Singapore firms leveraging adtech will command higher valuations in 2020

BUSINESSES big and small are always looking for ways to deliver value to shareholders. Many are sitting on data - specifically audience data - that is not being valued or monetised properly, thus arguably not delivering shareholder value with resources at hand.

But what is audience data? Audiences are the groups of people - online and offline - that advertisers want to target for specific product and service marketing.

SITTING ON A GOLDMINE

Audience data provides insights into purchase intent - someone searching for and ordering Italian food online may be interested in seeing ads for pasta and pizza, for example. App owners and publishers are key sources of audience data.

Traditionally, between the advertiser and publisher sit advertising platforms and exchanges, connecting buyers and sellers and taking commissions on the transactions. This commission revenue is great for the ad exchanges, but is essentially "money down the drain" for buyers and sellers of audience data.

Now, new adtech innovations are allowing publishers and app owners to sell their audience data directly to advertisers - setting their own prices and taking back control of their data.

Our observations suggest the increase in ad revenue for publishers and apps can be as much as 500 per cent the price they were previously getting through third-party ad exchanges.

Monetisation of audience data, sold directly to advertisers, will in turn help companies command higher valuations because they are adding substantial new revenue streams that will hit top and bottom lines - and be welcomed by investors and shareholders.

ADTECH SUPPORT FOR VALUATIONS

This is great for both growth-stage startups which are always in need of additional revenue streams, as well as larger established companies.

There are four key ways adtech delivers this new framework to apps and publishers, supporting overall valuations:

Firstly, by setting up auctions on in-app inventory, including rewards, internal ads, and direct ads, companies enable advertisers to take out self-serve ads on their app or publishing platform, much like they would already be doing on Facebook or Twitter.

Second, by creating a white-labelled ad platform, companies don't need to rely on third-party ad exchanges.

Third, adtech enables companies to offer merchant promotions for opportunities outside their own ecosystem.

If an app or publisher is unable to satisfy a given advertising spend within its own network, it can rely on the adtech to automatically serve those ads on an audience-extension basis - via partner apps and platforms that reach relevant eyeballs.

A GROWING REGIONAL ADVERTISING PIE

As we settle into 2020, we expect companies leveraging adtech to be able to increase the value of their audience data five-fold, bypassing the need for third-party exchanges that are likely underpricing their audiences while taking cuts on transactions.

With South-east Asia's digital advertising market expected to be worth US$15.35 billion by 2026, increased valuations for companies willing to take back control of their audience data and grab a slice of that growing advertising pie will be justified in the year ahead.