Chapter 31 Acquisition of Kaiwei Dianbao: Focus Media clicks on the mobile phone advertising market

"Mobile phone advertising is a new growth point. After 3G is launched, this growth will be more obvious." Under this idea, in March 2006, Jiangnanchun and Focus Media made another move and acquired Kaiwei Dianbao for US$30 million. . Before and after this new profit point, Focus added another important screen for itself.For this acquisition, some people described it as Jiang Nanchun wielding the magic wand of capital to turn mobile phones into advertising platforms. The emergence of mobile phone video advertising has long attracted advertisers and can't wait.The shrewd Jiang Nanchun saw this coveted market and sighed in public more than once: "In 2006, we will definitely enter the mobile phone advertising market, and the way is not necessarily based on 3G."

So, focus on the shot. In March 2006, Focus Media acquired Beijing Kaiwei Advertisement Technology Co., Ltd. for US$30 million to enter the wireless advertising agency market, and developed two relatively accurate and relevant mobile phone advertising models: Advertisement and Direct Advertisement. Since then Officially entered the new field of mobile advertising. Kaiwei Diangao, formerly known as Beijing Kaiwei Diangao Network Technology Co., Ltd., is a large mobile phone targeted advertising service provider in China.Headquartered in Beijing, it operates the largest WAP Push advertising delivery platform (Mbox) in China through the two networks of China Mobile and China Unicom.

According to the agreement reached by the two parties, Focus Media acquired 100% of the assets of Kaiwei Dianju with US$15 million in cash and US$15 million in common stock (based on the standard of US$50 per ADR, each ADR is equivalent to 10 Focus Media common shares) , the specific payment amount depends on Kaiwei Dianbao's market performance in 2006 and 2007.Adding the above two payment methods, the total payment of Focus Media reached nearly 30 million US dollars.In addition, all common shares of Focus Media involved in the acquisition will be converted into new shares. The acquisition was completed in the second quarter of 2006 following regulatory approval.Subsequently, Focus Media began to plan to jointly develop a mobile advertising service system with Keyway Advertisement, making full use of the latter's existing operating advantages in the mobile advertising market to open up new markets. On June 20, it changed its name to Beijing Focus Wireless Media Technology Co., Ltd. ("Focus Wireless") and started formal operation.

The reason for the acquisition of Kaiwei Dianbao is that Focus Media intends to develop a mobile advertising service system and make full use of the latter's existing operating advantages in the mobile advertising market.After amassing a large number of clicks, Focus Wireless launched point advertisements mainly based on picture banners and text links, direct advertisements based on sending SMS, MMS, and WAP Push in the form of permission, and multi-level advertisements as promotional media. . "Wireless Internet advertising based on mobile phones will be another key market for Focus Media this year besides outdoor large-screen advertising." Ji Hairong, vice president of Focus Media, explained the background of this wholly-owned acquisition costing US$30 million.

Statistics show that Focus Wireless currently has a database of nearly 70 million WAP users, accounting for about 90% of the total number of WAP users in China, covering young white-collar workers and fashion groups in cities, thus becoming one of the new media networks with great development potential under Focus Wireless . The failure of the acquisition of Kaiwei Dian blew the call for Focus to enter the wireless advertising market. After the $30 million acquisition of Kaiwei Dianbao, Focus Wireless began its formal operation.Xu Maodong, CEO of Focus Wireless, told China Business News that mobile phones, as the fifth media after newspapers, radio, television, and Internet media, have grown in influence and audience.The positioning of mobile media is focus, orientation and interaction, and its advertising value is very high? ?

As a wholly-owned subsidiary of Focus Media, Focus Wireless has integrated Kaiwei's advertising business and officially launched it into the market as a new business of Focus Media.Ji Hairong, vice president of Focus Media, said that when the building advertising market was more mature, Focus Media's wireless and outdoor LED were two new businesses that Focus Media would focus on cultivating in 2006. The products launched by Focus Wireless include point report and direct report.Advertisement, that is, through the wireless Internet site WAP, etc., the customer's advertisements are accurately placed on the mobile phones of the target consumers.According to Xu Maodong, currently Focus Wireless has cooperated with 3G Portal, Dangle.com, WAP Tianxia, ​​etc., and pays to these websites according to the agreement quotation per thousand effective clicks.

Another product form of Focus Wireless is direct notification, which sends SMS, MMS, WAP Push and other methods to users' mobile phones through permission, which can achieve nearly 100% accurate arrival.Through direct reporting, Focus Wireless can directly deliver promotional information advertisements and coupon advertisements to mobile phones that allow or customize the information, making it easier for them to view and use. On June 21, 2006, Huang Jiali, vice president of iResearch Consulting, told the "First Financial Daily" reporter that the growth of Chinese WAP users mainly came from the development of the free WAP market. Now China has tens of thousands of free WAP websites. has been hit more than 150 million times.Its research also shows that 2006 to 2008 is the introduction period of the mobile advertising market, and a new advertising business model that is different from previous SP malicious marketing will gradually be established. , the mobile phone advertising market will gradually mature, and mobile phones will also become the mainstream advertising channel.According to industry insiders' conservative forecast, the wireless advertising market size is expected to reach 710 million yuan in 2007, 1.1 billion yuan in 2008, and 1.8 billion yuan in 2010.

According to industry analysis, the acquisition of Kaiwei Dianbao seems to have created another new profit growth point for Focus.With the increasing popularity of mobile phones and the continuous development of various value-added services for mobile phones, China's mobile phone advertising market is equivalent to the next "gold mine" that needs to be tapped urgently, and has the advantage of one-to-one transmission. "We have formulated a strategy to enter China's mobile phone advertising market, and plan to establish high-end advertising channels for individual customers. After the opening of China's 3G network, it is expected that our customers' mobile phone advertising spending will increase significantly." Jiang Nanchun commented, he It is believed that once 3G is officially launched in China, users' mobile phone advertising expenditures will also increase significantly.

"The acquisition of Kaiwei Dianbao is only the first step for us to enter the mobile advertising business, and there will definitely be other models in the future." Facing the reporter of Shanghai "Oriental Morning Post", Ji Hairong, the spokesperson of Focus Media, is also full of confidence in Focus Wireless . It is worth noting that with the continuous expansion of the network, the value of Focus is also constantly rising.According to the 2005 annual financial report released by Focus, the company's total pre-tax revenue in 2005 was 73.4 million US dollars, a year-on-year increase of 152%, and its 2005 net profit was 23.5 million US dollars.Based on the closing price of about US$54.5 per share, the market value of Focus has reached US$2.6 billion, which is close to that of NetEase, the largest Chinese stock market in Nasdaq at that time.

Mobile media with mobile phones as the core will widely affect people's lives through value-added services such as SMS, maps, TV, and games. Mobile advertising has become a major advertising market for Focus.The idea of ​​mobile phone advertising revealed by Jiang Nanchun is not much different from that of building advertising.The mobile phone is the building and the store, first enclose the land in it, and then push the advertisement, but Jiang Nanchun wants to pursue "sending the right content to the right person at the right time and at the right place". "This is essentially the idea of ​​mandatory advertising." Deng Yuqiang, general manager of 3G Portal, said that this idea is understandable, but a better path for mobile advertising should be to let users take the initiative.As for the future ideas of mobile advertising, Deng Yuqiang believes that more emphasis should be placed on users, "Now it is just a simple display and interaction. In the future, 3G portals will continue to explore more forms of mobile advertising, and exclude compulsive advertising such as group posting and pop-ups." form of advertising".In fact, Focus has been committed to exploring a business model based on audience permission from the very beginning in this field.

The unique selling point of mobile advertising has the characteristics of "focus".The first is the mobile nature of the mobile phone, which enables it to derive service items that are not available in "fixed" media such as TV, magazines and the Internet, and then carry out more detailed service item seamless dissemination, which has advantages that other forms of advertising do not have .With the portability of mobile phones, the instant, customer-centric and targeted mobile marketing services provided by mobile advertising have once again captured the terminal.For example, as long as mobile phone users provide their location, they can check the surrounding dining information through mobile phones, and even the reservations and discounts of specific restaurants. "The interactivity of mobile phones can also make mobile advertising personalized." Compared with traditional advertising indoctrination, mobile advertising has greater flexibility and can provide personalized advertising services according to different mobile phone users, such as After getting the reply of the mobile phone user's hotel inquiry information, the advertising agency will send the information of economical hotels or hotels above Samsung to different mobile phone users. After the mobile phone user's feedback information enters the advertising agency's database, the user will arrive at the next destination Only applicable hotel advertisements will be received. In addition, mobile advertising will also save advertisers from the confusion of "wasting half of the advertising cost, but don't know where to waste it".Different from traditional media's periodical advertising charges, mobile advertising on WAP sites tends to be charged according to the advertising effect, and has experienced CPM (Costper Thousand Impressions) charged by the number of impressions, and CPC (Costper Click) charged by the number of clicks. The evolution of CPA (Costper Action) billing based on advertising feedback.Industry insiders analyzed that due to the limitations of monitoring methods, data preparation and other factors, the CPA that is billed based on the actual effect of advertisements such as registration, downloading and making calls is still in the conceptual stage, but with the advancement of 3G and other technologies, this relatively scientific Fees will become a reality. Finally, in addition to personalized services on content, with the expansion of mobile phone screens, the improvement of color reproduction and sound effects, the multimedia performance of mobile advertising may also increase the appeal to consumers.According to iResearch, the click-through rate of mobile advertising greatly exceeds that of Internet advertising. The click-through rate of Internet advertising is less than 0.3%, while the click-through rate of mobile advertising is close to 2.5%. Mobile advertising has a better communication effect than Internet advertising. On June 29, 2007, MSN version 3.0 of Microsoft mobile phone was officially released in Beijing. Focus Wireless, Kongkong.com, and Pika appeared at the press conference as strategic partners in the three fields of mobile MSN marketing, content provision, and application development. .As the leading wireless advertising provider in China, it once again joined hands with MSN to allow mobile MSN to meet users' "anytime", "anywhere" and "smooth" communication needs while providing them with richer and more practical life consumption information, and also to promote Its commercialization process as a medium. The focus on wireless marketing has brought remarkable results to Focus Wireless. At present, Focus Wireless has successfully provided tens of thousands of well-known international and domestic companies in dozens of industries such as automobiles, mobile phones, fast-moving consumer goods, education, finance, and real estate. Wireless Advertising Services.According to its 2006 survey on Chinese Internet advertisers, 36.8% of Internet advertisers are willing to place WAP advertisements. Leading consumer goods companies such as Changan Automobile, Dell, and Apple have all begun to try mobile phone advertisements. According to the financial report of Focus in the third quarter of 2007, the year-on-year growth rate of Focus's wireless mobile phone advertising business continued to exceed 250%. "Now is just the beginning. We are still exploring more marketing methods, and we will definitely go further in the wireless field. This field is very in line with our 'Focus' communication concept." When interviewed by Sohu IT reporter, Jiang Nanchun expressed his position like this .