Chapter 35 Chapter 7 Vertical and Horizontal Focus: Multi-brand Integration of Focus

"If it is necessary to wait for accumulation to make some individual capital grow to the extent that it can build a railway, then I am afraid that there is no railway in the world until today, but this matter was completed in a blink of an eye through a joint-stock company." As early as more than 100 years ago , so stated by Marx.In the new media era, it is a zero-sum speed game. In every field, the market only recognizes NO.1.The price required by time directly warns and causes people to give up waiting.And Focus Media, the best way to develop new media business is exactly this.The same is to make full use of the resources of the capital market and use capital operation methods to pump blood for itself, accelerate expansion, and expand to a large scale.

"A good wind sends me to Qingyun by force." We have reason to believe that even if the future leaders of China's new media empire do not belong to Focus Media, they must belong to those who are good at leveraging the power of capital.Focus Media has formed a good start for the new media industry through its marriage with capital and a series of mergers and acquisitions.Leveraging the power of capital to make horizontal mergers and acquisitions, Jiang Nanchun made the cake bigger and bigger. On October 17, 2005, more than USD 100 million was acquired from Framework Media, enabling Focus Media to add high-end apartment media resources on the basis of the original network; on January 8, 2006, USD 325 million was merged with Juzhong, and the two outdoor media have joined forces. It basically covers building TV, community TV, outdoor big screen and other fields; in March 2006, it acquired Kaiwei Diancao for USD 30 million, and launched Focus Wireless, which mainly focuses on mobile advertising; In the field of Internet advertising; in December 2007, Xicheng was acquired, integrating nearly 100% of the terminal market of the store...

This is the solid footprint of Focus Media in developing the new media market. In just two years, Focus Media has not stopped and completed the layout of new media at a speed that surprised the industry, and gradually perfected Focus Media's original "life circle media group". The concept of advertising makes the contact points of advertisements spread all over the life tracks of mainstream consumers in various cities, so as to have a direct effect of advertising communication on them. "Once a person enters a public space, he will inevitably come into contact with Focus's information dissemination." When he went out, he saw Focus's elevator print advertisement in the apartment, came into contact with Internet advertisements after entering the office at work, and saw Focus's mobile phone wireless advertisements on the road. , When you go to office buildings, you can see Focus video advertisements and DM media advertisements; you can see Focus’s outdoor LEDs when you are leisure, you can see the advertisements of fashion people when you have a haircut, and you can see the advertisements of leaders when you are playing golf; you can also see Focus’s stores when you go shopping. , convenience store, pharmacy video.In short, the information network established by Focus is everywhere and all the time.

Focus’s acquisition model was described by Qian Xuefeng, director and general manager of Hanli Capital, as the “Cisco” model. He revealed that Cisco’s growth all the way back then relied on continuous mergers and acquisitions of emerging network technology companies to replace itself. research and development, investment.Today, this development model has been used by Focus with great proficiency. "In Silicon Valley and venture capital circles in the United States, becoming a company with a market value of 10 billion US dollars is the beginning of being promoted from a 'Good Company' (Good Company) to a 'Great Company' (Great Company)." The acquisition is moving towards a "great company".

After completing a series of merger and acquisition plans, Focus Media has preliminarily completed the overall layout in many fields such as outdoor video advertising, mobile phone advertising, and online advertising, and is in a leading position in each field.But in the eyes of Jiang Nanchun, the current success of Focus Media is just another starting point. He has more confidence in the future. He still likes to introduce the strategy and core value of Focus Media to people in detail. After owning commercial building video media, store terminal video media, apartment elevator flat media (frame media), outdoor large LED color screen media, mobile wireless advertising media, Internet advertising and many other media networks that target specific audiences and can be organically integrated with each other, Jiang Nanchun summarized the company's development direction in this way: "Focus will build an ever-present and ubiquitous digital media platform that revolves around the lifestyles of mainstream urban consumers." "Our strategy includes two main directions. On the one hand, we pursue wider coverage, allowing Focus’s network to cover more media contact points of urban mainstream consumer groups, and strive to occupy a larger proportion of a person’s daily advertising information receiving time of about 1 hour; at the same time, we pursue a deeper Segmentation, at a specific time and space, to disseminate specific information to specific audiences. These two directions will continue to improve the media ROI of advertisers. After integrating the Yes Advertising Network, our overall layout is basically complete , the next step is to strive to achieve in-depth development and high-speed growth at each point."

The so-called striving to achieve in-depth development and high-speed growth at each point refers to making advertisements spread more accurately by increasing the intensity of communication after covering people's life trajectories.Jiang Nanchun believes that at present, an ordinary person spends about 1 hour a day watching advertisements accumulatively, while Focus covers the mainstream urban population, and some of them spend 5 to 10 minutes in contact with Focus advertisements. The advertising share of 10 minutes in this hour gradually reflects the status of Focus in Chinese advertising.”

Today, in the focus media industry, Jiang Nanchun can no longer find a stronger opponent.Jiang Nanchun said that Focus Media has already passed the era of "horse racing and enclosing land". Now, he will continue to maintain a "creative" business idea and find a more promising development direction for Focus Media. Focus Media’s wholly-owned acquisition of Allyes, China’s largest online advertising operator, can be regarded as a strategic acquisition of Focus Media. This acquisition enabled Focus Media to open up a new business space outside the field of outdoor video. Entering the Internet advertising field with huge potential, and firmly sitting in the leading position, this has improved the sustainable growth of Focus.

After the successful acquisition of Allyes, Jiang Nanchun turned his attention to a broader space.After entering into Internet advertising, Focus Media put forward the strategic goal of building China's largest digital media group.Analysts predict that if you look at Focus's Internet advertising share from the perspective of revenue, it will account for 20% of Focus's revenue in 2007, and about 25% in 2008. The proportion of Internet and mobile advertising business will gradually expand. Faced with the problem of Focus Media’s digestion brought about by rapid expansion, Jiang Nanchun once said: “Focus Media’s several acquisitions in the past two years have been relatively successful: the acquisition of Frame Media at the end of 2005 allowed us to enter the apartment community, an important media contact space. , this business has now accounted for 20% of Focus's overall operating income, and its continuous high growth has also been fully affirmed by the market; the merger of Juzhong Media in early 2006 not only made a qualitative leap in the platform scale, but also enabled us to recover from the long-term tension. After getting out of the competition, I have more time and energy to think about the overall strategy and development strategy in the future; after the acquisition of Kaiwei Diancao to enter the field of wireless mobile phone advertising, and the acquisition of Allyes to enter the field of Internet advertising, it is equivalent to putting one foot earlier We have stepped into the future of media development. Every acquisition has brought us huge benefits and growth points, and this benign integration has not hindered the development of Focus Media as a whole.”

Jiang Nanchun said, "There are two things for me: one is not to do it if you are not familiar with it, and the other is not to do it if you don't experience it yourself. Specifically, I must do the industry I am familiar with, because I believe that any successful entrepreneurial It requires a lot of knowledge and in-depth understanding of the market, industry, related products and information, without these foundations, the probability of success is very small." In his opinion, as Focus Media, he has more than ten years of experience in the advertising media industry. The accumulation of management and operation of a company, those experiences let everyone know more clearly what the audience needs, what advertisers pay attention to, and what he and Focus can provide, so as to have a relatively early understanding of the future development trend of Focus in China's media industry. judge. "So Focus has been at the forefront of the trend from the very beginning, and has been in the forefront. It is not necessarily a consensus among everyone in corporate management. What I want to emphasize is to maintain my sensitivity to the market and maintain the strong execution of the team. Strength, these two points are especially important for a new enterprise.”

"Integration is like a snowball. The bigger your snowball is, the easier it is to roll, and the more things will roll in." Wu Mingdong, CFO of Focus Media, described the company's mergers and acquisitions in this way, "The media industry is a special industry that must be acquired through mergers and acquisitions. Scale benefits, and improve the pricing power of advertising. To become bigger, Focus must be merged and acquired, otherwise, it will always be just a small company.” Today, Focus has a market value of about 7 billion US dollars, and the snowball is getting bigger and bigger. Dozens of large and small mergers and acquisitions have been carried out.

According to analysts, Jiang Nanchun seems to have no intention of stopping the acquisition. In January 2007, Focus Media sold its shares to cash in about US$500 million.Analysts believe that this fund is used to acquire Allyes, and the price of acquiring Allyes at that time was only about 200 million US dollars.Regarding future mergers and acquisitions, Jiang Nanchun said that in the next period of time, Focus Media does not rule out that it will continue to acquire new companies, and the possibility of mergers and acquisitions in various fields also exists. "As long as these are met, we will resolutely carry out mergers and acquisitions." Jiang Nanchun said, "There are three criteria for mergers and acquisitions. As long as they are met, Focus will take the initiative to attack."Jiang Nanchun refers to the three criteria for Focus Group’s initiative to attack mainly including its core criteria - mergers and acquisitions can create value for shareholders, and are value-added rather than diluted; In-depth subdivision; third, in line with the future development trend of new media, that is, the four principles often said by Focus—the ability to use high-tech means to greatly improve the expressiveness and power of the media, focus on creating a new Time and space can achieve mandatory viewing effects. And a group of companies established in the market whose ultimate goal is to sell to Focus has strengthened the confidence of Jiang Nanchun and Focus companies to a certain extent. "Many people wanted to sell to Focus Media from the beginning of their business, but they often failed to sell in the end. Many people never thought that they would sell to Focus Media, but they were acquired by us in the end." Jiang Nanchun said that today's Focus Group, many people just See the surface, but do not understand the essence of Focus. "Now there are still people who hang screens everywhere every day, and want to sell me some screens." In his opinion, these people are really outdated. Jiang Nanchun said that there are too many people who want to meet and talk with him now. These people talk about the value of their company in front of him, but they don’t know that Jiang Nanchun has only one evaluation standard, which is the value to advertisers. , otherwise he finds it meaningless. "The future development of Focus Media will be based on two strategies: the pursuit of wider coverage and more in-depth segmentation. The pursuit of wider coverage can increase the cumulative time the audience receives advertisements, and reach a wider audience by extending its product line. domain coverage." "The gross profit margin of this industry depends on how much added value you bring to advertisers." Wu Mingdong, Focus CFO who is in charge of M&A negotiations, also agrees very much.In fact, the existing outdoor TV advertising has become a mature "old media" within Focus. Jiang Nanchun's current work focus has gradually shifted from the original super-sales of building TV advertising, so he spends more time on finding more Growth and newer media investment opportunities.Just as Focus was very creative in selling advertisements by hanging LCD screens in buildings, Focus needs more such big ideas. On September 28, 2007, Jiang Nanchun confirmed that Focus Media acquired iResearch Consulting, which was founded in 2002 and focuses on new economic fields such as online media, e-commerce, online games, and wireless value-added. For network industry and traditional industry customers? ? ?Provides market research and strategic consulting services, and focuses on the analysis and research of Internet and wireless value-added services. It has long been recognized by the industry as the most authoritative network economic research institution in China. In addition, there are other rumors of mergers and acquisitions from time to time: In September 2007, it was rumored that Focus Media acquired Beijing Miracle, intending to extend its advertising tentacles to online games; ...Rumors like this, in 2007, added a little mystery to the integration of Focus. Jiang Nanchun believes that technology-driven innovation in media and advertising will become a trend.In fact, "advertising technology" is already the core focus pursued by Focus Media. "Independent research and development, foreign introduction and acquisition, Focus will walk on three legs in terms of technology." Focus, which was controversial because it had no technical threshold, has become an important driving force when it steps up to a new level of digital media.