Close to his one-year anniversary as Hong Kong CEO at IPG Mediabrands, Kasper Aakerlund shares his initial 'market shock' when he first came on board last July after 27 months at GroupM, where he was COO for Vietnam and Indonesia. During his tenure there he was involved in designing and launching the company's digital performance unit GroupM Connect Vietnam (search, social and programmatic), considered a sister entity to Xaxis.
Could you recap your early days at IPG after doing your first few rounds of meeting Hong Kong advertisers and publishers?
I see opportunity with programmatic buying in Hong Kong, for sure. We, as an industry, haven’t been good enough to explain to advertisers about the advances of programmatic. That’s the reason why we are investing so heavily in programmatic here, because I see blue-ocean opportunity for our clients that I want to let them tap into.
Brand-safety technology is developing right now and making it possible for us to only enter a pre-bid auction if anti-fraud tools show no traces of a fraudulent impression or site.
These tools put mechanisms in place which were not possible before. And that’s why I’m surprised that brand safety is being shot at as the reason why we shouldn't buy programmatically.
Brand safety has always been a challenge but I don’t believe that not buying programmatically is going to help. I most definitely believe it’s the opposite.
In digital, everything can be bought programmatically and is measurable, so buying manually is sometimes creating more risks.
You mentioned Hong Kong is a tougher sell for programmatic, compared with Vietnam? Why hasn’t programmatic buying become mainstream in Hong Kong?
What I experienced in Vietnam is that marketers there went into programmatic totally—the other way round of Hong Kong—saying they’re not going to buy a single digital impression that is not being bought programmatically.
From a market perspective, Ho Chi Minh is seen as attractive for many investors, and is one of the best startup cities in the world. And this is the reason for the market being much more risk-taking and passionate to innovate than others.
Vietnam is the only place in the world where I have seen a tech company building up a browser nearly overnight and gaining 20 million users in one year with minimum investment. And of course, they are taking advantage of the lack of investment from the big global technology companies in that market.
Companies like that are very much consumer-centric and focus on things that are bringing value to the users. Their higher levels of risk appetite and passion for innovation led to nearly all the big publishers in Vietnam investing a lot in technology and enabling their inventory for programmatic buying.
What can Hong Kong publishers learn from Vietnamese media then?
I have to be careful what I’m saying right now, but in Hong Kong when I'm looking at media platforms and publishers here I find there are opportunities to improve. One of the things that we as an agency are trying to do is to be proactive with the publishers here. A lot of positive development has happened in the programmatic space for us the last couple of months.
What we [GroupM] did back in Vietnam was very much about having conversations with local publishers to meet advertiser demands to buy impressions in a more modern way, because we need to have a higher return on every single investment we’re making in advertising.
I feel that many Hong Kong publishers are beginning to see the need to 'make it programmatic', or else the adspend will just disappear. The sad thing for local publishers is that the adspend will often go to foreign companies [in this case]. They could be Google or Facebook that will take a bigger and bigger part of the whole advertising spend.
It will be easier if Hong Kong has some really big advertisers coming out and saying to publishers 'no, we’re only going to buy inventory from you that is programmatically enabled'; that’s going to push the market for sure.
We do not have 91 million people [the population of Vietnam] in Hong Kong, which of course is a different scale when it comes to impressions. But it is even more important that each impression that Hong Kong advertisers deliver is delivered to the right audience.
I cannot say that Hong Kong publishers are not doing enough; I can only say that there are still some publishers that have not created very strong programmatic strategies. For me, a programmatic strategy doesn’t mean that you just make your inventory available for Google, as an example. That means that you have a strategy to sell your inventory to a more advanced segment, create private marketplaces with different advertisers, and allow different measurement and fraud-detection tools.
According to some forecasts from our Magna Fall 2016 update [see below], small emerging markets like Vietnam, Indonesia and the Philippines, are expected to have programmatic adspend growth of more than 50 percent through 2020. Hong Kong is tipped to have even higher CAGR [compound annual growth rate] growth potential than Vietnam in the next four years, and that tells a story.
This Q&A has been edited for clarity and brevity.