An Interview: Engaging the Consumers

We made it to the news. Recently, Innity CEO, Phang Chee Leong sat down with The Star to talk about Engaging Consumers in the digital age.

From The Star

INNITY Corp Bhd, which sells online advertising space on over 10,000 websites in South-East Asia, takes pride in being a trendsetter.

The Ace Market-listed company has been the first to launch several online marketing technologies in this region.

Among others, it has rolled out innovative advertising formats, some of which are not suited to the traditional payment models such as cost per click.

Hence the Innity ad network has introduced a first-in-Asia payment model called cost per engagement (CPE), which Innity group chief executive officer Phang Chee Leong hopes will gain wider acceptance.

The common ways of buying online media are cost per duration (time-based), cost per thousand impressions or CPM (based on the frequency of ads) and cost per click (advertisers don’t pay unless the computer users click on the ads), Phang is hoping that advertisers will change their mindset by accepting the CPE model.

“In the United States, people have already adopted CPE, which is sometimes called cost per interaction,” he tells StarBizWeek. “Clients here are so used to the click and CPM models, so we will have to spend more time educating the market. When Google started using cost per click (in 2002), it also had to educate the market.”

He says the CPE model can capture performance in terms of a “mouseover”, when an advertising video pops out as the computer user glides his cursor over the online ad or a text ad strip (no clicking necessary).

“The CPE model can deliver customer engagement for marketers who want to bring a new digital experience,” Phang says.

He shows this reporter various advertising formats with useful features from “light box” to “engagement bar” where the CPE model would be a better model because no clicking is required. He thinks the website owners will also prefer such formats because the viewers are not driven away from the sites.

One of the compelling reasons for the new ad formats and the CPE model is the low average clickthrough rate globally, it is only about 0.2% today (two people click for every 1,000 times an ad is delivered).

“Getting clicks is harder now. We have to recognise that the clickthrough rate is low. On the other hand, engagement rates can be as high as 2% to 6% based on the ad campaigns we’ve done,” he says, adding that the industry standard is 2%.

But how does Innity ensure a “genuine” engagement as opposed to someone accidentally moving his cursor over the ad? “We implement a buffer of one to three seconds,” Phang replies. He says that the company is seeing more campaigns running on the CPE model. More than half of the sites in its network have accepted CPE.

Asked whether Innity would work with other advertising networks to promote CPE, Phang says it would like to have a partnership with more online publishers instead because it would be easier for the company to work with them on new models than with its industry peers.

On the future of online advertising, Phang says Innity strongly believes in ads that appear in conjunction with online videos.

“We are putting a lot of effort on researching video advertising technology,” he says, adding that it includes having ads that pop out before, during or after a video content is played.

Other projects in the pipeline include extending its services to the small and medium business sector. At present 80% to 90% of Innity’s clients are big companies.

“The SMEs and SMIs may not have big marketing budgets, so online media is suitable for them. Our technology allows them to do performance-based (spending) and caters to the size of their budget,” he says.

The beta testing for the technology is expected to be completed this year.

Asked whether Innity will increase the number of websites under its network, Phang says: “Sometimes it’s not just a numbers game. We’re more interested in getting the reach in terms of Internet population. In Malaysia we’re at 75.5% and maybe we can increase that to 80%.”

In Malaysia, Innity reaches 80% of Malaysia’s 10.6 million Internet audience in March, according to a comScore report. That makes it the largest ad network in Malaysia in terms of reach, excluding Google (88.7%). It is also the largest ad network in Singapore (with 84.7% reach) after Google, and the largest in Vietnam (98% reach) and Indonesia (83% reach).

Websites must meet certain minimum requirements to host ads within the Innity network. Among them are that the sites must have at least 100,000 page views per month on average and a minimum of 20,000 unique visitors per month.

“We want to make sure of the quality of the websites,” he says.

With technology, Innity can do present different ads for different geographical areas. It also can do time targeting (for example, a restaurant ad can appear just before lunchtime) and contextual targeting (if an online article talks about cars, for example, a car ad can appear).

Innity is the first ad network in South-East Asia to launch the re-targeting technology.

“Usually an advertiser shows an ad and expects the audience to click on it and go to its website. Re-targeting is a reverse model where the starting point is when you go to a website. Say you go to a Toyota website and leave without having read a lot of pages or completing some action such as completing a form. So the Toyota ad will trigger again on other websites and follow you in a way, based on your interest. This is an advanced type of behavioural targeting.”

He says that the technology is so new that even in the US, it’s been introduced only about a year ago.

But does re-targeting contravene privacy laws? Phang says that its tracking is anonymous, meaning that Innity doesn’t know who exactly it is tracking. “I only know her behavioural preferences such as she likes to read the sports section. In fact, I only know about the computer she’s using. If she uses a different computer, there’ll be a new profile. And we don’t track every usage of the Internet; we only those websites within our network,” he says.

He says that hopefully this year it will roll out an “opt out” function similar to email opt-out. “You can opt out if you’re annoyed by the ads. We use contextual behaviour and re-targeting because we want ads served to you that are relevant to you. If we show the wrong ads, you’ll get more annoyed,” he says.

“Users will be able to opt out by clicking on the opt-out button on Innity’s privacy policy page on our website,” he says.

He says its ad serving system is fully transparent and is the only one in Asia certified by the New York-headquartered Interactive Advertising Bureau. “I think it’s a big achievement,” he says.

Currently 30% of revenue comes from overseas. For Malaysia, have 700 to 800 websites.

He says it is still a challenge to get advertisers to increase their online budget. He estimates that in Malaysia, 1.5% to 2% of the country’s total advertising expenditure was spent on online media last year. “In China, the figure is already 12%. In the United States it is around 15%. We still have a long way to catch up,” he says.