8elements Mobile Marketing Solution Oct 9 v2

8elements Mobile
Advertising Project
Hong Kong, October 2014
www.8elements.net Page 2 8elements We understand Games !
Agenda
1. SITUATION
a) Mobile Advertising Ecosystem
b) Zoom on SEA
c) 8elements

2. DIFFICULTIES FACED AND OPPORTUNITIES
a) Our customer experience
b) SWOT

3. SOLUTIONS AND RECOMMENDATIONS

1. SITUATION Mobile Advertising Ecosystem
Advertisers
Publishers
Buy Traffic
Sell Traffic
Agency Trading
Desk(ATD)
Demand Side
Platform(DSP)
Ad Network

Mobile Marketing Fragmentation
Case 1: Direct relation between advertisers and Ad Networks
Case 2: going through an agency
Despite advances in mobile web, apps still
dominate the world of paid media: 87% of the
paid impressions on mobile are on apps
Average mobile CTR = 2.37%. 3 to 4 times better
than on Desktop. Format impacts much though:
Video: 8.8%
Interstitial: 5.5%
Standard banner: 0.8%
45% of clicks fail! Fat fingers, network speed,
unqualified traffic
0.12% of clicks on a campaign lead to an install.
1. SITUATION Zoom on SEA
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SmartPhone equipment is a growing the trend for the next few years in Asia Pacific.
Smarpthone growth is a key element to the increase of mobile advertising (app and mobile web)
since they can connect to internet
Data network quality is to be kept in mind though.
SMS remains an option for feature and Smartphones but on the downtrend and fading out (TBC)
INDONESIA
VIETNAM
MALAYSIA
THAILAND
Indonesia / OS penetration and trend
Thailand / OS penetration and trend

Malaysia / OS penetration and trend

Vietnam / OS penetration and trend

SEA/OS break down on Chartboost platform

SEA/iOS game sessions growth rate

Overall iOS growth (game sessions from Dec 13 to May 14) on the Chartboost platform
has been led by China, India, Vietnam and the Philippines.
SEA/Android game sessions growth rate

Overall Android growth (game sessions from Dec 13 to May 14) on the Chartboost
platform has been led by Vietnam, Indonesia, Philippines.
Mobile advertising spending is expected to grow rapidly in the next few years, following the
growing trend of Smartphone equipment in the area
All Asian countries taken into consideration in above graph. Some markets like China or Japan
obviously have a higher share compare to other countries, but the trend is common to all.
**Data from Statista
Malaysia Thailand Vietnam Indonesia
Ad Model CPM, CPC, CPI
CPC, CPI (mainly for
games)
CPC, CPM CPC, CPM
Price
CPM USD$8.7-9.2 Not popular
Varies greatly, from
USD$0.28 to $3
USD$1.4 to $3.3
CPC
USD$0.31 [price of 1
channel only, need Alicia
to update more]
USD$0.07 USD$0.14
USD$0.09 to $0.22
CPI Not popular USD$0.5-1 Not common Not common for mobile
CPA Not popular Not popular
Not common

Not effective
Common Targeting OS, Handsets Carrier, OS Carrier, OS, Handsets
Network Connection
Type, Location, Carrier
CPC is the ad model which exist in every countries, while CPI & CPA are not popular as they
requires higher technical level and industry experience
Pricing in Malaysia is much higher compare to other countries
Common targeting is rather limited in these countries, demographic targeting is near impossible
(except Facebook)
Overview based on local feedbacks
Malaysia Thailand Vietnam Indonesia
Brand Ads
Only International
Brands
Not really because
of Thai users habit,
the only one doing
massively is
Agoda/Booking.com
Depends on products, not yet
strong
Yes for the big
companies and MNC
companies
eg. Cars (Toyota,
Honda)
Local Ads
Games :No
Brands: Yes
Yes, but they stick
with Google

Cannot tell common
local ads as always
ignore that

Yes, can see local brands or
local game companies ads
when browsing mobile sites
or apps
Most common local ads:
1. Games (Mobile online
game)
2. Learning Program
3. Car/Banking
4. Fast Food (eg. KFC)
No for local brands or
game companies
Common Type of Ads
Normal banners,
interstitials (for cars,
common in app), video
(games), rich media
ads (very seldom)
Normal banners,
interstitials
Normal banners, interstitials,
video (games), rich media ads
Normal banners,
interstitials
Brand ads is not yet very common in the area, only big/international brands are doing that
There are local ads in the region, but same case as brand ads they are not yet that common
Type of ads still limited in SEA. Advanced ad type like rich media ads or native ads is not yet common
Country Malaysia Thailand Vietnam Indonesia
Local
Big
Players
Innity Adways VNG Adstar
Clicks Mobile Buzzcity Admicro Adplus
Yengo CleverAds mediaXasia
GoldSun Klikmedia
Here are the local big players in mobile advertising in each country
1. SITUATION 8 Elements
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
1000000
June July August
8elements Mobile Web and App Sessions (Monthly)
Mobile Web
App
Total
*Please note that sessions are not equal to impressions, in normal case which ads
display correctly every time, impressions should be much bigger than sessions
June July

August
Country
Mobile
Web Apps
Total
Sessions
Vietnam 56,639 92,623 149,262
Malaysia 7,251 375,785 383,036
Philippines 3,722 37,905 41,627
Australia 2,516 2,670 5,186
Indonesia 216 305,717 305,933
Thailand 37 19,246 19,283
Total 904,327
Country
Mobile
Web Apps
Total
Sessions
Vietnam 30,796 58,798 89,594
Malaysia 11,564 288,770 300,334
Philippines 3,519 21,307 24,826
Australia 4,909 2,925 7,834
Indonesia 173 210,576 210,749
Thailand 1 9,813 9,814
Total 643,151
Country
Mobile
Web Apps
Total
Sessions
Vietnam 53,848 47,707 101,555
Malaysia
11,433
223,055 234,488
Philippines
3,842
16,810 20,652
Australia 3,828 2,143 5,971
Indonesia 8 182,555 182,563
Thailand 6 6,915 6,921
Total 552,150
*App is obviously having a much higher
sessions/impressions than mobile web
*Current total sessions is declining as we did
not launch new apps or updates
Breakdown of sessions by countries in recent 3 months
Estimations of revenue with existing level of impressions and CPC model
(assuming we sell all the inventory)

1. Developing countries CPC estimated at USD 0.02

2. Mature countries CPC estimated at USD 0.05

Low CTR Average CTR Medium CTR High CTR
Monthly impressions 545,000 545,000 545,000 545,000
CPC USD 0.02 USD 0.02 USD 0.02 USD 0.02
CTR 0.5% 2.0% 5.0% 10.0%
Number of clicks 2,725 10,900 27,250 54,500
Revenue USD 55 USD 218 USD 545 USD 1,090
Low CTR Average CTR Medium CTR High CTR
Monthly impressions 545,000 545,000 545,000 545,000
CPC USD 0.05 USD 0.05 USD 0.05 USD 0.05
CTR 0.5% 2.0% 5.0% 10.0%
Number of clicks 2,725 10,900 27,250 54,500
Revenue USD 136 USD 545 USD 1,363 USD 2,725
We focused on CPC
model for now which
would be the most
achievable one
(attractive for
advertisers but not
requiring
complicated
technical
developments as for
a CPI model)
Estimation of revenue with impressions purchased to 3
rd
parties and CPC Model
(considering average CTR of 2%)

1. Developing countries CPC estimated at USD 0.02

2. Mature countries CPC estimated at USD 0.05

Low Margin Average Margin High Margin
Monthly impressions 100,000,000 100,000,000 100,000,000
CPC USD 0.02 USD 0.02 USD 0.02
Margin 10% 20% 30%
Revenue / CPC USD 0.002 USD 0.004 USD 0.006
CTR 2% 2% 2%
Number of clicks 2,000,000 2,000,000 2,000,000
Revenue USD 4,000 USD 8,000 USD 12,000
Low Margin Average Margin High Margin
Monthly impressions 100,000,000 100,000,000 100,000,000
CPC USD 0.05 USD 0.05 USD 0.05
Margin 10% 20% 30%
Revenue / CPC USD 0.005 USD 0.010 USD 0.015
CTR 2% 2% 2%
Number of clicks 2,000,000 2,000,000 2,000,000
Revenue USD 10,000 USD 20,000 USD 30,000
On Global & SEA we believe there is potential!
Mobile usage and mobile advertising are forecasted to raise rapidly in next few years
Mobile, especially apps should be the main focus of advertising in foreseeable future
Mobile ads have been existing in SEA for few years but it is much less developed
compared to mature countries like US and Europe
Currently no local big players exist in SEA mobile ad industry

1. SITUATION Conclusion
On 8elements not enough traffic but some alternatives
We cant be an ad network relying on our own traffic only
We are too small considering the current level of
impressions we have (both mobile web and app) and
the trend. We need to buy additional traffic.
Our targeting options are quite limited as well
Finding traffic shouldnt be too complicated especially in
markets such as Vietnam or Indonesia. Selling it is another
story.
Existence of fixed fee to start a campaign.
Existence of upfront fees prevents us to run a test and see if we can invest
further or not
Example: Massive Impact & DSNR are both famous performance ad network,
they are asking for a minimum budget of USD$5000 to start a trial campaign,
they claimed they need a big budget to try out the offers and market. It is not
an affordable trial budget for SME.

Level of CPC or CPA is too high
We dont have the necessary ARPU to justify the investment costs and we cant
test to validate the ROI
Example: Take our Maxis portal as an example, at least 2-3 channels are
asking for a CPA of USD$3 to get us 1 subscriber while our net LTV of 1
subscriber is only USD$2 (it is already higher than the average ARPU recorded
in US in 2012 http://www.statista.com/statistics/277471/gaming-arpu-in-the-
us-by-game-type/) . From this we can imagine only big players, brands or cash
cows are able to afford this level of advertising

1
Example of difficulties faced when dealing with Ad Networks, based on our experience
as a customer.
2

They dont keep their promise
Ad network/Marketing Agency are not able to deliver what they promised
Example: We agree to work with Pulse Mobile in Malaysia for a CPA of
USD$0.8, after we sign the contract they said that they are not able to make it
as USD$0.8, therefore we agree to raise it to USD$1.2. They tried to bring in
traffic but at last they only bring us 4 conversions for 8000 clicks, and the CPA
they are having is 15-16 times higher than what we offer so they agree to stop
the campaign

The instructions are not followed, lack of focus
Guidelines are clear but ad network making mistakes in the campaign set up
Example: We cooperate with MadHouse for campaigns in Malaysia and we
only need traffic of carrier Maxis, but they have sent us traffic of all carriers
and it was being discovered few days after the campaign started, and
MadHouse has finally refunded us on the spent budget
Example: We are running campaigns with Inmobi in Australia, and when we
update our URL in end August, Inmobi Account Manager is using a wrong URL
(which http:// is added again on our URL) which send users to an error page,
after being discovered they blame us why we discover it so late but they did
not apologize for their careless mistake
3
4
They are not responsive
It is very common for Ad network/Marketing Agency not to respond to our
requests/questions within the same working day
Example: We agree to work with Mob Partner in Malaysia for a CPA of
USD$1.2, we have integrated their tracking code and just wait for their
instructions on testing to start, however we are not able to reach their
Account Manager for few days. There are 2 reasons, they are located in
France which is having a time difference of around 6-7 hours with us, and
we are small partners with small budget so we are not a priority.

They do not necessarily know their product well / lack of training
Account Manager does not understand our targeting options for instance
Example: We planned to start campaign with Klikmedia for Celcom portal,
their Account Manager asked me what is Celcom before checking on their
own platform, and he is not the only one asking this type of questions.
Carriers may not be a common targeting option but it is very unprofessional
to ask basic questions before checking.

6
5
We cannot amend ad settings immediately even we discovering problems
Some Ad Network/Marketing Agency do not provide a self-serve dashboard
Example: We have run few days campaign with Madhouse but discovered
that the drop out rate is very high, by checking on Google Analytics we
realize that they are sending traffic of other carriers to us. However as they
do not provide a self-serve dashboard, we have to inform our Account
Manager to make the changes rather than do it ourselves immediately.

Limited targeting options
The targeting options are rather limited for most of the ad networks
Example: Except Facebook, we are not able to do demographic targeting
(eg. Gender, age) in most of the ad channels. In the other way around,
Facebook/Google are not providing carrier targeting so we are not able to
use them as a tool to promote mobile web. Sub segmentation targeting is
rather difficult.

7
8
Limitation in games/app file size due to slow internet speed
For games/app which exceed certain size users would stop installation process
easily
Example: From example shared by Chartboost, mobile and broadband data
speeds and costs for users could reduce the likelihood of the user installing
after the click, negatively impacting IR .
(http://blog.chartboost.com/the-golden-advertising-opportunity-asia-part-
2/ )

9
STRENGTHS WEAKNESSES
Strong experience with mobile ad networks in SEA as
advertiser
Local teams on the ground with good knowledge of
the mobile market
Existing inventory of gamers
Strong relation already with a major player: Gamevil
Some technical resources able to work on front-end /
back-end solutions (capability to handle entirely such
project TBC though)
Designers in-house with good experience on mobile
banners
Our traffic: lack of inventory (500K per month) and no
targeting options
Not so familiar with local mobile ad landscape / lack of
experience of cooperating with local ad channels
No one at 8lements worked in a mobile ad company
(Marketing, Operation, Technical) => not sure how
these companies are structured and their common
working flow, process
HR: some skills would be missing and might be difficult
to find. Professional sales person, technical expert

OPPORTUNITIES THREATS
Smartphone penetration and mobile ad spending on
the growth in SEA-Pacific
Even for mature markets like MY, there is still much
space for improvement (targeting, pricing)
Quality of service for clients can be improved
No big regional players at the moment dedicated to
SEA-Pacific
Some local inventory remain unsold

Competition will increase, already some big players in
place in SEA-Pacific (from Japan namely). Not fully
deployed yet but they could do so quickly
Mobile Ad market is developing very rapidly and
requires strong adaptation skills.

1. Country selection
Recap of each country situation
Recommendation and rationales
2. Type of structure:
3 major directions: Ad network, DSP, Marketing Agency
Requirements
Recommendations and rationales
3. Channels
4. OS Focus
5. Type of ads
6. Targeting
7. Cost model
8. Recap of recommendations
9. Recommendations based on our own experience
10. Alternatives directions
Methodology: We will now focus on the main criteria and expose our recommendations
accordingly so as to determine the direction we believe should be taken. Some of the
options are disregarded for now but could be considered as upgrades of our service at a
later stage.
Criteria MY TH ID VN
Maturity of the market Mid Low Low Low
Local Competitions High Mid Mid Mid
Our experience level Mid Low Low Mid
Difficulties to get extra traffic Easy Hard Mid Easy
Popularity of Mobile ads to
customers
High Low Low Mid
1. Country selection - Recap of each country situation

Table created based on the work and discussions with our local teams
1. Country selection Recommendations and rationales

After analyzing different aspects of each countries, below is our recommendations for
countries to start:

Recommendation Rationale
Country
Malaysia

1 of the major source of our own traffic. Mobile
ads just started to boom, should be easy to find
advertisers. We do not have local team but we
have experience there.
Thailand
X
Our local team is not so familiar with mobile
advertising, and Thai team said Thai people are
not interested in mobile ads
Vietnam

Cam in place with good knowledge of local
environment
Country with high potential (network, gaming
and apps)
Indonesia
?
Another major source of our own traffic.
However Is quality traffic really accessible there?
Do we have someone who can work on this
locally?
2. Type of structure 3 major directions
3 major directions can be considered:
Type Nature Examples
Ad Network
Connect to publishers and advertisers
directly, selling mobile advertising
inventory
Buzzcity,
Leadbolt
DSP
Connect to various Ad Networks and
perform real time bidding for
advertisers
Smaato
Marketing Agency
Achieve the goal given by advertisers
and make money in between
Pulse Mobile
Ad Network and DSP share similar nature but DSP is a more advanced option
Marketing Agency is selling different and value-added services, we will thus
consider as another alternative
2. Type of structure - requirements

Ad
Network
DSP
Marketing
Agency
Develop games/apps to generate traffic ? X
Own ad-serving SDK X X
Dashboard to set up campaign with targeting
options
X
Dashboard of reporting ?
Dashboard of tracking and optimization
function

Find publishers to integrate our ad-serving SDK X X
Find advertisers
Connect with different ad networks X X
Real time bidding function X X
2. Type of structure recommendations and rationales

Type Recommendations Rationale
Ad Network

We have our own traffic (around 500,000
sessions/month), and we get 8 to 9 additional
games to be launched this year which should
bring us enough impressions to start.
The strong relation with Gamevil is also an
advantage.
DSP
X

The major selling point of DSP is real time bidding
which require high level of technical input. We have
never work with DSP before and it would be too hard
for us to work in this direction as no one is
experienced.
Marketing Agency
?

The buying activities for our portal is a business of
Marketing Agency, we have experience in it and
we can start in small scale in the beginning.
However we would need to build up a
optimization dashboard before we can start
running offers for others.
3. Channels
Apart from countries, to move forward we have to decide which channel we are going to
focus on. According to data mentioned in part 1, app is making up the biggest part of time
spent on mobile.

Channel
Chosen
Mobile
Web
?
Time spent on mobile web is around 13%
only, but it is still quite strong in SEA.
App
Make up for 87% of time spent on mobile,
expected to be the focus of mobile
advertising onwards.
SMS X
An old mobile marketing way, still there but
fading out. Doesnt justify investment.
4. Type of ads
Type of ads means the option we open to advertisers for promoting their product via
mobile channel.

Type of ad
Interstitial
CTR 6-7 times higher than regular
banners
Video X
Video ads require good network
connection, SEA is still not suitable for it
at the moment
Banners
Still the most common type of ads,
although CTR is rather low
CPC comparatively would be lower
Native
Ads/Rich
Media
X

A new way of advertising, mostly for
games. But a bit too advanced in early
stage for a new advertising player.
Offer walls
?

It is mostly related to game/app
download, could be an option later if we
focus on apps.
5. OS Focus
OS focus
Android
The strongest smartphone OS in
SEA.
iOS ?
Depends on country we choose,
would only be interesting for
Vietnam.
Feature
Phone
X
Fading out but still a big part,
however we only have feature
phone traffic on our portals, would
be hard to find source of traffic

Priority Rationale
Targeting
options
Carrier Mid
Would be necessary in case we want to
include mobile web as well
For apps carrier should not be a necessary
targeting but would be good to have
Country High A must- have
OS High A must- have
Devices Mid
It is a targeting which would be good to
have, or at least OS version
Demographics
High but
hard to do
Too advanced, only big players like
Facebook who has lot of user information
would be able to do that
Network
Connection Type
Mid
Would be necessary for any business
related to carriers, would be important for
games above 50mb (Google Play) or
100mb (App Store)
Category/
Channel
High
Important for game and apps to choose
the right publishers
6. Targeting priority (High/Mid/Low)


Ad Model
CPM ?
Popular for brands, depends on which kind of advertisers
we are looking for.
CPC
1 of the most common ad model in SEA, more reliable
and popular for advertisers, not requiring high technical
input.
CPI/CPA ?
More advanced option, we would need more technical
input to get this ad model available
Not an option for current status, but more and more
advertisers are looking for this type of model.
7. Cost model

Ad Model would be the charging option we provide to advertisers.
Depends on our targeted customers (brands, mobile players) but also the maturity of
the countries (requires higher technical input and quality traffic )
8. Recap of recommendations
Type of structure Ad Network
Country Malaysia, Vietnam, Indonesia
Channel Chosen App, Mobile Web
Type of Ads Interstitials, Banners
OS Focus Android, iOS (Vietnam only)
Ad Model CPC
Type of structure Marketing Agency
Country Malaysia, Vietnam
Channel Chosen App, Mobile Web
Type of Ads Interstitials, Banners
OS Focus Android, iOS (Vietnam only)
Ad Model CPC, CPI, CPA
Recommendation 1
Recommendation 2

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