Chapter 50 Online Advertising: A New Profitable Line of Business

Ji Hairong, spokesperson of Focus Media, confirmed in early 2006 that in addition to developing existing building advertisements, Focus Media will also enter the Internet and mobile phone fields with more technical content. In March 2007, Focus Group acquired Allyes, a leading online interactive marketing service company in China, and Focus Group's business officially entered the Internet. In September 2007, Jiang Nanchun confirmed for the first time that Focus Media had fully acquired iResearch Consulting Group.Founded in 2002, this company focuses on new economic fields such as online media, e-commerce, online games, and wireless value-added, conducts in-depth research and understanding of consumer behavior, and provides market research and strategic consulting services for Internet industry and traditional industry customers. A professional market research organization has been focusing on the analysis and research of Internet and wireless value-added services, and has long been recognized by the industry as the most authoritative network economic research organization in China.

"Internet is the long-term strategy of Focus Media." Jiang Nanchun said that through the understanding of websites and Internet users' surfing habits, and grasping the development and transformation trend of China's Internet sector, Focus Media's Internet strategy began to expand.In terms of creating new value in the advertising industry, the Internet has an extremely strong development momentum, and this is inseparable from its own advantages and changes in the development environment of the Internet industry.Compared with traditional media advertisements, online advertisements have many inherent advantages:

First, it has a wide coverage.Online advertising can spread advertising information to all parts of the world 24 hours a day through the Internet, without geographical restrictions or time restrictions. Second, from the perspective of the number of audiences, although as a brand new medium, the speed of the development of the number of Internet audiences is astonishing.At present, the number of Internet users in China ranks second in the world, reaching 210 million, and the number of people under 30 years old occupies the first place in the world.This audience group is particularly attractive to advertisers.

Third, traditional media advertisements can only be played or published unilaterally. To know the effect of advertisements, it is necessary to conduct user surveys before and after the advertisements are launched; while Internet media have features that can be monitored, evaluated, and evaluated. It can accurately monitor and evaluate the number of users, exposure, clicks, distribution, and the whereabouts of users after exposure to advertisements at any time, and then optimize and replace advertising materials. In addition, the rapid spread of broadband has undoubtedly laid the foundation for emerging media and advertising formats.According to CNNIC statistics, among the 210 million Internet users in my country, broadband Internet users (including leased lines) have reached 163 million.In the next few years, telecom operators are expected to launch faster broadband access services.

Analysts believe that with the development of the Internet, online advertising is becoming a trend. More and more companies choose to advertise online, and there are huge profits hidden in this field.The well-known American media investment company VSS recently released an annual media industry research report, pointing out that in the next four years, the scale of online advertising in the United States will grow at an annual rate of 21%, and it is expected that by 2010, it will surpass newspaper advertising.According to the research results of iResearch Market Consulting, due to the positive impact of the Beijing Olympic Games and the rapid rise of paid search advertising, the development of China's online advertising market is promising. In 2007, the scale of China's online advertising market has exceeded 9 billion yuan.Against the general background, Internet advertising is showing the great value of Internet emerging media.

Today, the Internet has become an important business segment of Focus. After gradual acquisitions, the layout has been basically completed. The bottom layer of this layout is represented by iResearch, the most authoritative network economic research institution in China, to conduct tracking research on Internet users and websites, and at the same time Combined with Allyes' full traffic monitoring, based on the in-depth understanding of Internet users and the website itself, Focus has laid the foundation for insight into China's Internet advertising. The second level is the product level. When Focus acquired Allyes, aQuantive (an American company dedicated to helping corporate customers plan and implement Internet-based advertising campaigns) and Double-Click (an American Internet advertising company) were acquired in the United States. According to news of Microsoft and Google's acquisition, many technologies of Allyes have basically integrated similar services, using network technology companies represented by Allyes to launch comprehensive advertising solutions to provide comprehensive solutions for customers' brands.At the same time, based on these technologies, Focus has launched four major product lines in the Internet segment:

1. More accurate online advertisements based on AdForward technology, such as precisely positioned advertisements developed based on features such as regions, texts, and browsing habits. 2. Video ads.Focus has integrated hundreds of well-known websites, using its own video playback technology to realize the precise broadcasting of a video advertisement across media, and can also add Allyes extended videos or scene animations to MSN, all of which are Allyes What video technology can bring. 3. In terms of AdExchange, Allyes Smart Trade has established an alliance of more than 5,000 small and medium-sized websites, and adopted a pricing model based on the actions taken by each visitor on online advertisements.For example, Focus Media advertises for ChinaHR. When Internet users see and click on its advertisement, ChinaHR.com does not need to pay for the advertisement, but pays for the advertisement according to the number of resumes received.

4.In-game product placement.The world of online games today is more and more realistically presenting real-life scenes. For example, we can place Coca-Cola’s In Game in a racing game. It is very natural for gamers to come into contact with and accept this kind of product placement. . The layout of Focus Media in Internet advertising has basically grasped the future trends of precise targeting, video, AdExchange, and product placement in this field, and the development model it chooses is based on the concept of industry win-win.Focus Internet advertising has two modes: on the one hand, these value-added products launched through technical means are to increase the ROI of advertisers; Value is enhanced.Advertisers are willing to spend 10 yuan to buy an audience he wants, but are unwilling to spend 5 yuan to buy an audience he does not know who the other party is. If they re-operate these traffic and develop the richer value behind it, through Technical means make the traffic of these media increase from 5 yuan per CPM to 10 yuan per CPM, and its profits can be realized in the process of value-added, which can benefit advertisers, media and users.

As an important part of the digital media platform, Focus Online Advertising still maintained a strong growth momentum in the third quarter. According to the financial report data of Focus Media in the third quarter of 2007, the Internet advertising service revenue of Focus Media in the third quarter was US$42.5 million. Compared with the US$25.2 million in the previous quarter, it has increased by 68.5%, and its proportion in the total revenue of Focus Group has risen to 27%.In Focus Media's Internet advertising service revenue, digital marketing services accounted for 94.0%; rich media, pay-for-effect and technical solutions accounted for 6%.

Analysts believe that with the completion of the initial layout of Focus Media in the field of Internet advertising, its online advertising traffic-based monitoring and analysis, and iResearch’s market consulting sample qualitative tracking and mining will help Focus Media more sensitively touch the development of Internet advertising, Focus Media's digital transformation has taken the lead in the Internet advertising field. AdForword's leading technology, Focus's customer resources, and iResearch's scientific analysis will effectively escort Focus Media's online marketing carrier.Experts predict that Focus Media's current market share in China's online advertising is expected to exceed 25%.