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Shuba KrishnanDirector, Business DevelopmentInnity
Ad technology firm Innity operates offices across nine countries in Southeast Asia and Greater China. Shuba Krishnan, Innity’s director of business development, spoke with eMarketer’s David Green about the region’s surging demand for content marketing, efforts to improve transparency and how performance failures have damaged confidence in open exchanges.
eMarketer: What trends do you see emerging in the evolution of the digital advertising ecosystem in Southeast Asia?
Shuba Krishnan: I see two big things happening. One is a surge in content marketing. A lot more advertisers are looking to do sponsored articles and videos produced by influencers, or they’re publishers with in-house teams making videos. A lot of the brands doing this are local, smaller brands operating in the FMCG [fast-moving consumer goods] or telco space.
The other buy-side trend, specific to display advertising, is the push towards transparency. The events with YouTube and with Facebook—and recently in Singapore there have been a few cases where articles have appeared on sites supporting ISIS—have shined a light on the need for transparency. We’re hearing more conversations about fraud, brand safety and viewability, of course. GroupM has an internal mandate that everything needs to be 100% viewable.
eMarketer: So is GroupM taking the lead in demanding certain standards on viewability?
Krishnan: GroupM are not the only ones, but given their size, they can obviously have more impact. But among all agencies and some of the bigger brands—such as Proctor & Gamble, whose global marketing head recently spoke about it—there is a focus on brand safety in Southeast Asia now.
eMarketer: What’s the biggest challenge advertisers are facing in terms of achieving return on investment?
Krishnan: Digital users are coming up with unexpected changes that the buy side is not prepared for, such as ad blocking, particularly in Thailand and Indonesia. Publishers on the sell side were not really optimizing their sites properly—sites weren’t loading fast enough. Another big challenge is that there’s too much data, and insufficient talent in analyzing it and making the right investment decisions. There is a tendency to buy the “flavor of the season.” So if influencers are big, the advertisers buy in, but nobody is able to prove a benefit using data.
eMarketer: Which markets have most rapidly embraced programmatic?
Krishnan: There isn’t much reliable data in terms of programmatic ad spend in Southeast Asia. But specifically related to mobile programmatic, I would think Indonesia, followed by Thailand are the more advanced markets. These markets have a comparatively bigger size; mobile usage is a lot higher and there is enough inventory from local publishers of a large enough size for them to develop their own ecosystem.
In contrast, Singapore, which is high in terms of ad budgets, is handicapped in terms of scale. It’s a smaller market with a couple of key publishers, and a lot of the tech used there is coming in from the US or Europe, or even Australia in some cases.
eMarketer: In which markets is it still most necessary to negotiate premium ad slots directly? Where is it most challenging to form those relationships?
Krishnan: In Singapore there are a few key publishers, and you have to have a relationship with them. But the market that’s been challenging for us is Vietnam. It is similar to China because they play by their own rules, and there are a lot of strong local players and competition for ad inventory is strong.
eMarketer: Which ad formats have sold best most recently?
Krishnan: Mobile web has surged, specifically ad units that support video. It’s not so much a displacement of mobile apps, but a reflection of desktop advertising migrating because traffic is headed toward the mobile web. Mobile apps are still a very strong ecosystem, but the challenge is translating that for local ecosystems.
The strongest advertisers are mostly global, and they get inventory mostly from gaming and other nonlocal publishers. That’s why we are focused on the mobile web, because we prefer to work with local publishers rather than global players.
eMarketer: Are all the services you offer available in all the markets in which you operate?
Krishnan: When it comes to DMPs [data management platforms], there are certain markets that are more open to having those conversations. In Thailand, our DMP has been used by a lot of publishers. A publisher consortium has been set up called OPPA, the Online Premium Publishers Association. It’s all the large publishers pooling inventory and data, then making it available as a private marketplace [PMP]. We are the DMP provider. And in Indonesia, a lot of publishers are open to using DMPs.
eMarketer: You mentioned private marketplaces. How prevalent is that trend in Southeast Asia?
Krishnan: Markets like Thailand and Indonesia with more local publishers and a greater potential volume of impressions automatically lend themselves to PMPs just because you need a certain scale.
In Malaysia, things are more fragmented with the use of Malay, Chinese and English, and strong publishers in each language. It doesn’t have the scale to dictate driving that much ad spending. Generally, there are a lot more PMPs being tested out, but it’s in very early stages.
A lot of the buy side has pretty much given up on open exchanges. More buyers and sellers think open exchange is not the way, and we need to find the right balance between an insertion order and open real-time bidding. We have to find a middle road between these two extremes, and I think that’s where PMPs work well—it’s the right mix of humans and machines.
eMarketer: What’s the status of ad verification and third-party tracking?
Krishnan: If you’re not talking about ad verification then you’ll probably lose your job, on the buy side at least. Irrespective of the seller or the environment—programmatic, ad network or traditional insertion order—some amount of verification, be it in terms of brand safety, fraud or viewability, is going to happen. That’s an eventuality that nobody is going to be able to get away from.
Third-party tracking is the instant reaction, but there are challenges. For instance, with brand safety, some players are not [knowledgeable] in non-English languages. So they’re unable to do alerting or blocking for content in Chinese or Thai. Those hurdles still remain. And in the mobile web, some third-party trackers have very limited capability to keep up with feedback across the ad serving environment. There are things they’re unable to track. So there are a lot of execution pain points that need to be overcome.
IAS [Integral Ad Science] just released their report on brand safety and viewability in Southeast Asia. One of the things that they noted is all Southeast Asia markets are around the 50% to 51% benchmark in terms of viewability. According to them, that’s pretty good because in the UK and US, viewability only increased after tracking was put in place. Southeast Asia is starting off from a global benchmark as their base level, and it can only get better from there.
As programmatic advertising matures, buyers and sellers no longer see it merely as a means of automating processes, but rather as an advanced method of controlling ad campaigns—and better targeting the audiences that come with them.
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