Sammy Hsieh, founder and CEO of iClick Interactive, gave a presentation on managing change in the dynamic online advertising environment. iClick provides a data-driven marketing platform in Asia, using proprietary technology and algorithms to optimize cross-media campaigns. The company has experienced over 110% compound annual growth since 2009. Hsieh discussed lessons learned in managing change, the huge growth opportunity in China's online advertising market, and iClick's unique value proposition and momentum in serving leading industry verticals to achieve its goal of $120 million in ad spend by 2013.
Pre Engineered Building Manufacturers Hyderabad.pptx
Managing Change in the Dynamic Business Environment Today: Sammy Hsieh at SMECC - 20130223
1. Managing Change in the
dynamic business
environment today
Sammy Hsieh
Founder and CEO
Private and Confidential
2. My Background
•
•
•
•
•
•
1997 – British American Tobacco
1999 - LVMH
2001 – Joined Yahoo! HK
2005 – Launched Overture HK
2008 – Joined Efficient Frontier
2009 – Formed iClick Interactive
Private and Confidential
4. Company Overview
Founded in 2009; backed by a number of institutions, led by Bertelsmann,
Sumitomo, SSG Capital and Otto Group
First in the region to introduce algorithmic optimization and programmatic
media buying focusing on performance marketing inventories
Over 80 clients from Fortune 100 companies, world premier brands and
MNC; selected verticals include:
• Finance and Banking, Hotel and Travel, E-Commerce and CPG
Leading data-driven buy-side digital marketing platform in Asia
•
•
•
•
Tracking: Universal tracking and attribution
Technology: Robust ad-serving technology
Platform: Proprietary algorithmic cross-media optimization
Data: Over 100 million transactional cookies and 12 terabytes of click
log data
Offices in Hong Kong, Beijing, Shanghai, Shenzhen, Singapore and
Taiwan; 180 employees across the region
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5. Company Milestones
Jan 2010
Jan 2011
Jan 2012
Established Beijing and
Shanghai offices
Key China advertiser
win incl. Dangdang,
M18 and Joyo
Deloitte Technology Fast
500 Asia Pacific Award
and Fast 50 China Award
Feb 2010
Jan 2009
Established in
HK and focus
on local
clients only
2009
1H
Feb 2011
Series A Investment
from Sumitomo
2009
2H
Apr 2009
Operational breakeven
Accumulated over 20
clients
Dec 2009
Established R&D center
to build new generation
XMO platform
2010
1H
Established TW and
SG offices
90% advertisers’
migration to XMO
2010
2H
Sep 2010
80% advertisers’
migration to XMO
completed
Accumulated over 60
clients
Mar 2012
Established SZ office
2011
1H
2012
Feb 2011
Nov 2012
Series B Investment
Best Interactive Agency –
from Bertelsmann, SSG, Yahoo! BIC Awards 2012
Sumitomo and OTTO
Oct 2010
JV with Baidu to form
exclusive agency in
HK, TW and SG
5
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6. The Changing Online Landscape
Present
Late 90s to
early 2000
Key players led by a few dominant portals
that only offered impression buy and
position buy
- Highly fragmented landscape
- Valuable long tail traffic but difficult to
target
- Various charging models (e.g., CPM,
CPC, CPA)
i.e., increasingly difficult for
advertisers to reach out to desired
audience!
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6
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7. The Difficult Online Media Buying Process
Advertiser
s
Publishers
Ad Server
Agency
Creative
Ad Network
DSP
Performance
Agency
Media Planning
Ad Exchanges
Data
Ad Ops
Measurement and
Analytics
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8. iClick Unique Solutions
We facilitates the digital media buying process by helping advertisers
aggregate, bid and optimize inventory across different online marketplaces
Various
Exchanges
Advertisers/
Ad Agencies
Various
Publishers
Online
Users
Search Engines
Cross Market Optimizer
Display Ad
Exchanges
Video, Mobile
Ad Exchanges
Customer Data
Aggregator
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9. 3.0 Buy Side Platform
Media Resources
Programmatic Media
Planning
Campaign Objectives
• Maximize ROI
• Increase conversions?
• Lower CPA?
Data Analytics
Optimization
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10. Performance Marketing is Dominating
Performance-based model, which covers both search and display, currently in pole position
US Internet Ad Revenues by Pricing Model, 2005 - 1H 2012
57%
59%
39%
62%
67%
65%
USD 24 billion: the expected
value of performance-based
traded inventory in 2012
37%
51%
47%
41%
46%
48%
45%
33%
31%
31%
13%
5%
2005
4%
4%
4%
5%
4%
2%
2006
2007
2008
2009
2010
2011
1H 2012
Performance-based
Impression-Based
Hybrid
Source: iAB, Oct 2012, eMarketer, Sep 2012
Desktop Display Market $ Share, 2010 - 2017E
Indirect (long tail)
Mid-tier
Growing trends of performance driven display
ad
Premium
27%
28%
30%
31%
32%
33%
34%
34%
36%
32%
28%
25%
22%
19%
16%
14%
•
Reason: Premium inventory cost keeps inflating vs
under monetized indirect long tail inventory
•
Performance-based pricing for long tail inventory:
•
45%
46%
37%
44%
2010
2011E
2012E
2013E
2014E
2015E
2016E
2017E
•
Possible to achieve cost efficiency
52%
42%
50%
40%
Share of indirect inventory display ad
spending to outgrow other segments,
reaching 50% by 2016
Source: Credit Suisse Estimates, Feb 2012
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11. Real-Time Bidding (“RTB”) on The Rise
Performance-driven display ad is traded dynamically via RTB* under programmatic buying.
US RTB Digital Display Ad Spending
8.0
28%
30%
7.1
Growth of % spend via RTB on
DoubleClick Ad Network
25%
(US$ B’)
25%
7.0
22%
6.0
5.8
20%
5.0
4.6
13%
3.0
3.4
37%
Jan 11
Mar 11
May 11
39%
May 10
Jul 10
10%
22%
2.0
1.9
5%
1.0
0.4
68%
48%
15%
8%
4%
66%
56%
19%
4.0
64%
8%
1.0
0.0
0%
2010
2011
2012E
2013E
2014E
2015E
2016E
Jan 10
RTB digital display ad spending
Source: eMarketer, Nov 2012
Mar 10
Sep 10
Nov 10
% of total digital display ad spending
Source: “The Arrival of Real-time Bidding” from Google, 2011
“47% of advertisers and agencies intend to spend more on digital
advertising because of the benefits of RTB” – Survey by Google and Digiday 2011
Remark: RTB allows bidding on single impression for single audience. Buying inventory based on audience request targeting
based on data: geographic info, interest, demographic info and online behavior.
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12. A billion dollar question: will
China follow suit?
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13. The Scenario in China: Massive Growth ahead
Online ad spending growth in China more robust than in US albeit from low base; fueled by
large headroom for online population growth, high online time spent for users, low time spend
as % of online ad spend
Online ad spend
2012 ad spending (RMB B’)
2015 ad spending (RMB B’)
2012 – 2015 CAGR
China
79.4
187.7
33% (vs US: ~12%)
Source: iResearch, May 2012
Online exceeds Print media for the first time in 2012 and is 34%
greater than Print ad spend
China online marketing ad spending by category 2010 1015E
187.7
RMB B'
143.1
•
79.4
79.0
64.0
37.7
32.6
•
55.4
51.3
23.8
53.7
44.2
34.9
17.6
Strong growth for display ad
111.1
107.5
Total
Rapid search growth and will reach 59% of
total online ad spend by 2015*
•
Search
Display
Search and display ad drive growth in
China
Rising trend of performance-based
pricing (CPA/CPL) to reach 12.3% of
total display ad spending by 2015*
23.2
12.2
2010
2011
2012E
2013E
2014E
2015E
* Source: iResearch, May 2012. Search includes vertical search
Source: iResearch, May 2012
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14. Unique Challenges in China
The Chinese online market has a few key characteristics which press for needs for a more
effective way of display ad placement.
1. Difficulty in reaching target audience
Online Game
Market highly fragmented. As of Jun 2012, over
538 million of internet users in China and 2.5
millions China-based websites*
E-Commerce
RSS
Video
Product
Review Site
Answers
Forum
Wiki
2. Increasing pressure on ROAS
Rising cost for premium inventory (CPM and
CPT)
Weibo
Chat
Instant
Messaging
Bookmark
Photo
Albums
Micro-blog
Music
Review
Social Media
Social Media
3. Growing efficiency issue in ad
placing
Relationship driven sales of inventory instead
of using technology to add value
An unique opportunity for a crosschannel advertising and optimization
platform to thrive
*Source: CNNIC, Jul 2012
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15. What’s Next After Ad Exchange Adoption
With the rise of Ad Exchanges in China, it is likely that RTB is the next big thing
US
2005
Ad Network
Ad Exchange
2007
China
2007
2011
2009
RTB DSP*
Up Next
Remark: Demand side platforms, DSP, enable
inventory buying through multiple exchanges
with programmatic RTB capability.
RTB based display ad in China, 2012-2016
In China, Ad Exchanges arise in response to
the needs of the market to increase
efficiency
China RTB based display ad spending
4.50
RMB B'
4.00
3.50
3.00
2.50
2.00
3.91
1.50
2.36
1.00
0.50
0.52
1.22
2013
2014
0.13
0.00
2012
2015
2016
With number of DSPs growing in China, the
environment for RTB and programmatic
buying is building up rapidly.
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Source: IDC, 2012
16. Managing Change – The Vision
• Lessons learned
• Attractive marketplace
• Create the “Blue Ocean”
• Stay focus
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17. Managing Change – The Motivation
• Lessons learned
• Team formation – roles and responsibility
• Internal and external communication
• Share your success - ESOP
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18. Leading Industry Verticals
E-Commerce
(5 out of China’s TOP 10
E-Commerce players are using
iClick to make better decisions)
Travel &
Hospitality
Banking &
Finance
Consumer
Products
Others
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19. Over 110% CAGR in Past 4 Years
Reach Ad Spend of : US$120M by 2013
USD
140,000,000
120,000,000
87%
100,000,000
80,000,000
48%
60,000,000
197%
40,000,000
138%
20,000,000
Total
2009
2010
2011
2012
2013
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20. Managing Change – The Momentum
• Lessons learned
• Anchor clients
• Hungry for business
• Networking
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21. Conclusion
• Lessons learned
• Huge and high-growth market
• Market under-served and inefficiency
• Unique value proposition
• Financially healthy
• Management team with proven track record
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