SINGAPORE - Year-old AdXplorer wants to get into Internet marketing in a big way, and it wants to do so in Asia.
"On-line media's share of total advertising in all Asian countries is well below on-line media's share of total media consumption,"
To be successful, the company will have to prove the effectiveness of marketing on the Net and it will have to prove it through a localized approach.
That is exactly what this company has been doing over the past year, building a record of successful case studies to demonstrate the power of the Internet to "pander" products. And in the process proves itself capable of doing so in an Asian context.
The Internet is a new medium, and traditional companies, big spenders on advertisement, remain cautious about its effectiveness as a marketing tool.
A recent Salomon-Smith-Barney report estimates that while Internet usage in Korea accounts for 8% of total media consumption, on-line advertising remains at less than 1.5% of total advertising expenditure.
"On-line media's share of total advertising in all Asian countries is well below on-line media's share of total media consumption," the report noted.
AdXplorer's CEO and founder, Anthony Young, does not see any obstacles in the way.
"We are probably where the U.S. was in 95-96, we're that far behind in terms of marketing on-line."
"With marketing, we're trying to talk to the whole population, so you've got to really have a certain level of penetration to really kick in," Young explained. "We estimate that to be around a third of the population."
According to Young's estimates, most of the more developed markets in Asia have already reached that critical mass.
Even in China, where the overall penetration remains low, Young estimates that with the three main cities of Shanghai, Beijing and Guangzhou, the penetration rate is around 38%.
Still, Young points out that Internet marketing in Asia remains at a teething stage.
"We are seeing a lot of companies who are trying online marketing this year, to test the results and see if it works," said Young. "This is definitely a very early year. We are probably where the U.S. was in 95-96, we're that far behind in terms of marketing online."
Testing its effectiveness was precisely what Johnson & Johnson wanted, to find out when it retained the company to run an advertisement campaign for its Acuvue lenses in August.
The campaign ran for 21 days in Hong Kong with a WAP device given away as the main draw. One of its objectives was to see how well Net advertisement is able to turn spectacle-wearing prospects into customers.
Something that works in the U.S. may not necessarily work in Asia.
"Local Asian case studies and local success stories, actually, has been very critical for us driving out our business model,"
And marketers here do not like hearing about how success in other regions will naturally translate into success over here, according to Young.
"Marketers are going, hey don't give me stuff from America," said Young, "show me what I can do here."
In fact, according to Young, a key point of AdXplorer's success in the field depends very much on its ability to bring to the table strong Asian experiences.
"Local Asian case studies and local success stories, actually, has been very critical for us driving out our business model," said Young. "Marketing on the Internet is very much about testing and measuring and developing local success stories. And that's definitely what clients are most interested in."
The Johnson and Johnson experience will be one such story to add to AdXplorer's book of case studies.
The campaign had two objectives, to turn spectacle wearers into one-day users of Acuvue contact lenses and to target the teen population.
The tools for achieving the objectives are simple, banner ads and a lucky draw to give away a WAP device.
After 21 days of targeted postings of multiple banner ads, J&J took the results of the number of people who have actually responded to the advertisement and made a comparison with results from previous campaigns on traditional media.
The result, according to Young, has been that four times as many people responded to the Internet campaign for the same budget as advertisement in off-line media.
"We showed that we were able to secure new customers at a quarter of the cost, on-line versus off-line," said Young. "That was a real visible result."
Furthermore, of those who clicked through the banners to register on-line, over 60% actually went out to a counter offline and acquired the prescription contact lenses.
For Young, the J&J campaign also illustrates a key point about the Internet - responsiveness.
Throughout the three-week campaign, the scope and orientation of the campaign had actually changed from week to week.
"With the Internet, even if it's not right, you can change it as you go, and you haven't spent all your money up front,"
From postings on teen sites in the first week, AdXplorer expanded the campaign in the second week with additional banners and began posting on computer sites and comic book sites as well.
By the third week, the marketing company thought it knew enough about what worked and what didn't to focus their efforts.
The result was a jump from just over 0.5% of click through rate to over 2.3% by the end of the campaign.
"Everything about the Internet is about testing and data and responses," said Young. "I guess our stand is that the more you change a campaign, the better the campaign will improve in results."
"With the Internet, even if it's not right, you can change it as you go, and you haven't spent all your money up front," Young added.
The hard part, according to Young, is to get clients, especially brick-and-mortar companies, who are used to traditional media advertising, to begin to see the Internet in a completely new light.
"The real challenge, we've found, is in trying to get clients to not think about [marketing] offline and apply the same principles online," said Young. "Because if you do that, you are only using half the medium."
Since its founding in Singapore a year ago, AdXplorer has expanded to a size of 130 employees with offices in Singapore, Hong Kong, Beijing and Taipei.
It has used up US$5 million of funding from private investors and is tying up discussions with a VC for additional funding.
Young's personal wish includes the company coming into a black quarter by next year.