Mobile publishers need to show unique value to advertisers: Morden Chen, Cheetah Mobile
We spoke to Morden Chen, GM (APAC Ad Sales) at Cheetah Mobile to understand more about the potential of the mobile platform for brand building
Chinese mobile internet company Cheetah Mobile is known for its utility apps like Clean Master, Battery Doctor and CM Security as well as popular games like Piano Tiles. A little known side of the company is their focus on developing the mobile phone as a branding platform. In India, Cheetah Mobiles works with Ventes Avenues to push their branding solutions. We caught up with Morden Chen, GM (APAC Ad Sales) at Cheetah Mobile to understand more about the potential of the mobile platform for brand building.
How important is India as a market for Cheetah Mobile?
We have more than 600 million users worldwide with around 80 million in India. India is the second biggest market for us after the US when it comes to branding revenue, while it is the biggest market in APAC (not including China.) We started our branding business in India and it is now a huge business for us. Advertising is the most important monetization model for us and accounts for nearly 90 per cent of our global revenues. For the future, we are focussing on big data, AI and robotics.
How difficult is for publishers to compete with Facebook and Google for ad dollars?
Mobile publishers need to have some unique value that is relevant to the advertisers. For example, we have a lot of data due to our unique tools that other publishers do not have. Lots of people haven’t figured out that there are other options apart from Google and Facebook. The thing is that all B2B businesses have latency in adopting new solutions. They want to test a little bit, check it first. So, it is important for us to educate the people about our solutions.
Is this something that is similar in other geographies too?
It is actually a very global issue. Even in the US, 99 per cent of all new mobile investments in 2016 went to Google and Facebook. In APAC there are countries where Google and Facebook are not dominant. For example, in Indonesia, the major mobile messaging app is Blackberry Messenger, which has been acquired by a local media conglomerate. In India we have big players like Times of India and local start-ups like DailyHunt, InShorts and our own News Republic, which is also in the Top 10. It is all about whether you can deliver value to the advertisers and their agencies and whether you have the right people to execute the campaigns. I believe in APAC; in most of the countries in APAC there are a lot of local players and there is a lot of demand which cannot be fulfilled by just Facebook and Google. These are global companies and they will not be able to customize their solutions for every local market. Thus there is a lot of potential for local players.
Do you think this will actually cause a more fragmented marketplace?
It is all about the stage the market is in. Right now is the stage when a lot of people are getting funding and so everyone wants to be among the top two in the market. In the internet era, if you are No.3 then you are something but if you are No.4, you are nothing. As long as you are getting funded, you will want to be in the market but I think in a couple of years we will see only two or three players survive in each category. You have to be No.1 or 2 in your category to get economies of scale, which you cannot do if you are small and so your cost is higher. In the beginning it is fragmented, but in the end, it is always a case of winner takes all.
What is the potential that you see for the mobile as a branding platform?
The reason I mentioned branding is because many people view mobile as a performance advertising platform only. The question asked is “How can I spend by branding dollars on mobile?” but we are getting there. Many people use a phone when they have to complete an action, whether it is downloading an app, going to a mobile website or making a call. So you have to treat it as media. I have noticed a trend in India where more people are starting to view the mobile phone as media and not just as a traffic source to do customer acquisition or generating traffic. So the branding potential is getting bigger. This is why we are working with Ventes Avenues (Cheetah Mobile’s India sales partner) to launch new ad formats. We started with full screen static ads and now we have full screen vertical videos. Most agencies make horizontal videos because they are thinking from a TV perspective but on mobile phone it has to be vertical so we convert their videos to vertical format.
Where do you see Cheetah Mobile in a few years?
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We will continue to invest in our content business here (in India), which is Live.me and News Republic. For Live.me, we were working with a lot of influencers who have their own talkshows. News Republic is a news aggregator and we are working with media companies, User Generated Content (UGC) and Professionally Generated Content (PGC), who have special interests or skillsets. For the utility apps, we are working with OEMs.
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