MEDIA-I: AdSociety overhauls model as slump hits

HONG KONG: Pacific Century CyberWorks' online advertising company, AdSociety, has restructured its business model to offer offline advertising services and is looking to partner with Hong Kong tycoon Li Ka Shing's Tom.com in mainland China. Patrick Jonathan Wong, AdSociety's chief executive officer, said the restructuring was prompted by the downturn in online advertising. He pointed to local portals Tom.com and hongkong. com's moves to integrate their media offering with the purchase of other types of media. "In January, we realised that depending on the internet alone was not viable. We knew we had to merge the online and offline services, along the lines of what Tom.com is doing aggressively in China. We realised that they were going the right way," Wong said. "Then there's hongkong. com, which also bought into traditional print. To generate revenue, the way forward is integrated media, bringing together online with print, television, event management, outdoor and radio. "Companies that offer just advertising are in trouble today. They can either increase efficiency or cut costs. We want to offer advertisers a link." AdSociety's joint-venture in China, AdSociety Daye, was recently granted full advertising agency licence in China, allowing it to offer services from creative development to syndication of content and brokerage of ad space. It will also offer online and wireless advertising. Tom.com also restructured its business earlier this year. Since then it has ventured far from its original internet model into areas such as sports promotions, print magazines and outdoor media. "We really don't see Tom.com as a competitor because Tom.com is a media owner and is basically selling billboards in China. However, as a media rep, we could work together with Tom.com." Wong said the company has been in contact with Tom.com chief executive officer Sing Wan to find a way of working together. He added: "There are no integrated media brokers in China. AdSociety can offer a range of media, and we think others are likely to follow this." He said AdSociety had spent US$10 million since its launch 13 months ago. "We've been able to get through in Asia with joint-ventures. If the market continues as expected, we will break even by the end of next year, earlier if the market picks up. We're not controlled by a parent company and we can change quickly to the market because we are not listed and don't need to answer to shareholders." However, the planned change will not extend to the company's image or name. "The name AdSociety was created because I was thinking of creating a club or society to pull together advertising people, from media owners to reps," Wong said. - See analyis, p16.

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