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AdForce Wants to Own Ad-Server Business In China

As the battle for ad-serving dominance migrates beyond the borders of North America, the big players increasingly turn their gaze to Asia. Recent moves by No. 2 player AdForce Inc. indicate the company views the region – or at least China – as a market it can’t afford to lose.

AdForce, Cupertino, CA, this week announced a three-year exclusive pact to serve banners for Media999, an Asian online advertising network that, AdForce said, will give it the largest market share for ad serving in China. And AdForce plans to announce several deals over the coming months on the wireless technology front – the realm where Asia likely will see online advertising explode.

Most Net marketers are familiar with ad networks such as DoubleClick Inc., 24/7 Media Inc. and Flycast Communications Corp. They often are less familiar with ad serving companies – the infrastructure firms whose technology actually targets consumers and delivers millions of banners across networks of sites every day. AdForce charges networks or sites on a negotiated CPM basis.

Over the last year or so, the field has consolidated from many players to two big ones: AdForce and the Dart technology operated by DoubleClick. The latter company is the largest ad server in the world. But AdForce wants to own Asia – an online advertising market whose growth is likely to outstrip Europe’s in coming years.

Media999 is a unit of SoftMedia Consulting Group, Dallas. The ad network reaches about half the 9.3 million Net users in China and 70 percent of the Chinese Net users in North America. Media999’s real network competition in Asia is 24/7 Media, whose ads AdForce also serves. (Ad serving data for Asian countries other than China is sparse.)

Dee Cravens, vice president of worldwide marketing at AdForce, said Media999 forms a good bridge to Asia because the company has plenty of connections on the Chinese mainland.

“They have good business acumen within China, because they have both that experience, and they have a relationship with the government, [to] which … you’ve got to be fairly well connected to accelerate a business in a short period of time in China,” Cravens said.

Media999 founder Bob Jing emigrated from China to obtain a master’s degree in business in the United States. Though he based his firm in Dallas, Jing knows people within the Chinese government and in Hong Kong’s business community.

The Chinese government wants to globalize its economy quickly, particularly its exports. But, it’s a government that has traditionally been averse to surrendering too much control.

“I think that what China has come to reconcile in the government is that this is probably the fastest and the quickest, and, in many ways, the most controllable way to accelerate their economy on the globe,” Cravens said.

Part of the reason the Net provides a quick commerce infrastructure is that it doesn’t require vast land-based lines – or at least it won’t if the increasingly trumpeted wireless Internet revolution takes off with as much vigor as pundits say it will.

Along those lines, AdForce plans to announce a partnership with a firm whose technology makes wireless Net communications deliverable to devices such as cell phones. AdForce also will work with an unnamed U.S. cell phone manufacturer and a major cell phone services company, but Cravens said he could not yet elaborate on those deals. A wireless reservations deal with a big hotel chain is in the works as well.

“We’re actually building our technology around wireless right now,” Cravens said.

Elsewhere on the Asian front, AdForce plans to install servers in Singapore and Taiwan. It already operates servers in Beijing, China and Hong Kong. The company has made its technology capable of accommodating the 364 letters of the Chinese alphabet as well. DoubleClick representatives were not immediately available to discuss whether its Dart system is capable of the same.

Though AdForce is owned by Internet conglomerate CMGI Inc., the company is independent and serves ads both for other CMGI units such as Adsmart and outside networks, including most notably 24/7 Media.

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