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How This Singaporean Adtech Company Is Winning in a Shaky Industry

They employ mostly millennials, for one

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BY Tricia V. Morente - 25 May 2017

PHOTO CREDIT: Getty Images

There’s no shortage of literature spreading across the Internet about the adtech (advertising technology) industry being in a precarious position globally.

Coverage by the Financial Times points to global adtech VC financing crashing to its lowest point this year, with VC deals predicted to be at 343 by year-end—a 17 percent drop from 2015’s 414 deals. While this is largely due to the growing dominance of advertising giants Google and Facebook, it doesn’t help that the adtech space is riddled with bad seed and deadweights that contribute to negative industry sentiment: undelivered growth and valuation promises, unstable arbitrage business models, ad fraud, click-bait, and fake metrics.

And yet marketing demand for intelligent digital ad and marketing technology has never been more promising. A whitepaper by Ashu Garg, general partner of Foundation Capital, predicts that “technology spend by CMOs [chief marketing officers] will increase 10x in 10 years from $12 billion to $120 billion.”

That’s a huge wealth of opportunity for the industry, and there are start-ups cashing in as early as now.

AdAsia Holdings, a Singapore-headquartered adtech company, recently raised $12 million in Series A funding from JAFCO Asia, which the company will use to fund footprint expansion into new markets, headcount growth to 400 by end 2018, and product development initiatives to speed up the integration of artificial intelligence (AI) and machine learning into its existing products and future innovations.

Having attracted such significant amount of funding in an industry that’s going through a reckoning—this is the largest disclosed Series A funding round for a Southeast Asian company, and the largest single investment made by JAFCO Asia in one investment round—what is AdAsia Holdings doing right?

Inc. Southeast Asia talks to CEO and Founder Kosuke Sogo about his company’s bid to become “the biggest advertising technology company in Asia.” Here are some insights:

1. They empower marketers to be agile

When Sogo co-founded AdAsia with Otohiko Kozutsumi in April 2016, there were more than 3,800 players across the advertising and marketing technology space. “Liaising with separate vendors for different activations can be a very time-consuming and expensive affair, not to mention being exposed to varying degrees of transparency that can make measuring campaign effectiveness a nightmare,” says Sogo, adding that this is why P&G’s Chief Brand Officer Marc Pritchard recently called for simplification of the industry.

With the AdAsia Digital Platform’s “self-service, single platform approach,” marketers, advertisers, and business owners are empowered “to send the right message to their audiences at the right place, at the right time, and with the right context, through a wide variety of advertising formats and methods—ensuring audiences do not get bored with seeing the same ad all the time.”

2. Localization is a key strategy

According to Sogo, there is “so much potential” in the ad tech industry, particularly in Asia where there are different levels of tech adoption across different countries.

Hence, instead of centralizing its Southeast operations in Singapore as most international companies tend to do, AdAsia is looking to funnel its current round of funding into expanding its footprint in the region. Currently with seven offices across six countries, including Bangkok, Ho Chi Minh, Hanoi, Jakarta, Taipei, and Phnom Penh, AdAsia is launching in Shanghai and Tokyo, along with Hong Kong, Malaysia, and the Philippines by end of this year. “Our strong focus on localization—having teams in each market that understand the digital landscape in their country—enables us to provide solutions and strategies that propel us over our competition,” Sogo says.

3. Transparency across the business is gold

With fraud riddling the ad tech space in the last several years, it’s no wonder brands and marketers have grown wary of adtech. It’s precisely why Ad Asia makes it a point to ensure that “transparency, both within the company and with clients, is a key part.”

It’s AdAsia Digital Platform, for one, encourages transparency with its self-service single platform. “The dashboard and reporting functions give marketers full access to easily extract any data or insights that they may need. Essentially, we provide our clients with convenience and transparency so they can achieve their marketing objectives easily and with ease of mind,” explains Sogo.

Likewise, transparency is strictly observed within the company. “We’ve decided to be as transparent as possible to all our staff. Revenue and profit figures are shared each month to update all staff on the progress of our business,” says Sogo.

4. They’re all about non-stop innovation

It’s difficult to compete with an adtech company like AdAsia which does programmatic alongside influencer marketing and aided by in-house creative teams. But according to Sogo, they’re not even looking to compete with anyone. “Ours is an open platform that allows for partnerships and integrations with the right ad tech vendors. Ultimately, we want to ensure our clients have the best solutions available to them,” says Sogo.

Not one to rest on their laurels, however, Sogo keeps himself abreast on the latest industry trends, particularly mobile and video. Citing a recent study of online video advertising, Sogo reports “video is growing increasingly popular, particularly on mobile. Videos on Facebook are also huge, with over 4 billion views a day, of which 75% came on mobile.”

With average video ad spend nearly doubling in just over three years, all signs point to mobile becoming massive in the next few years. Says Sogo, “We feel that this is something else that we can leverage strongly on, given that we have an end-to-end video advertising solution as well as video formats that are more native in nature, allowing for a comfortable viewing experience for the consumer.”