Riding the pull of digital advertising

EVER notice that the pair of shoes you were eyeing online seems to magically pop up as an ad on your screen the next day? Well it isn't exactly magic - it's targeted advertising. And this happens to be one of the things that digital advertising firm Adknowledge Asia specialises in.

Essentially, Adknowledge Asia connects agencies with advertisers, providing them with digital ad space via their proprietary tech platform named AdParlor. A specialist in social and video advertising, the company has access to inventory on Facebook, YouTube and Instagram among other social media platforms.

According to Matt Sutton, 36, CEO of Adknowledge Asia, having a programmatic tech platform such as AdParlor also means that the company buys digital inventory in an automated way.

Traditional vs digital

Once vanguards of the advertising industry, traditional modes of advertising, including print and television, seem to be taking a backseat as digital advertising continues its meteoric rise.

Research by Interpublic Group's Magna Global shows that growth in advertising revenues last year were largely attributed to digital media sales surging by an incredible 17.2 per cent to US$160 billion, even as traditional media sales dropped 2.2 per cent to US$393 billion. Moreover, within the Asia-Pacific (Apac) region, digital media is expected to eclipse television ad sales as early as 2018.

"At any given time in Asia, there are more people on Facebook than there are watching television," says Mr Sutton.

He highlights that traditional media are very much "push media" - a television ad for instance, airs at a specific time and simply pushes media content out to consumers.

Conversely, digital is a "pull media" that generates media consumption only when users request for it. This allows tech platforms to build a profile of users and engage them individually.

Mr Sutton adds that once online, SMEs can get very granular about the users they want to target. This enables them to get their products in front of the right audience at the right time, which is what native advertising is all about.

Moreover, digital advertising is much more cost-effective than traditional advertising, where entrance levels are higher because of the limited packages offered by broad-reach mass media campaigns.

"We're seeing results in digital that drives higher ROI (return on investment), so we're seeing engagements that are less expensive than offline media with results that have more value," says Mr Sutton.

Another great thing about digital advertising is that it allows companies to better gauge the effectiveness of their ad campaigns. Mr Sutton explains that using a programmatic platform is important as dashboards on the tech platform will help consolidate vital information from different users and creatives.

"Just looking at those results in isolation won't give you the full picture, you need to be seeing those publishers in one dashboard and be understanding the different metrics that they represent," says Mr Sutton.

Despite the advantages that digital advertising bring, marketers in Asia are under-investing in online ad spend. This is in part because they lack the expertise to build digital infrastructure in small fragmented markets culturally different from each other.

Additionally, Mr Sutton attributes the delay in the take-up of digital advertising to a risk-averse attitude within the region. Having been in Asia for 15 years, he speaks of a "me-too culture", where people tend to follow the lead of others to ensure that nothing goes horribly wrong. "In my opinion, that translates itself into the business world," he says.

Going digital

For SMEs that are just starting out, the best way to maximise your ad dollars is to do the free stuff first, and then go digital, notes Mr Sutton. For instance, businesses should fully utilise social media tools to generate content.

In particular, Mr Sutton advises that businesses set up their digital presence, even if that means using a rudimentary CRM (customer relationship management) tool like an email database to target Facebook users.

"If I were starting my own SME today, the first thing I'll do is to get my digital marketing strategy in place. That'll save a lot of time, effort, and wasted resources trying to go digital second," he says.

Interestingly, Mr Sutton points out that SMEs actually have an advantage over large conglomerates such as Unilever and P&G, which have been the biggest procurers of television advertising over the last two decades. He explains that in trying to navigate towards digital advertising, large corporations will have to do the heavy lifting of undoing trade deals and establishing new creative partnerships.

That being said, in a digital age where consumers are bombarded by online content, corporations need to learn how to protect their brands.

Mr Sutton notes that the biggest part of the brand safety debate they get involved in is with YouTube, as new content is being uploaded by publishers every single second. However, because of its niche content, YouTube represents a massive opportunity to "target users in the right frame of mind".

"If someone searches for a specific content and we put an ad in exactly the right space then we get amazing results. But if we put the ad against content that's not so great, then we're going to get potentially brand harmful results," says Mr Sutton.

To overcome this, the company uses its tech platform to create blacklists for certain sites and filter out irrelevant URLs.

One of the biggest mistakes that corporations make include focusing on cost and not value when it comes to advertising. In other words, they purchase digital inventory at low costs, without carefully considering how that pans out.

As Mr Sutton puts it, "that's ok with mass media where you don't know what happens after that ad is delivered. You can't track it, so it makes sense to try and get it cheap. But in digital, we know exactly what happens to every user and how far down the customer funnel they go - did they ultimately purchase the product? Or how many customers were engaged"?

Business goals first

Additionally, some companies may fail to establish their business goals first before they set out to attain their marketing goals.

"Too often SMEs and their advertisers start with a marketing goal. So they'll start by saying 'Ok I want 10,000 people on my website for 2,000 dollars', but they haven't really thought about what they'll do when they get there."

Another blunder that companies may make is not generating quality content and following through by repurposing it.

"In the new digital world, content is king and distribution is queen," says Mr Sutton. "Digital is now the centre of absolutely everything that we do, so if you want people to know who you are, you need to have good content and always-on content."

Trends and growth plans

According to Mr Sutton, an industry trend we're seeing now is that social and video advertising - which also translates into a company's mobile advertising strategy - will form the main pillars of digital advertising.

Besides, advertisers are increasingly getting more sophisticated about how they utilise data. "The more layers of data we have, the more we can analyse. So for me, data is definitely the future," he says.

"Right now we're in that phase where we're starting to trial and test with data, but I think it's imperfect. It's better than television, but we'll only get better by using and experimenting with it more."

In 2014, Adknowledge Asia made its first foray into Asia, and quickly expanded to 20 employees in Singapore. Since then, the company has grown to 140 staff in nine Apac markets including Malaysia, Indonesia and Thailand.

Showing no signs of slowing down, Mr Sutton highlights that Adknowledge Asia has an open headcount of 80 people, as their goal is to enter three to four new markets within the next 12 to 18 months.

"For us, media spend is revenue," asserts Mr Sutton. Looking ahead, the company's vision is to represent about 10 per cent of the Facebook and YouTube media spend across Asia by 2018, which would amount to US$300 million.

When asked about which market Adknowledge Asia is most excited about, Mr Sutton highlights that the company is interested in gaining a foothold in several markets as each brings with it varying economics and growth trajectories.

However, he hints that one market everyone is excited about is Indonesia. "It's already big in absolute numbers. The economy is growing real quick, the e-commerce market is exciting and social penetration is really high, so it's a combination of factors," he adds.

He suggests that for every market the company sets up in, they go in with the same intention of hitting that 10 per cent media spend target. To achieve this, the company plugs into their technology solutions and surrounds that with the people expertise needed to service the advertisers.

"So the tech doesn't work without the people, and the people don't work without the technology," concludes Mr Sutton.