Two Chinese advertising technology and marketing companies have been snapped up within days of each other as buyers race to carve a bigger share of the mainland’s US$1.2 billion online ad market and growing demand for performance-based web advertising models.
Shanghai-based Focus Media is buying AllYes for up to $300million in cash and stocks, while regional online adsales network Pixel Media has agreed to pay up to $10million for Easy Growth. The latter owns an online affiliate marketing and web advertising technology provider, Share Freedom Wireless.
With its diverse service offer, AllYes will allow Nasdaq-listed Focus to broaden its business beyond its network of digital billboards. But the move has created some unease among online agencies as AllYes is an online advertising agency, web advertising technology provider and a media network, through its SmartTrade affiliate marketing operation, all rolled into one. Once labeled as “China’s DoubleClick”, the seven-year-old firm today looks more like a Quantive in the way its operations model is structured.
AllYes had largely focused on its media brokering business, offering its ad-serving and backend analytics tool as a hook to land new media accounts, say sources. However, this strategy could change in the hands of capable management. AllYes, which had earlier cancelled plans for Nasdaq-listing, could emerge as a formidable challenger to the agencies it services if Focus sharpens its agency offer. Focus declined comment, but the announcement release noted that AllYes services a sizeable part of the online market. “AdForward (its software suite), which covers all aspects of online ad publishing, creative production, tracking, targeting and performance analysis, is used by more than 80 per cent of independent websites and ad agencies in China”, the release stated.
“I see this as an aggressive move,” said one agency source.
Meanwhile, UK-listed Pixel sees Easy Growth, its first acquisition following its IPO last summer, as a key growth driver for its business in China and the rest of Asia. Chief executive Kevin Huang said Easy Growth’s affiliate marketing model a network of more than 1,300 websites with “a collective reach to rival Tom Online” would allow Pixel to broaden its service offer beyond display advertising and search to include performance-based click per action offer. “The acquision allows us to enter a market of China’s scale in a more serious way,” said Huang.
Pixel is also keen to export the technology platform on which Easy Growth operates the affiliate model to the rest of Asia
(Source: Digital Media)