Category Archives: Data

How Google and Facebook are Eating the APAC Ad Industry

By Tom Simpson

A quick check of their books reveals that in the first quarter of 2017, 92 cents of every new dollar spent in online advertising across Asia Pacific (ex. China) went to Facebook and Google.

APAC Ad Revenue - Digital in Asia.com

That’s an incredible statistic. The good news is that digital marketing in the region is clearly experiencing strong growth, with revenues up by $1.23 billion year-on-year in 2017. The bad news? Of that $1.23 billion in growth, virtually all of it – $1.13 billion in total – goes to Google and Facebook, with only $100 million to share across the remainder of APAC publishers.

apac ad revenue growth yoy

Facebook and Google combined revenue this quarter hit 51% of all APAC revenue, meaning more budget goes to to Google and Facebook than every other digital publisher in the region put together.

Share of APAC Ad Revenue

Google and Facebook also forge ahead in terms of revenue against all media in the region, taking 15 cents in every 1 dollar spent. This is up from 12% – or 12 cents in the dollar – last year, and represents the increase in budget flowing from traditional media, including TV.

share of apac all media ad revenue q1 2017

None of the above is new news, with commentators globally highlighting the hold this duopoly already exerts over the advertising industry.

But in a week where Fairfax journalists in Australia strike in protest at cutbacks, and against a wider backdrop of losses and job cuts at traditional media outlets across Asia Pacific, it is especially concerning.

Where next? Publishing in general, and the ad tech industry specifically, is a challenging area, with multiple undifferentiated players, sometimes murky value chains, and VC money looking for safer havens. Many analysts predict massive consolidation in the years ahead. In fact with telcos and consultancies worldwide already positioning for unified marketing technology stacks, most would say the consolidation has already started.

Beyond that, The TradeDesk continues it’s roll with an IPO and recent big win on P&G; AppNexus and other major players forge a data alliance to bring much needed people based marketing data to open programmatic; and Integral Ad Science plus other key players have launched in the region, aiming to bring much needed transparency to what can be a difficult to navigate ecosystem. Even Google and Facebook cannot be sitting easy in the face of recent brand safety issues, fake news and Amazon putting increased focus on a server-to-server header bidding product that promises to put power back in the hands of publishers. P&G’s Chief Brand Officer Marc Pritchard has made a call for transparency and open measurement across walled gardens in recent speeches, and this also seems to be making an immediate – and deserved – impact.

Finally, a note from history. In the early 1900s, the United States had around 2,000 firms producing one or more cars. By 1920 the number of firms had decreased to about 100 and by 1929 to 44. In 1976 the Motor Vehicle Manufacturers Association in the US had only 11 members.

In many ways digital advertising, and the industry that surrounds it, is it’s own worst enemy. All dollars eventually become digital dollars, so it is the only show in town. But a show obsessed with the next shiny thing, full of incomprehensible – and often meaningless – metrics, and more importantly, critically lacking in real transparency. Programmatic has only accelerated these tendencies.

Google and Facebook have done a huge amount to bring new money into digital advertising by simplifying advertising for brand marketers. And they have reaped the rewards.

However, they are now part of a systemic change representing an existential threat to an entire industry – media, advertising, agencies, publishing, journalism are all caught up in this – across the region and globally. Change rarely comes without casualties. The struggle for monetisation continues.

A huge debt to Jason Kint (this chart in particular) and Brian Nowak at Morgan Stanley for the inspiration for this article, and the work they have done creating similar graphs for Global and US ad revenues. Corrections welcome. Numbers are based on Facebook and Google publicly filed earnings information and best industry advertising revenue estimates – but someone out there may have a better view. The major assumption in this data is to exclude Chinese advertising spend both from Google and Facebook earnings information and APAC industry spend estimates to avoid distorting the data in a market where Facebook and Google have small (although not insignificant) advertising businesses. All the data is available on a public Google sheet (yes, sorry, it’s Google!) here.

Notes and References.

1. Google 2017 1st Quarter Earnings Report: a. Estimated based on reported total APAC revenues x 90% (percentage of Google revenues represented by advertising) b. Excludes Google revenue in China estimated based on APAC revenue data sources.

2. Facebook 2017 1st Quarter Earnings Report: a. Estimated based on reported total APAC revenue by User Geography b. Excludes Facebook revenue in China estimated based on APAC revenue data sources.

3. APAC digital revenue data compiled from: IAB, eMarketer, GroupM, ZenithOptimedia, McKinsey & Company

4. APAC all media revenue data compiled from: IAB, eMarketer, GroupM, ZenithOptimedia, McKinsey & Company.

6 Interesting Start Up Ideas at Innovfest Singapore

1. V-Key managing trust and identity with virtual hardware on your phone

V-Key is a global leader in software based digital security. V-Key is the inventor of V-OS, the world’s first virtual secure element that uses advanced cryptographic and cybersecurity protections to comply with standards previously reserved only for expensive hardware solutions. How does it work? They create a virtual hardware smart chip within an app, meaning identity is held in the same way as on a cashcard smart chip – and with the same level of security. Interesting ultimately for anyone concerned with real world identity, which is why they already work with governments worldwide. Prepare for your passport to change in the near future. Trust simplified.

2. Handshakes automating corporate due diligence

Handshakes applies natural language processing and machine learning technology in an innovative way to analyse corporate data and publicly available unstructured data. The platform can then fuse this data with a companies existing unstructured databases to provide strategic intelligence about who to trust and who to do business with. Exciting stuff and sure to disrupt back offices globally – corporate due diligence is suddenly a trivial task.

3. Xjera Labs video analytics for crowd control

Xjera Labs focuses on revolutionary smart video content analytics (VCA) by implementing deep learning based VCA for various commercial applications. Kind of like Minority Report.

xjera_labs_crowd_scenario_sh_deployment

4. IOT Factory simplify the Internet of Things for normal entrepreneurs

IOT Factory have built a unique Software Platform to make any sensor, any device, using any network (M2M, LoRa, SigFox, BLE and many more) speak a desired language, through dashboards, reports, smart alerts, and easy integration capabilities. Essentially they’ve automated the back end of the Internet of Things so non-technical innovators can start to build on it. Thank you.

5. SettleMint, a blockchain for democracy

SettleMint is a fintech player working with distributed ledger technology. One of their projects, called SettleMint Ballot Box, uses immutable blockchain technology to record votes. In doing so, the company aims to address any doubts regarding the outcome of voting processes and elections. Use cases for the blockchain are crucial for pushing this forward.

6. Playpass bringing versatile Apple Pay / Paywave type technology to events

PlayPass are all about events and technology. They provide RFID solutions to allow better event management – in short every attendee gets an RFID wristband. From the moment the gates open real-time reporting tracks and displays the number of visitors on-site, which brands and activations are of interest to that visitor and what they consume and purchase.

Singapore Intensifies Focus on Data and AI Tech

SGInnovate this week presented ARISE, an Artificial Intelligence-themed event at innovfest unbound 2017 as part of a long term investment in AI and data driven technology. The anchor event of the Smart Nation Innovations Week, innovfest unbound is Asia’s largest innovation festival with more than 8,000 attendees.

ARISE is planned to provide a platform for researchers, academia and industry leaders to explore emerging AI trends and give insight into how it will affect the way we live and work in years to come.

Among the leading figures from the tech sphere at ARISE was Dirk Ahlborn, CEO of Hyperloop (first proposed by Elon Musk), who revealed an inside story of the smart people and smart machines powering the next generation of transport tech.

Macro trends such as machine learning, robotics in the workplace and in the domestic sphere, emerging technologies, and the march towards artificial sentience were also covered.

Steve Leonard, Founding CEO of SGInnovate, said: “Artificial Intelligence has the potential to dramatically impact many areas, such as Healthcare, Transportation and Education. In fact, without even realising it, we have all embraced some form of AI in our daily lives – such as virtual assistants in our phones – and the next few years will bring exciting advances in many ways.”

“We passionately believe that Singapore has the right resources to be an important hub for research, so the challenge for us here is to ensure we are leaders in the development and use of AI capabilities to improve the lives of people here and around the world. We think ARISE is an extremely timely event, and we look forward to the constructive discussion around the challenges and the opportunities, that AI will bring.”

Today, Singapore is already a fast-growing influence within the realm of AI with the country ranked second globally by field weighted citation impact for AI R&D.

On a global scale, the AI market is growing rapidly. It is estimated that revenue for the cognitive systems and AI market will increase from an around US$8 billion (S$11.1 billion) in 2016 to over US$47 billion (S$65 billion) by 2020.

To further boost Singapore’s AI capabilities, the National Research Foundation (NRF) Singapore recently announced AI.SG, a national programme in AI driven by a government-wide partnership with SGInnovate as one of the partners.

NRF will invest up to S$150 million over five years in AI.SG, which will catalyse and synergise Singapore’s AI capabilities to power our future economy with practical solutions to real-world challenges.

“As a private company wholly-owned by the Singapore Government, SGInnovate has one purpose – to help aspiring entrepreneurs in Singapore imagine, start, and scale technology-intensive products with the potential to be globally relevant.  We are working with entrepreneurs and investors in industries such as healthcare, energy and transportation, all of which are seeing a flurry of artificial intelligence (AI) startups.  The launch of AI.SG helps give a solid foundation which a wide range of activities in academia, research, corporates, entrepreneurs and investors can build upon,” added Mr Leonard.

Profiling the Anonymous Customer: Fully Understanding the Consumer Journey

Stephen McNulty, Managing Director Asia-Pacific and Japan at Progress, discusses the importance of gaining a comprehensive view of each customer’s journey and following a targeted approach based on the insights.

There are many challenges facing today’s marketers: pressure for growth, ever-growing marketplace competition and ‘always-on’ expectations from both customers and employers. According to a Forrester estimate, 57 percent of businesses across Asia Pacific are experiencing rising customer demands in this digital age. The mounting pressure to prove and improve marketing return on investment (ROI) adds yet another significant burden.  Meanwhile, rules of business continue to shift underfoot and change the playing field in which marketers operate. Thanks to modern technology giving us instant access to many sources of information, the way consumers are engaging with brands has changed. Customer decision-making changes according to the engagement channel and customers are better informed than ever before. Often they make buying decisions long before the first contact with a sales representative or stepping into a store. As such, there is a need for marketing and sales teams to adjust to these new customer behaviours.

Successful marketing in this new environment begins with objectives based on accurate insight into the customer journey. According to Forrester, in Asia Pacific, “businesses increasingly recognize that success will hinge on their ability to close the gap between available data and actionable insight”1. These insights will enable marketers to build customer personas, improve engagement tactics, leverage metrics, create targeted messaging, adjust the marketing mix and craft plans to drive future growth. However, exploding volumes of data and siloed systems can often stand in the way. Multiple marketing channels are proving a double-edged sword: on the one hand they give marketers greater reach, yet on the other they make it much harder to track and measure potential customers.

Working with only a fragmented customer view weakens digital marketing efforts. To gain a single customer view – as quickly as possible – marketers need tools that compile data from all marketing, sales and customer information channels and systems, including data from real-time known and unknown customer interactions. Organisations need a way to integrate data siloes to gain a comprehensive view of each individual’s customer journey, and discern trends that can be affected by marketing programs and campaigns.

Managing data assets

Developing a marketing plan which truly complements the new digital consumer-driven buying journey, combined with more traditional offline activities isn’t a simple task.

On-and-offline engagement data sets – click through rates (CTRs), data from CRMs, and social analytics – are too-often siloed and stored in different systems and formats. Data derived from emerging technologies such as smart sensors, connected devices and social channels only adds to the pile-up.

Manually completing the time-intensive task of unifying siloed data, often across multiple spread sheets, risks static data becoming obsolete.

Marketing automation tools offer a far more efficient solution for pinpointing and engaging with the customer, leveraging available demographic data. Some even provide suggested execution tactics and a 360 degree view into the customer journey. Authenticated contacts – those that have provided their details when downloading whitepapers or attending events – are essential for marketing automation tools to run effectively. However, in most organisations authenticated contacts represent just 2-3% of all recorded interactions. Leaving masses of data ‘loose’ in the cloud means potential customers remain anonymous, and this limits the ability of marketing programs to drive those contacts towards meaningful conversions.

Real-time information

To compile and analyse data from customer touch points across multiple channels – CRM, direct marketing or social media engagement, from initial contact to long term customer, marketers should make the most of the latest technologies. For example, some tools provide a central repository of individual customer interactions, and integratewith third-party sources todraw data from key systems. They can collate anonymous user profile information, assigning each a persona based upon tracked behaviour.

These same leading technologies also leverage machine learning to relate how groups of customers and prospects interact through different channels. They provide conversion recommendation ranking, tracking and personalization of mobile apps for efficient real-time marketing as well as more tracking control for site administrators, amongst other benefits.

A targeted approach

An effective marketer will always keep on top of the latest technology. If this seems a low priority to others, they must take note that in today’s digital world the relationship between salesperson and customer is increasingly detached, and the constant flow of new data means the customer journey is ever-evolving. The right technology plays a vital role in arming marketers with essential insight, as well as offering cost and time-savings in the longer-term. Marketers can only map and react to the shifting customer journey appropriately, and prove the direct relationship between marketing investment and results, if they broaden their reach whilst improving the effective targeting of both anonymous and known individuals.

New Advertising and Technology Report covers Data, Programmatic and the Future of the Web

The Economist has just released a special Advertising and Technology report, with comprehensive commentary on not only the current key industry talking points, but also the long term impact of new technology on the Ad business. Continue reading New Advertising and Technology Report covers Data, Programmatic and the Future of the Web

The Growing Importance of Audience Data and Programmatic Trading in Asia

Industry analysts regularly highlight the shift currently taking place in the way media is being traded, as the market moves from relationship driven buying to programmatically delivered electronic trading.

We’ve looked at this topic in detail previously in our series The New Digital Advertising Ecosystem, and it’s clear that programmatic will be an area of growing importance in Asia with a staggering 300% projected growth in APAC over 2014. Continue reading The Growing Importance of Audience Data and Programmatic Trading in Asia

The New Digital Advertising Ecosystem Part II

We have already covered the new digital advertising ecosystem at a basic level in a previous post.

Here we wanted to start looking at things in a little more detail with the help of LUMA Partners. Continue reading The New Digital Advertising Ecosystem Part II

The New Digital Advertising Ecosystem

Digital is evolving, but the new data-driven real time advertising ecosystem can be confusing.

In an attempt to bring some much needed transparency to ad exchanges and display, Ad Exchanger have a great series of posts dealing with some common questions.

Let us know if there are any other issues you think need a simple explanation, and we can help with answers.