Arun Kumar, Head of Digital Services APAC Mediabrands, on rolling out the Cadreon into the Australian and APAC markets and how Mediabrands core strategy focuses on data, search, social & audience display. He further discusses the need for different audience buying strategies in China, Japan and South East Asia and says while Japan and China are at the forefront of developing local DSP solutions – there is still a lack of price transparency in the marketplace.

Can you give an overview of Mediabrands Worldwide offering in Australia and across the APAC region? 

Mediabrands has a strong product offering across Australia & the rest of Asia. In APAC, we have both UM & Initiative, our media brands along with Reprise, our Search & Social specialist agency, Orion, which helps clients barter their assets for media credits, and Ensemble, our branded entertainment unit.

What is your role and remit across APAC? Which markets are you particularly focussing on?

My role is to build specialist digital capabilities for the group across APAC across all functions. I am also responsible for the services that we provide for our largest regional and global clients.

I am most focused on China, Japan and India, which are large both in terms of size and potential growth opportunities for Mediabrands.

How does Mediabrands Worldwide differentiate itself from its competitors?

Mediabrands has focused on two key areas that impact quality of our services. Firstly, we have a process that allows us to integrate our internal capabilities with our delivery brands. And in order to make this happen, we have hired and will continue to hire diverse talent. The combination of the right process and the right people is what makes us special.

 Can you provide an insight into media buying and how it works with ad networks and publishers across APAC?  What does a typical media plan look like for your brand advertisers?

Ad networks over the last couple of years have definitely made deep inroads into any campaign budget. They have improved the quality of their inventory and set the base for audience focused buying to take remote in APAC. They have struggled however to demonstrate relevance vis-à-vis the large portals and get a larger share of the pie.

What challenges do advertisers and agencies face when it comes to buying online media in APAC? Are online media budgets reflective of online populations in the region?

Online media budgets are never in line with either opportunity or population in most markets. There are three types of clients: those who get it and are not scared of making the investment, those who don’t get it and therefore do not invest or get any benefits and the third set of clients are in the middle. They constantly seek justification for investing in online media but are never convinced. Lack of scale prevents them from ever enjoying benefits of economy.

In the last year or so, we are seeing more clients moving from the third category in to the second. This is good for our ecosystem and will ultimately end up benefiting brands.

For agencies, this will mean that proselytizing is out and conducting services is in. If the ecosystem does not invest ahead of the curve to benefit from the marketing budgets that will start to come, those spends will head in different directions.

Do media strategies vary across different markets?

Yes, they do. Buying strategies are dependent on the balance between the large portals and the long tail, the penetration of networks and exchanges and the extent of localization. In markets like China or Japan, relationships have a central place in delivering buying value. Markets in South East Asia have a good balance between global players and local content providers. India mirrors the US in many respects but does not enough volumes.

How active are ad exchanges and Demand Side Platforms in APAC?  As a big display buyer do you think data-driven display buying will increase buying efficiency and scalability?

Japan and China have been at the forefront of developing local DSP like solutions for their markets. While global DSPs are beginning to establish presence in some markets, it will take another six months to a year for penetration to increase.

There is no question that if data driven display buying is operationalized the right way, it will bring in large improvements in efficiency. Critical mass and transparency for the market is the key. Unfortunately looking at some of the plans of trading desks that have launched, it seems like media arbitrage is a fundamental component of their business models. Conflict of interest could ensure that members of the ecosystem like ad networks perceive a threat from agencies and refuse to play ball. Australia has already seen what can happen if publishers do not see value in the trading and exchange environment. With Fairfax not agreeing to put its inventory through any DSP or Exchange, it makes it tougher to get other publishers to play ball.

 In terms the automated buying across exchanges and SSPs how far is the APAC market behind Europe and the US?

On both fronts, APAC is where the US market was in 2009. While Europe has seen more development than APAC, it is because it is an easier and larger set of markets for global players to extend their presence to. However one must remember that European laws are also likely to seriously affect the business and the way it develops in the future. From that perspective, APAC might see a smoother ride though there would have to be greater adaptation to local buying methods and working processes.

How much inventory and price transparency is there in the marketplace?

There isn't enough inventory in certain categories, especially those that reach high end audiences. There are no high premium luxury networks that focus on developing daisy chains of individuals who have high incomes and a high profile lifestyle. Most plans still have inventory partners which are a bit one size fits all. There is a bit more focus on price rationalization which was not there in the past. However I wouldn’t really categories these are perfect markets. In countries like China and Japan for example, price transparency doesn’t exist. 

Does Mediabrands Worldwide have an exchange strategy? Are you attached to a DSP? Do you have plans to set up a trading desk?

We do have plans of bringing Cadreon, our global audience management & buying solution to APAC. This depends on the evolution of each market and where we see the greatest benefit coming through for our clients.

Will media agencies in APAC need to evolve and become more entrepreneurial and data focussed?

They definitely need to have a data strategy. An agency that cannot understand or integrate disparate streams of data does not have a future. The challenge for agencies is in eliminating the divide between primary research, online data and 3^rd party panel or syndicated data. In most cases, it will be analytical skill in reading patterns across these data points that will help uncover audience insights.

As a buyer, are you doing a lot of behavioural targeting or re-targeting?

Yes, we have been investing in behavioral or contextual targeting for some time. Search re-targeting efforts have been introduced some time ago.

Are your clients actually aware of ad exchanges? Do they see the benefit of real-time audience buying?

The concept of exchanges is obviously quite new to Asian markets. And given that except for Right Media in some cases, other exchanges have not really established any presence, most clients are unaware of their benefits. I have yet to meet a client who has not understood the benefits of real time audience buying when the concept has been introduced to him/her.

Is Mediabrands Worldwide doing much in the data space – in terms of are you leveraging first party or third party data to deliver more value for advertisers? Do you see the data market growing this year?

We have been leveraging first and third party data for the last couple of years in various markets.  We are also looking to build our own technology solutions that will help organize and analyze data streams. Our partnership with Nielsen in the US where we instituted a joint panel is our future way forward in other markets as well and one that we will be looking to replicate in different forms in Asia.

However it is important to note that in APAC where there are no 3^rd party data marts, these efforts have been specific to a few clients. With the arrival of DSPs, publishers are beginning tor realise the value data brings to their business. Therefore I expect 3^rd party data sources to develop fairly quickly over the next 6 months to a year.

Will the growth of video, mobile and casual social gaming impact media buying strategies or publisher’s inventory availability on ad exchanges in APAC?

Social media development definitely impacts exchanges. As investment in SNS goes up, clients are comfortable with the social ecosystem and are willing to experiment with social rewards programs. We will begin to see video inventory come through exchanges. In fact in China, the video sites are very progressive and more willing to collaborate as opposed to the more generic portals.

Mobile ad networks have gained traction but I don’t think they will immediately impact on exchanges & DSPs.

What trends can we expect to see in the display market in APAC over the next year?

The display market will grow only if the exchange & DSP ecosystem develops as per promise. As display gets more accountable and more audience driven as opposed to space or tenancy driven, display will be able to successfully increase its budgets by eating in to Search budgets. Clients are unlikely to divert budgets from their social marketing campaigns. It is Search that will be most impacted by the growth of a performance environment in display.

The other gain for display will arise as clients realize the power of an audience driven display buying and search combination.

What’s in store over the next year for Mediabrands Worldwide in the APAC region?

We will be making investments in our vertical streams like Search, Social & Audience driven display. Our primary focus however will be in organizing and using data. That’s the area which will ultimately drive client business.

Follow ExchangeWire APAC on @ew_apac

Join us on Linkedin: ExchangeWire: Ad Trading, APAC