrough came in 2014 when it offered a free plan with basic features, and the option to pay for advanced ones. In 2015, they released browser extensions.

Advanced Driver Assistance Systems

Shabbir Chunawalla

Modern cars are equipped with advanced driving assistance systems called ADAS. These sensor assisted systems improve reaction times and accuracy. Those provide run-of-the-mill safety features such as lane-keeping assistance and automatic emergency braking.

Mostly LIDAR sensors are used. It is short for Light Detection And Ranging. Lidar sends out laser pulses, and then measures time it takes to bounce off an object and return. The data is used to calculate how far away things are and create a 3D map of the objects in an area.

Lidar’s ability to map the surroundings as well as measure object velocity makes it a good complementary sensor. Lidars offer long and wide visual ranges.

There are many lidar producers such as Velodyne, Luminar, Innoviz. Lidars have been used in self-driving vehicles being tested such as Waymo and Cruise. Many automobile companies are adopting Lidar technology. Its use is being integrated to electric vehicles too.

Tesla would like to depend on self-driving software algorithms rather than lidar. This software makes use of computer vision. Some car companies install the lidar on their vehicles, even though the software currently is not making full use of the capability. The idea is that future iterations of the software will be able to tap into the sensors, and no physical upgrade of the vehicle would be necessary.

Revolut

Shabbir Chunawalla

Revolut is the British fintech company. It intends to launch its services in India in the second half of 2022. Revolut products will be adapted to the needs of the Indian market. It will offer products in three or four stages.

To begin with, it will make available global remittances, and will cater to payments segment. Later, it will launch trading and investment offerings. It will be followed by credit and lending. Lastly, it will convert itself into a full-fledged digital bank. It will be a truly branchless bank.

Revolut’s application has been downloaded by 30,000 people even before its launch. It is going to recruit manpower in India.

Revolut India announched acquisition of international money transfer company Arvog Forex. It will enable Revolut to offer its remittance and forex services to Indian customers.

Innovation in AI through Applied Maths

Shabbir Chunawalla

In data science and AI, there is a tendency to use off-the-shelf algorithms. However, for innovation, one has to create new algorithms or has to tweak the existing algorithms. It presupposes knowledge of mathematics. You just cannot do it by mere programming.

ASIC or application specific integrated design is an area that has well-proven, established algorithms. Data science still has not reached this stage. Here applied maths is still emerging.

The area of a triangle can be calculated using a well-established formula or algorithm. However, if we have to calculate an irregular area with several curves and line boundaries, this area would require subdivision in such a way that computing is possible. Area could be subdivided many ways, and each throws up an algorithm. However, one solution could be the most efficient one.

In AI and data science, there are many possibilities across diverse industries. This calls for applied maths skills and not computer science skills. A data scientist from programming background can survive for a few years, but faces issues later.

Data science courses should be under the maths department, rather than computer science department.