SINGAPORE: BMC Media has closed its Singapore and Beijing offices
and downsized its Hong Kong operations as part of broader cost-cutting
measures that have led to 36 job losses in the company globally.
The workforce in Hong Kong has fallen from around 10 to two, while the
Singapore and Beijing offices each have around five staff. There were
also staff cutbacks in Australia but the Tokyo operation has been spared
because it recently signed a lucrative contract with local agencies,
including Hakuhodo, for online marketing campaigns.
A spokesman for BMC Media said maintaining a presence in Hong Kong was
crucial to the company's progress in China, in particular because
Beijing would be hosting the 2008 Olympics. BMC Media had earlier sold
ad space on websites set up for the Sydney Olympics.
The Australian-based firm, which competes against DoubleClick, made the
cutbacks to reduce its cash burn rate and preserve cash reserves of
A$7.4 million (US$3.6 million). The online ad firm plans
to use this money to acquire businesses that are profitable or close to
cash flow break-even, explained BMC Media chairman, Nick Greiner.
The cost-cutting will reduce monthly overheads by 62 per cent he
said.
Any future acquisitions will aim to reposition BMC Media as a full
service digital marketing firm, Greiner added.
BMC Media also wants to take on tasks - database management and some
email marketing work - which it previously outsourced.
The company is also keen to drive further consolidation in the online ad
market by acquiring competitors. The number of online advertising rep
companies has fallen dramatically this year, with Real Media and
DoubleClick withdrawing from Australia and Engage quitting its Asian
operations. BMC Media's share price has plummeted in recent times from a
high of A$7.60 early last year to A4.5 cents (US2.2 cents) last
week.
