SYDNEY: Japanese internet advertising company Digital Advertising
Consortium (DAC) is pouring A$500,000 (US$259,310) in
Australia's BMCMedia, which has reduced regional operations.
The Australian online advertising company had earlier closed its
Singapore and Beijing offices and downsized its Hong Kong operations as
part of a broader cost-cutting measure. In all, it cut 36 positions
globally.
The workforce in Hong Kong has gone from 10 to two, while the Singapore
and Beijing offices have about five staff each after the
redundancies.
The two companies had partnered earlier this year, allowing BMC Media to
handle Australian online advertising for DAC's Japanese clients and its
clients' online marketing into Japan.
DAC is owned by a consortium of Japanese advertising agencies, which
include Nikkeisha, Daiko Advertising, Hakuhodo, Asatsu-DK, I&S/BBDO and
Yomiko Advertising.
BMC Media had also made cut backs in Australia but the Tokyo operation
has been spared because it recently signed a lucrative contract with
local agencies, including Hakuhodo, for online marketing.
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 firm plans to use the money to acquire businesses that are
profitable or close to breaking even on cash flow.
BMC Media also wants to take on tasks - database management and some
email marketing work - which it previously outsourced.
The company is keen to drive further consolidation in the online ad
market by acquiring competitors. The number of online ad companies has
dropped dramatically this year, with Real Media and DoubleClick
withdrawing from Australia and Engage quitting its Asian operations.
