Q&A with Asia Media Exchange CEO Basil Chua: We want to be the Alibaba of TV advertising
Basil Chua, a former National Geographic Channel, StarHub and Fox sales executive, is the co-founder and CEO of Asia Media Exchange, the region’s first programmatic TV company that has announced it is to expand to 10 markets within three years.
In this Q&A with Mumbrella Asia editor Robin Hicks, Chua talks about building the ‘Alibaba of TV advertising’, tackling the perception that automated ad buying means low quality, and why viewability, ad fraud and ad blocking won’t be a problem for programmatic TV.
Is it too early for programmatic TV in Asia?
I don’t have a crystal ball. But I do know that I’m in the right space at the right time, for a few reasons.
If you look at the overall TV ad market in Asia, it’s growing modestly with single digits, it’s a mature market. There’s a lot of money in the system, estimated at US$53-US$55 billion, and that includes OTT and online video, which are tiny at the moment – around 5% of total spend.
Audiences are shifting from one medium to another, but fundamentally audiences watch content, they don’t watch not devices.
If TV companies can innovative and continue to cater for audiences as they change viewing habits, great.
But the sale process hasn’t evolved. It’s still very manual. Multi-million dollar deals are over whiskies and expensive dinners. That’s still important. Relationships are important. But when it comes to the media execution, it’s extremely manual and backward. It doesn’t make sense.
In a smaller market, the effect of programmatic is less felt. But a bigger market like China, which is the largest TV sales market in the world with over 7,000 channels, the benefits are clear.
The way media planners work now is that they call up the sales guy, they negotiate over rates, spreadsheets go back and forth, and it takes an eternity to get work done trying to work out the reach frequency curve.
That’s why people work such long hours in media. When plans change, people don’t go home. And you get very stressed, burned out people.
We have spent a lot of time and money trying to innovate this part of the media buying process, and we believe that once we can create a killer app, there will be a lot of uptake in programmatic buying.
But we’re not sure about the supply side. A lot of it is in isolated pockets. So the question is, can we create a platform that is almost like the Alibaba of TV advertising for media owners to list their inventory so that it’s searchable, discoverable and tradable.
I only have one vision. I want buying TV advertising to be as easy as buying a burger online. Why can’t we do that?
The good news is that the TV industry recognises the need to evolve and look at new ways to supplement their current sales efforts [AsiaMX recently signed Discovery, NBCUniversal and Viu to use its exchange]. On the agency side, they’re asking us when we can come to their market and get cracking.
Do agencies and agency trading desks in Southeast Asia know how to trade programmatic TV?
The reality is we’ve been talking to a lot of media agency folks and friends. There is a lot of market education that needs to be done, not only within agency planning teams but among advertisers. When people think about programmatic, they still think of cheap, unsold, low quality inventory. That’s not true – and that’s the biggest hurdle.
TV has always been the cornerstone of agency revenue, and I don’t think we need to persuade anyone why programmatic TV is right. But there’s a lot of handholding to be done to explain how it’s done, and how it differs from traditional buying.
If you were to ask me what is the real difference in a big market like Thailand, for example. If an advertiser was to run a campaign they’d probably pick or two or three channels. But with programmatic it’s a different dimension. Thailand has recently gone from six to 40 TV channels, and we’re seeing a lot of audiences opening up to advertisers that can be reached programmatically.
Is the platform self-serve for agencies?
Right now, the platform can be used in that way [self-service], but we prefer to offer a managed service for now, which we think is right for the market at this time. It’s still a very new service for agencies, with lots of bells and whistles. That said, we’re still developing the features and we’re still learning from the marketplace. To be honest, agencies are constantly pushing the boundaries of what the platform can do. There is big wishlist of what they want it to do.
Do you have sufficient scale in terms of guaranteed inventory?
We are looking to enter markets that are highly fragmented, which is why we picked Thailand early on. In every market we enter, we need to secure at least 50% of the top channels in the country – we have got to give our customers that choice. If I can’t offer the top 50%, it doesn’t make sense, or else I’ll be trading low-end inventory. All our customers want top-end inventory, branded channels, high production values and high quality audiences. That’s what advertisers are looking for. They don’t want questionable content.
What is your target for end of 2017, given you say you have $500 million in inventory value locked in already?
Interesting question. We spoke to one of the VCs, and they asked us to change our company name. Why Asia MX? I said we’re very focused on Asia, as it’s the single biggest marketing block in the world. According to our roadmap, we want to acquire all of Southeast Asia, and later venture to North Asia. China will probably come at the end.
Are you leaving the hardest market till last?
Actually, China is not difficult. Once you understand the market structure it’s not that complicated. That said, China has its own very unique idiosyncrasies that we are still learning how to unravel. This time next year, we should be in China.
What other Asian TV networks are you talking to?
In Thailand we’re pretty much done. We’re going after Indonesian networks now, and we hope to move into the Philippines after that.
How close to real-time is your solution? Is it a true spot-TV buy or will there be a time lag from the time the order is booked, to the delivery of the programmatic TV ad?
It needs to be understood that the limitations on timing are nothing to do with programmatic, they’re a result of the nature of the medium. TV is still heavily regulated. In every country there are unique standards and practices, and every commercial must comply with that country’s advertising code. That is what holds things back. If materials can be pre-approved, you can reduce the amount of booking time through our system. At the moment, we can’t approve an ad in milliseconds, but we can reduce the time from weeks and days down to hours prior to telecast. We work using the concept of advance reservation, very much like how you’d make an airline booking.
What are the challenges in building out a programmatic offering in Asia? Is it mostly economic?
The economic challenge is not a big issue as we have funding. The biggest challenge is dealing with the myriad systems in Asia. Every country has its own booking systems. There is no one common standard. A challenge is creating an API that enables all of the systems to talk to ours.
Will jobs be lost as a result of programmatic TV?
No, I don’t think so. Yes, the technology can create high value at low cost. And what used to be done by a team of 25 can now be done by machines, more efficiently and quickly. But I’ve been dealing with the sales side of the business for a long time. Every advertiser wants a sales solution from a TV company, but they don’t want to deal with spreadsheets. Sales teams need to upgrade to provide total media solutions, not a spot buy. Spot buying should be automated as far as possible.
What about brand safety as an issue for programmatic TV advertisers, and the wrong ad popping up in the wrong place at the wrong time?
We are not an exchange for every website and every TV company. We are only interested in bone fide TV networks that crank out great programming and are able to deliver through broadcast, OTT or mobile. They will need our solution, as we’re able to bring them all together and provide a common environment and common platform for buying audiences. With God’s grace, we will be spared from such issues as viewability, ad fraud and ad blocking. We are being very careful in the inventory we take on. We have started premium and that is how we are going to stay. We are not a mass market exchange. We are very niche and very targeted.
When will you be profitable?
We have to work with profitability in mind from day one. We are still building the product, talking to buyers, and trying to get the industry to come together. It’s like the early days of Alibaba, trying to get customers to come together and build a marketplace.