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To: ms.smartest.person who wrote (1308)	5/30/2001 12:15:21 AM
From: ms.smartest.person	Read Replies (1) \| Respond to of 2248

AdSociety targets wireless push Strategic deals set to help small player weatherthe hard times faced by broadband industry 2001-05-30 Terms and Conditions Amid the drying up of online advertising dollars, new-media sales network AdSociety is attempting to differentiate itself from bigger online adversaries, such as Engage and DoubleClick, by taking an early lead in broadband and wireless advertising. Led by former MTV Asia head Patrick Jonathan Wong, the year-old company has signed three deals in the past six months. These could well see the small player weather the tough online advertising climate better than its pure online cousins are managing. AdSociety, majority-owned by Pacific Century CyberWorks, has made some smart moves. Instead of starting up its offices in South Korea and Japan - the two most lucrative advertising markets in Asia - it set up partnerships with LG Advertising in Korea and Tokyu Agency in Japan. AdSociety holds controlling stakes in both ventures. "If we had gone in and set up an office on our own, we would just be a small player in a foreign market," Mr Wong said, adding that the partnerships were solid. "Our partners have deep pockets, are well-established names in their countries and are trustworthy," he said. Korea and Japan probably are the two most promising markets in Asia in the short term with its homogenous environment and world-class infrastructure as well as high PC and mobile-phone penetration rates. Japan has been relatively insulated from the dotcom correction as a result of wireless Internet optimism. AdSociety surprised the industry with its ability to secure partnerships with traditional advertising agencies. LG Advertising and Tokyu Agency are both seen as conservative firms which sought only domestic partners. However, it also is indicative of a trend that happened two to three years ago in more developed markets such as the United States and Europe, with traditional agencies, pressured by clients, starting to merge, acquire or form links with new-media firms. This gives them a more integrated online and offline marketing offering. "What is happening is that traditional advertisers are finally coming in. They have sat and watched dotcoms spend and build brands during the past two years, watched them crash and burn, learnt a few lessons and now they are coming in," Mr Wong said. He said about 80 per cent of AdSociety's clients were traditional advertisers, including Coca Cola, which has increased online spending. LG Advertising, which belongs to Korean conglomerate LG Group, is a 40-year -old, traditional advertising company with a large stable of clients including Baskin Robbins, Snickers, Microsoft, SeoulBank and E*Trade Korea. It has a 12 per cent share of the nation's advertising market. AdSociety's joint-venture announcement with Tokyu Agency last week was a surprise because the traditional Japanese company had never before been in a partnership with non-Japanese firms. Tokyu Agency, established in 1961, is Japan's third-ranked advertising agency with revenues of 200.1 billion yen (about HK$ 13.02 billion) last year. Its strength lies in traditional advertising. With the popularity of wireless Internet on mobile phones in Japan, Tokyu Agency felt it needed a partner in an area which it had scant expertise. Katsuhiro Shibata, manager of international affairs at Tokyu Agency and one of four board members in the KK AdSociety Japan joint venture, said the advent of digital technology and broadband Internet meant more opportunities had opened up. "It is no longer communicating just from business to business. We can reach consumers directly using this interactive medium," he said. Tokyu Agency chose AdSociety because it was attracted to its emphasis on broadband and wireless advertising. "We hope to develop jointly the Japanese market and opportunities in advertising on the mobile phone. Starting with the clients we have," he said. It is early days for wireless advertising and the industry is assessing how to include advertising on mobile phones without deterring consumers. Japan and Korea, with high-speed data access via mobile phones and high mobile -phone penetration, are ideal test-beds. AdSociety has an exclusive arrangement with SkyGo, a US-based technology provider of wireless advertising platforms, with AdSociety serving as the advertising sales partner to SkyGo's carrier and publisher customers in the Asia-Pacific. SkyGo's products include modules for implementing loyalty programmes, banner advertisements, sponsorship programmes and mobile-commerce applications over wireless networks to mobile phones. The platform supports Wap and SMS, but will be extended to support next -generation wireless services such as GPRS and 3G. The Internet advertising opportunity in Japan, according to Mr Wong, is worth US$ 1.6 billion. "We are aiming for just 1 to 2 per cent of US$ 1.6 billion in the first two years," he said. Mr Wong believed the online advertising industry was not all doom and gloom. He said in two years, the medium would be more firmly established and it would be the norm to spend online. Terms and Conditions Copyright© 2000 LEXIS-NEXIS, a division of Reed Elsevier Inc. All rights Reserved. quamnet.com