The OnTheList flash sale platform fills a crucial gap in the Asian retail industry. By serving as a third-party vendor of members-only flash sales, it not only offers brands an environmentally friendly way to get rid of past-season stock, it also gives brands access to a growing consumer database with a more direct, D2C-style subscription consumer relationship. The two founders of OnTheList, Diego Dultzin Lacoste and Delphine Lefay, talked to Digital in Asia about their online and offline retail platform.
Digital in Asia: How did OnTheList find a niche in the Hong Kong premium retail industry?
Diego & Delphine: Prior to launching OnTheList, we worked in regional and international luxury/premium retail brands in Europe and in Hong Kong. With such a fast moving industry led by seasonal trends, there is often a lot of past-season stock occupying valuable warehouse space with few options to get rid of them. For many brands in Hong Kong, the only options available were either burning or burying the stock – both of which are not environmentally sustainable options.
That was when we saw an opportunity to launch an independent, third-party platform that would work directly with such brands to host flash sales and give life to old inventory that would have otherwise been destroyed. While this has been a concept well established and received in fashion capitals across Europe, we found that there was no such option in Hong Kong. OnTheList was the first of its kind in Asia. We have since held over 150 flash sales in partnership with over 250 premium brands in Hong Kong.
The “secret” here we believe, is our approach. Through the flash sales we host, we are able to offer consumers access to premium products at attractive prices, and brands the opportunity to clear past-season items and connect with new customers. While our sales are members-only, membership is free for sign up. Additionally, we cater to current consumer habits and preferences – opening sales from 8am to 8pm, making it convenient for shoppers popping in before work.
We also bucked the trend of going digital first – we started with an offline channel as we have always believed that physical presence creates a sense of desire for purchase – our physical flash sales are held over a short time frame of usually just four days, with stock replenished daily and sale mechanics changing. We have since extended our reach online for sales in Hong Kong, but our entrance into the Singapore market will similarly begin with sales happening in physical spaces as a priority.
DIA: Why is now the right time for expansion across Asia?
D&D: In the past two years since the inception of OnTheList, we have worked with a variety of brands, from fashion and cosmetics to wine and lifestyle, from mid-range to luxury. We have also kicked off our online platform. While our flash sales platform is well-grounded in Hong Kong, our regional brand partners are always asking for our services in neighbouring countries where there are few options to dispose of old inventory. With that, we decided it was definitely worthwhile exploring options in Asia.
Singapore was our first country in mind due to similar customer shopping behaviour and general lifestyle similarities. This coupled with Singapore’s strong economy and economic policies, makes it a great country for our first step overseas.
DIA: How are consumer retail habits across Asia changing? Any differences to the West?
D&D: There has definitely been a shift in consumer premium retail habits. Many studies state that millennials are proving to be the strongest demographic segment spending on luxury – brands must cater to this change and understand millennial shopping behaviour both in-store and online. While millennials enjoy finer products, they are also a price sensitive demographic and brand loyalty is not as easy to maintain as it was once before. In recent years, both retailers in Asia and Europe have enjoyed huge profits accelerated by Chinese shoppers, whilst Western counterparts who enjoy the luxury as well have a vastly different spending behaviour.
DIA: How do you help minimise the environmental impact of fashion retail?
D&D: On average, 217,000 kg of textiles would be sent to landfills daily in Hong Kong. Through flash sales, brands are able to dispose of old inventory in a more sustainable form as the old stock would not go to waste and brands would still receive some returns on the unwanted inventory. In the past two years, we assisted over 250 brands, across premium fashion, homeware, and cosmetics, in holding over a hundred flash sales and selling over a million items that would have otherwise gone to waste. For items that remain after our flash sales, we always encourage the brand to donate them to charity and continue to help people in need worldwide.
In a number of ways, blockchain technologies offer advantages over the current financial system. A case in point is foreign exchange, one of the key speculative use cases for the blockchain maximalist: in short, it’s difficult, expensive and slow to send $10,000 overseas using our current system of banking; but it’s easy, cheap and fast to send the equivalent amount in cryptocurrency, free from foreign exchange fees, in just seconds. But no one has actually proved out this use case. Yet.
Enter Singapore startup TenX. They’ve created a global credit card, using blockchain technology to take advantage of fast and cheap foreign exchange, but running on existing MasterCard and Visa infrastructure to ensure payment is easy and scalable.
On the front end users can make payments anywhere Visa or Mastercard are accepted. On the back end, the credit card is linked to a cryptocurrency wallet, meaning assets are held in Bitcoin, Ethereum or Litecoin. TenX instantly converts the cryptocurrencies stored in the wallet into the native fiat currency when a transaction is made, whatever the location.
A few weeks back Digital in Asia met with Toby Hoenisch, one of the founders of TenX, to talk about their ambitious vision to become the only platform necessary to create a bridge between cryptocurrency and existing global payment systems.
Digital in Asia: Good to catch up Toby. Is it true that you launched your first start-up four years ago? That’s pretty early for blockchain.
Toby Hoenisch: Back then, we pitched another startup, not blockchain. It was the same co-founders or partially the same co-founders anyway. It never went anywhere but we learned a lot of lessons back then.
DIA: What were the biggest lessons?
TB: Get users. Don’t just build and hope for the best.
DIA: That’s solid advice for any startup! So, when did TenX kick off?
TB: Three years ago. And that was still quite early for blockchain, three years ago. I’ve been in the blockchain space for five, six years. Part of the funding we used for the previous startup was through early gains and Bitcoin. I’m not a trillionaire right now like how I might wish, because we spent all the Bitcoin we had back then on the previous startup. But we’re doing quite well for our company, so it’s all goo
DIA: What was the inspiration behind TenX?
TB: Connecting the blockchain and crypto world with the real world. Three years ago, it was still crypto-geeks and nerds like myself, and everyone else was like, “What the heck is this?” And it was really disconnected. We wanted to bring the benefits of cryptocurrency to real people. And the first thing to solve is making it spendable.
DIA: Can you just quickly detail what TenX does and the value proposition?
TB: TenX makes cryptocurrency expendable. We have a cryptocurrency wallet. You deposit Bitcoin, Ethereum, tokens – whatever it is – and we give you a debit card that you can attach to your wallet, and then spend it anywhere in the world where Visa and Mastercard are accepted.
DIA: In many ways, you’re moving into an area that is almost the inverse of cryptocurrency, certainly ideologically. And payments are also seeing more regulation recently.
TB: You’re right, it can be complex. But what we do is simple. We’re basically the bridge to the real world of payments. Right now, we have Bitcoin, Ethereum, and Litecoin. But our goal is to get to 200 cryptocurrency and tokens ready for payments within another year.
DIA: And what do you think is the future of the payment space in the short and long-term? Who will be the big winners and losers?
TB: Very early to tell. Depends on the timeframe. We’re still so early in crypto that what we do actually makes sense. Because we connect this new industry to the existing payment rails that are out there. Visa, Mastercard, maybe UnionPay or Alipay in the future. You have to remember, merchants don’t care about crypto right now because there are not enough users out there. Merchants care about revenue first. So for the next five years, I think it will be players like us bridging crypto to existing payment rails. But once you have sufficient penetration on the general population, you actually can do peer to peer payments. And then you can actually directly own merchant payment relationships. Our business will have to change and adapt because there are major interests betting on those legacy players. Crypto will disrupt, but it will take a while, and it may shape up quite differently to how it looks now.
DIA: So what does the future look like for Visa and Mastercard?
TB: They will still be around for a long time. Simply because they’re already there. But they will have to lower their fees to compete with crypto, and the channels will change. The cards themselves have a ten-year shelf life. You might still be paying using Visa payment rails in the future, but you’ll use your phone or other technology. The terminal will still stick around for a while.
DIA: TenX is based in Singapore. How many people do you have? How have you found Singapore as a place to set up a blockchain business?
TB: We have 60 people in total at TenX, and 80% are based here in Singapore. We’re a global company. Crypto is always global. We do have a big user base in Europe. Mainly because three of the four co-founders are Austrian. We have a very strong German-speaking user base. Singapore is good because it’s a relatively friendly regulatory environment. It was a bit of a bet three years ago as a place to build a cryptocurrency finance app in Asia, but today, it turns out it’s one of the top countries to be as a cryptocurrency business.
DIA: How many users do you have and how fast is your growth?
TB: Maybe I should share that we had a bit of a setback earlier in the year. We launched our cards last year, and we scaled really quickly to 200,000 users towards the end of the year, and then our partner bank lost their license. Their Visa license. So our card stopped working. And now we’re working with five different insurers to deliver a live product. So the growth metrics don’t make sense at this point. We are on it. We have new insurers. We have multiple strategies, and we’re trying to get our own license so we don’t have to worry about that anyway.
DIA: Something similar happened to Coinhako, in that their fiat on and off ramps got locked down. Was your issue a Singapore problem, or a global problem?
TB: No. It was a European bank, actually. The good side to that is that this specific payment bank was also the issuer for many of our competitors. So now we know that 200,000 is not the market users. The market is way bigger than that, and all of those users are waiting for a card.
DIA: Who wants to spend their crypto? The market is so focused around HODL right now.
TB: That’s looking at it in reverse. Of course, a lot of people still look at crypto as an investment and hope it should go up. Our users have passed this step, and are like, “I don’t want the old world.” Because there is more friction in the old world than there is in the new world.
Even though the crypto world is still smaller, the financial services you can access here are still less in number than in the old world, this is changing rapidly. And advanced users want to stay in this world.
Some of them, yes, they want to get the maximum upside, but they stay in this world because it’s a more seamless experience everywhere on the planet. And we just add payments to that, so you don’t have to actually go back.
DIA: How do they get their crypto in the first place?
TB: They are already in this world.
DIA: Sure, but unless they’re mining, sitting on a massive pot of crypto which they’re spending bit by bit, or they get paid in crypto, they’re still going to be operating in the non-crypto world. They’re still going to have a bank account where real money can come in. How many people are 100% in the crypto world right now?
TB: We pay salaries in Bitcoin for a lot of people. It’s just so much more convenient. If you run an international company, a small one, you can’t figure out payroll in every country in the world. That’s hard. Bitcoin solves that problem, super easy.
DIA: Cool. Do you think that supports the Bitcoin store-of-value argument?
TB: I mean, Bitcoin has a volatility problem, which is one of the things that people don’t like, or don’t want to put all their money in it, which is a very valid point. In the crypto world, Bitcoin is still the strongest store of value. If it’s the one you should bet on depends on your personal situation. I would say everybody should have some money in the crypto space, some Bitcoin, and then allocate, whatever.
DIA: So, at the moment, you’re a bridge between cryptocurrency and the world of ‘real’ money. Do you have your own token to facilitate this?
TB: Yes. We have the PAY Token, and we launched token sale last year, June. And we continued to work on the exact model, mainly because the regulators keep changing the rules, but yeah. It’s been working very good. When you compare a token sale or a token, compared to venture capital, venture capital, you get around one, two, three investors. Hopefully, they’re all strategic, which they never are, maybe one.
Or you have like us, 50,000 token holders, probably most of them are users. They’re directly related to you. They will tell you what you do wrong. They will care. They will come to your user testing. It’s just so much better. That’s the huge upside that a token sale can do that venture capital just cannot do. Base it on your boredom, hopefully, you pick the right guy to tell you what to do, but maybe one or two. You have 50,000.
DIA: And that community markets for you as well, and they’re influencers.
TB: Yes. Of course. It just goes hand in hand. It’s like, token holders and users, it becomes like a community form of money, or token, or whatever you want to call it. And it incentivizes people to really stick with us.
DIA: That’s awesome Toby. Thanks very much. Very interesting discussion.
Digital in Asia asked Jason Fairchild, Co-Founder of OpenX, one of the largest global sell-side platforms, to tell us about the state of programmatic advertising in Japan.
Digital in Asia: How is the Japanese market approaching programmatic advertising? Is Japan ahead, behind, or just different compared to other global programmatic markets?
Jason Fairchild: Programmatic is taking off in Japan, however, the market is still in its nascent stages, and spend is lower than other markets, such as the US and China. Despite this, more marketers than ever are using the technology to boost reach, relevance and impact, and a recent study from PwC predicts that the increasing demand for programmatic technology is set to push Japan’s media market to US$170 billion by 2020.
It’s not surprising that programmatic is growing as the technology streamlines the buying and selling of online ad space, allowing publishers to efficiently monetize their online content and brands to execute audience-based buying at scale – that is, putting the right message in front of the right user at the right time at massive scale. With investment in online ads expected to increase by more than US$3 billion, marketers will benefit from leveraging this technology to make their advertising more efficient.
DIA: How is OpenX addressing the issue of quality in digital advertising?
JF: As programmatic grows in Japan, it’s important to ensure the advertising ecosystem remains a clean and safe place in which to do business. In 2018 alone, OpenX is investing US$25 million in different quality-assurance measures, and we’re making sure we comply with industry recognised quality standards and have received independent certification for our efforts.
It’s important to note, however, that there are steps that everybody can take to take to stamp out bad practices and tackle fraud. Technology companies, marketers, publishers and every other part of the supply chain all play a role in solving for the quality issues across the industry.
With the recent emergence of new industry standards and initiatives, marketers are now at a point where they can make informed decisions about their technology partners, based on the partners’ commitment to quality.
One example is the IAB’s ads.txt initiative, which has nearly stamped out the threat of domain spoofing, also known as misrepresented domains, and dramatically increased clarity in the supply chain by public record of who is authorized to sell a publisher’s inventory. Another is third-party certification with Trustworthy Accountability Group (TAG), a cross-industry accountability program to create transparency in the business relationships and transactions in digital advertising. Technology companies who meet the stringent standards for certification outlined by TAG earn a seal of approval, and because these demonstrate good practice among vendors, these standards can help buyers and sellers make better decisions on technology partnerships. But it’s important to note that these quality controls are not automatic – they require proactive choice by buyers.
DIA: Mobile now accounts for half of all digital ad spend in Japan. What does this mean for advertisers?
JF: More Japanese consumers own smartphones than ever before, so it’s not surprising to see users spend more time on mobile devices, which in turn drives a marked shift in content consumption towards mobile. Advertisers and publishers have picked up on this trend and now understand that mobile has become the place where consumers spend a majority of their time, and they must adjust their digital strategies accordingly.
To effectively take advantage of this growing channel, advertisers will need to incorporate a range of mobile-specific ad formats and move aggressively away from the desktop-first mentality that most of them have been using. This includes building creative that considers the smaller screen sizes and leveraging rich location data to add more context to their campaigns. On the other hand, publishers must also think about screen size and the user experience to ensure that users aren’t bombarded with too many ads or ones that impede a users’ ability to see or read the content they want.
DIA: Speaking about mobile, what is the future of in-app advertising in Japan and globally?
JF: Quite simply, in-app advertising is the future of mobile advertising. Japanese adults spend three hours and three minutes every day consuming digital media, and in 2017, mobile accounted for more than half of all time spent on digital, so the opportunity is huge.
Studies reveal that the most lucrative in-app ad opportunity is a new innovation called opt-in video, where the consumer is given something of value in exchange for engaging with a video ad. This type of video advertising has proven to be the most consumer-friendly ad format in mobile, and in fact, consumers like it three times more than a non-skippable pre-roll. Completion, viewability and engagement rates are significantly better with opt-in video than other types of mobile video, and the consumer-friendly nature of the ad format makes it a great option for publishers and app developers trying to monetize their content as well.
DIA: What are OpenX’s plans for the wider Asia Pacific region?
JF: Both our Japan and APAC business are continuing to grow. In fact, early this year we announced record new revenue growth in Japan of 52% year-on-year and have signed more than 40 new clients in 2018 alone. The growth derives from us being the largest independent advertising exchange in the country (second only to Google) at a time when programmatic is gaining traction in Japan.
As a result, last quarter we announced that we will be opening our Singapore hub, and plan to move into Australia by the end of Q1 2019. To complement our expansion, we’re committed to growing our team in the Asia Pacific region. We appointed Satoru Yauchi as the director of partner services in the region, who has already played a key leadership role on the team since joining late 2017 and will continue to support us in delivering on our ambitious plans for growth across the region.
There’s been a lot of scepticism recently about where advertising is headed. Online advertising has seen massive growth over the past decade thanks to its flexibility, transparency and measurability—not to mention the ROI. But with this growth comes a new challenge: more than before, marketers must fight to break through the clutter and connect with their target audiences. The rise of obtrusive and irrelevant ads on the web has led to a concurrent surge in ad-blocking software as consumers become frustrated with or indifferent to the content bombarding them. In response, some of advertising’s biggest spenders have started to shift their focus back to real-world tactics such as experiential marketing. This leaves advertising at a tricky crossroads, and got me thinking: Will digital advertising always remain an important instrument in a company’s marketing toolbox? And as an advertising company, how can and should we push advertising to adapt if we believe it to be the way forward?
Xaxis wholeheartedly believes that digital advertising needs to deliver tangible results to continue to be relevant, and as such has repositioned to focus its entire offering on client outcomes. The best way to do this was to understand the client’s advertising goal that ties as closely as possible to the true business outcomes they are trying to drive. So what do marketers need to think about and do differently to truly engage consumers and drive measurable business results?
Artificial intelligence (AI) has completely changed what we can achieve in advertising, from media buying and planning, how to achieve set targets, and the metrics used to understand success. As my colleague Sara Robertson, VP of Product Engineering for Xaxis once said: “AI is like a spreadsheet on steroids”. The potential of AI lies in its ability to see the bigger picture. We’ve made AI and machine learning an integral part of our offerings, used to find and define audiences, refine our creative messaging, generate audience personas, and develop bidding strategies, all of which can transform a digital advertising strategy to drive remarkably improved results for clients.
And while it is true that consumers hate interruption, it’s never a bad thing when advertisers are forced to adapt by creating content that consumers enjoy. One example is a creative new type of ad that has emerged in China to play in breaks of TV dramas online. These ads utilize the TV shows’ original content and narrative arcs, and feature the same actors in their on-screen costumes, making the ad almost indistinguishable from the original content to hold the audience’s attention and pique their interest. This type of advertising is expected to surpass 2 billion yuan (US$311 million) in sales revenue this year, up from 800 million yuan in 2016.
Advertising with influencers also holds increasing importance in the marketing mix as a way for brands to create trust and credibility with consumers. Over the last few years, influencer marketing has skyrocketed to the point that it has become a category of its own. The premise for this is that consumers trust people they already follow rather than an obvious advertiser. Brands are therefore working to get attention from consumers by channelling their message through people with extensive and trusting networks, commissioning influencers to co-create ‘native’ content that advertisers can then amplify. All of this shows that content needs to mimic what consumers already enjoy in order to engage, but advertising itself won’t disappear.
At the end of the day, approaches such as experiential marketing can be a highly valuable way for many companies to increase brand exposure and customer loyalty. But they shouldn’t necessarily replace advertising altogether. Marketers need to look at the bigger picture and focus on reaching business objectives by quantifying success with real metrics and conversions—regardless of the marketing tactics they choose to convey their messages. That means connecting with your customers authentically and holistically, wherever they happen to be – though as we know, people are spending more time online now than ever.
For Xaxis, repositioning our offering to focus on client outcomes was the most logical move. To align with a client’s true marketing and business objectives—and deliver results to hit those objectives and maximize ROI—should be the goal of any marketing tactic. What really sets digital advertising apart is its ability to do exactly that, with more transparency, efficiency and measurability than any other approach. For this reason, we don’t see it dying out anytime soon.
In 2017, China became Singapore’s top market for both tourism receipts and visitor arrivals, contributing 3.2 million tourists. As one in a series of parallel moves seen worldwide, mobile payment provider Alipay also launched it’s payment platform to allow Chinese tourists to pay in the way they know best.
Alipay is China’s largest mobile and online payment platform, with over 520 million active users. Alipay has evolved from a digital wallet to a lifestyle enabler where users can hail a taxi, book a hotel, buy movie tickets, pay utility bills, make appointments with doctors, or purchase wealth management products directly from within the app.
Nielsen Outbound Chinese Tourism and Consumption Trends
China is just back from the two-month-long 2018 summer holiday, during which millions of Chinese travelled abroad for pleasure. With Alipay’s growing presence outside of the Chinese mainland, Alipay overseas spending skyrocketed, with the platform processing 2.6 times as many in-store overseas transactions this summer as compared to 2017.
Asia continued to dominate the list of Top 10 countries and regions in terms of summertime overseas Alipay transactions. Hong Kong topped the list, followed by Thailand and South Korea.
In Singapore, the average spending per Alipay user was 1759.13 RMB (approx. 352.35 SGD) in the summer of 2018. This was a 32% average increase in spending per Alipay user and a 320% total increase in spending for the same period in 2017. The number of Alipay transactions in Russia also increased by over 5000%, as Chinese travellers flocked there in July for the FIFA World Cup.
Of the 80+ airports that support instant tax refunds via Alipay, airports in South Korea recorded the highest amount of tax refunded, followed by airports in Europe.
Mobile growth continues to hit record highs in 2018, built on a foundation of programmatic delivery. And that makes it more important than ever to get mobile innovation right, says Itamar Benedy, CEO, Glispa. In this Q&A with Digital in Asia, he talks about GDPR, Mobile Network Operators (MNOs), playables and performance marketing on mobile.
How important are Mobile Network Operators and their data in the mobile first era?
Mobile Network Operators (MNOs) are the sleeping giants of ad tech, but as proven by the recent AT&T AppNexus deal, these titans are waking from their slumber. MNOs will be incredibly powerful in the mobile advertising industry due largely to the vast scale of user data they hold which, if utilised correctly, places them in an extremely strong position to challenge the Facebook and Google duopoly.
What puts MNOs at an advantage is the opportunity for value-added services, delivering engaging content to users and creating additional revenue. They provide an exciting alternative to the limited in-app inventory currently available for mobile advertising. The most important part of mobile advertising is having a direct line of communication with the audience, and MNOs can provide the channels necessary to interact with users through multiple touch points, consequently maximising their potential.
To date, MNOs have done little to harness the power of the data they hold, but we expect to see others follow AT&T’s lead through commercial acquisitions. Hong Kong conglomerate CK Hutchison is one company that has noticed the potential of MNOs and, despite the European competition commissioner blocking its acquisition of the UK’s O2 network, it recently bought a 50% stake in Italy’s Wind Tre in a $2.45bn deal.
How is GDPR impacting Glispa and the wider industry around data?
In spite of the confusion that still surrounds the GDPR, its introduction is largely positive. GDPR is forcing the industry to be transparent and deal with data responsibly, and will ultimately minimise the number of unethical vendors. This will enhance the user experience and pave the way for more open and honest relationships between brands and consumers.
GDPR has also compelled advertisers to think more creatively about campaigns to encourage users to opt-in. We’ve seen an increase in the creation of playable ads because they include an opt-in element that incentivises users to consent to data collection so they can play the game, without forcing them to do so.
As a German-founded company, Glispa has followed strict data usage regulations from the outset, so the introduction of GDPR is having minimal impact on our business operations. We view the GDPR regulations as an exciting means of expanding our creative potential by finding new, fun ways of encouraging user opt-in.
Tell us about playables – how do they work, what are advertisers doing with them?
Playables are entertaining and rewarding mini games that provide a more meaningful and interactive experience than traditional ads. They are most commonly used in the gaming sector where the concept is much the same as test driving a car; allowing the consumer to ‘try before they buy.’ Playables are highly successful in this sector as users who go on to install the full app already know what the game is like and are highly likely to play it regularly.
But playables aren’t just limited to the gaming sector, any brand can create a fun and interactive game ad that will entertain and engage its target audience. Giving users the ability to interact with content leads to better brand recall and enjoyment, thus reaping positive conversion rates and ROI. Interactive ad formats also have map tracking so even if a user does not take the required action, advertisers can see where interactions are happening and derive insights to improve future consumer communications.
Playables are the most effective way to increase creativity within mobile advertising and, as demonstrated in a study by AdColony, are consistently voted as a favourite ad unit, but so far adoption remains relatively slow.
Why are more advertisers not using the playables format?
There are a number of explanations for the slow adoption of playables, all of which will be made redundant in the future. Firstly, brands outside the gaming market don’t always understand the relevance of playables, after all, why make a mini-game when they don’t have a full game to sell? But it is becoming increasingly clear this is an outdated viewpoint and many non-gaming brands, such as Burger King, are making good use of playable ads to boost user engagement.
Complexity is another hindrance to playable adoption. As a new format, there are no proven templates advertisers can use to design and build ads, making playables time consuming and expensive to create. With limited playable case studies in most verticals, advertisers are understandably reluctant to take the risk of investing in the format but this will change as a defined playbook emerges and the complexity and cost of production decreases.
What are your thoughts on the Facebook and Google duopoly?
A noticeable theme of Cannes Lions this year was that companies are ready and willing to challenge the duopoly. The AT&T Appnexus deal and OATH’s acquisition of Yahoo demonstrate the huge leaps telcos are taking and how they are gearing up for battle. These telcos now have the data, user-base and scale, as well as the funds to really pose a threat. Moreover, with Facebook’s well-publicised lack of transparency, it may not take much for companies to start asserting their dominance over the giant.
How do you see the evolution of performance marketing and the role of mobile as a channel?
Performance marketing has evolved from its affiliate roots to play an ever-increasing role in marketing strategies. The main reason for the growth of performance marketing is its unique measurability, which is vital at a time when the pressure on marketers to justify digital spend is increasing and transparency is highly valued.
Mobile is a particular driver of performance marketing. Consumers spend huge amounts of time on mobile devices and we see exceptionally high levels of engagement but mobile advertising is difficult to measure so marketers are turning to performance marketing, which can achieve specific KPIs such as app downloads and re-engagement.
As it becomes a more trusted and widely used tactic, performance marketing is moving beyond traditional monetisation metrics such as clicks and downloads toward more meaningful goals such as user engagement and lifetime value. In fact, performance marketing is proving so effective at driving these outcomes, marketers are beginning to take best practices from this technique to use in brand campaigns.
The report surveyed 129 professionals working in programmatic media at marketing agencies across APAC, EMEA, and North America (NA). It explores the challenges and opportunities the shift to programmatic media trading is creating for agencies, the impact this has on their relationships with clients and publishers, and how they are leveraging technology to create differentiation and provide new value to partners.
Despite programmatic’s ability to drive greater ROI for brands, APAC agencies have yet to take the plunge into owning and operating their own programmatic stack; 66% use either third-party technology exclusively or a combination of third and first party technologies, considerably higher than their EMEA (42%) and NA (44%) counterparts. But building their own ad tech stack is a top priority in the next 12 months for 46% of APAC agencies. So what is driving this change?
Building Bridges to Publishers
Surprisingly, agency respondents from APAC claimed that increased use in programmatic buying technology has resulted in improved relationships with both publishers (75%) and brand clients (85%). In fact, 33% of APAC agencies cited a more direct relationship with publishers as one of the major benefits of programmatic, along with access to a greater total number of publishers (45%). Building strong partnerships with relevant publishers is seen as critical to ensuring that clients get a disproportionate advantage in the marketplace, beyond pricing. Interestingly, and probably helping cement better relations between publishers and agencies, only 12% of respondents cite lower CPMs as an expectation from brands for moving more spend to programmatic channels.
Whereas programmatic has been blamed for the rapid rise of ads appearing in brand unsafe environments in NA and Europe, the story in APAC is different. 39% of agency respondents in APAC cited brand safety as one of the major benefits of programmatic technology, and 35% touted strong fraud and brand safety rates as one of their core differentiators, more than any other region.
This could be due to fraud being directly proportionate to media CPMs. With the exception of Australia and Japan, some of APAC’s largest media markets have a significant supply skew, leading to reduced CPMs and from there lower fraud rates than in other parts of the world where it is harder to balance scale, quality and value.
Despite the increased use of automated technology for media buying and reporting, there remains a transparency disconnect for APAC agencies; 67% of respondents say transparency around programmatic ROI is a major benefit to their clients, but 64% still cite a lack of transparency around media execution as their biggest challenge. To compound the issue, 58% of respondents say the growth in programmatic is causing brand clients to demand still greater transparency from them.
What’s on the Horizon?
The shift to digital, and more recently to programmatic, has enabled brands and their agency partners to pull off ever more impressive marketing feats and tactics. However, perceived shortcomings in data activation and audience segmentation are compelling many agencies to turn inward to assess how they can fill gaps through proprietary technology solutions and capabilities. According to the research, priorities for APAC agencies over the next year focus on driving even stronger ROI and delivering real business outcomes through furthering omnichannel capabilities, securing and ring-fencing client data, and building out data science teams and custom buying algorithms. But understanding cost implications and having the build vs buy conversation is critical, as 62% of APAC agencies cite cost of maintenance as the number one criteria for evaluating tech ownership decisions.
In an industry and region where things shift rapidly, one thing feels certain: growth in digital will continue unhindered. And what goes digital eventually goes programmatic. The agency that adopts tools, strategies, and mindsets today that maximize programmatic’s strengths and solve its challenges will be well positioned to deliver greater value to brands and create strategic moats for their own businesses for the foreseeable the future.
The latest What the Tech? report from Ying Communications and Catch On details the trends stemming from the crossover between the travel and technology industries. Far from dehumanising travel, these latest technologies are actually making travel experiences richer and more personal.
A few of the key new travel trends covered include:
Internet of Things (IoT) — With IoT, travellers can wake up to the scent of a perfect cup of coffee at the click of a button. Hotels can program showers to come on at an optimal temperature to help guests kickstart their day.
Blockchain — Imagine travelling to an airport, catching a plane, arriving at a hotel and walking straight to the room without ever encountering a single queue or having to share any personal information. This could soon be a reality with the adoption of blockchain based biometric devices
Robotics — Many believe there’s no replacing the human customer service agent. Or is there? Robots are already guiding passengers and cleaning up after them in Korea’s Incheon Airport and ferrying baggage autonomously across England’s Heathrow and Gatwick Airports.
As a rising star of Southeast Asia’s media tech scene, and the publisher behind theAsianparent.com, AsianMoneyGuide.com, and HerStyleAsia.com, Tickled Media reaches over 12 million women monthly across SEA via its content and community platforms.
We caught up with Adrian Watkins, newly appointed Chief Strategy Officer at Tickled Media, to discuss plans for the future and his enhanced role within the business. As part of his expanded brief, Adrian works alongside Tickled Media Founder and CEO Roshni Mahtani to help develop, communicate, execute, and sustain strategic initiatives ranging from commercial positioning through to wider business rationale.
Digital in Asia: What have been your team’s greatest achievements in the past 12 months?
Adrian Watkins: It was a year in the making, but we’ve redesigned and re-engineered the front-end of theAsianparent, which has resulted in faster loading speeds, higher page engagement, better email capture, and innovations in commercial solutions. We’ve also created an enhanced Brand Solutions programme that offers clients a flexible, data-driven playground where they can manage budgets, split-test new concepts and creatives, and find what resonates with their desired audience over a longer period of time. This process takes them from market research, through to content creation and distribution, social media / KOL amplification, and finally to campaign conversions.
DIA: Have you been focusing around programmatic?
Adrian: We’ve maximised our network yields by signing upwards of 15 new vendors in the automated revenue space, offering a mix of programmatic, outstream and native capabilities, and allowing for better commercial terms while lessening our reliance on Facebook and Google.
But my proudest achievement is building up the team. There is no greater display of growth than a team member picking up a pen to explain in detail what he or she is saying on a whiteboard!
DIA: What’s your next big project as CSO?
Adrian: This company is on the cusp of something truly exciting – becoming the largest women-focused media tech company in the region. Securing our Series B funding earlier in the year allowed us to launch new content verticals to better inform and empower Asian women: Asian Money Guide and HerStyleAsia. We’ve got a couple more in the pipeline so that’s what’s keeping the team on their toes.
Meanwhile, we just re-launched our app for theAsianparent and it’s pretty exciting to be able to work on the largest social network for parents. With easy-to-use Q&A, mums can harness the collective wisdom and experiences of our active community of parents, experts, and parents-to-be, as they share and grow their parenting knowledge.
Watkins was the Founder and Managing Director of data, tech, and marketing consultancy firm PerformanceAsia, and was previously a Board member of the Asia Content Marketing Association (ACMA). He also has a proven corporate track record within world-class organisations such as Virgin, News Corporation, and CBS, leading initiatives in business development, company acquisition, monetising existing and new territories, and building and managing commercial and content teams in multiple countries.
Both Tickled Media and the wider industry stand to benefit from this appointment, given Watkins’ client focus and data mastery. Sachin Pagey, Director of Strategy and Marketing Services at Mega Lifesciences, weighs in: “Adrian’s promotion to Chief Strategy Officer is a great move for Tickled Media and one that Mega We Care fully endorses. I’ve worked very closely with Adrian over the last year for the launch of Baby Natura, our plant-based whole food, in the region. The depth of insight, energy and enthusiasm he’s brought to our long-term partnership is much welcome. We look forward to enhancing this relationship with theAsianparent even further as we launch our new products and move into more markets in 2019. With Adrian’s promotion to CSO, the long-term outlook for Tickled Media is undoubtedly positive!”
Tickled Media Founder and CEO Roshni Mahtani added: “At a time when tech and media are evolving at breakneck speed, we need someone to help usher Tickled into a new era of insight-led innovation. We’re looking no further than Adrian, who has done remarkable things for our campaign delivery process, smoothed out so many operational hiccups, and brought in streams of new revenue.”