Google can’t gain market entry, but in a major coup for Authorised Investment Fund (ASX: AIY), the pooled development fund has gained access to the lucrative Chinese programmatic advertising market.
Authorised Investment Fund told shareholders that one of its investee companies, Asian Integrated Media (AIM), has now broken into the Chinese market after successfully launching bespoke programmatic digital advertising company Travel Elite in the East Asian country.
The Chinese launch comes in the wake of AIM recently striking a deal with Ambient Digital Group to form a joint venture offering its digital planning and buying to advertisers throughout South East Asia.
With the Ambient and AIM tie-up complete, the launch of Travel Elite China now permits access to the lucrative China travel market by utilising programmatic advertising channels, including the mobile dominant China market such as: Weibo, Baidu, Tencent, JD and Toutiao.
Programmatic advertising is a term used in digital marketing to describe computer-based automated buying, selling, placement, and optimisation of digital advertising.
In contrast to traditional advertising, programmatic ad buying involves the use of artificial intelligence and algorithm software technology to purchase digital ads.
Travel Elite’s launch into China will give Authorised Investment Fund a direct foothold into the Chinese market via its 25% stake in AIM.
Travel market booming
Travel Elite, which only targets travellers, permits brands to advertise directly to people that have planned and booked trips to specific destinations, enabling brands to select travel class and destination and run digital advertising in relevant sites through a programmatic operation.
Travel Elite China is now poised to tap into the massive outbound travel market from China.
According to AIM, China was the world’s top spender in outbound tourism in 2017 accounting for US$258 billion, while the second biggest market was in the United States, which spent US$135 billion.
To date, the early response to Travel Elite China has been “phenomenal.”
“Within hours of launching Travel Elite China to a handful of our clients, we received requests for campaign proposals well in excess of US$2 million,” AIM chief executive officer and founder Peter Jeffery said.
“At this pace, we are set for astonishing returns which will ensure considerable additional revenues building substantial and solid capital growth for both Ambient, AIM and its shareholders.”
In highlighting the significant of the Chinese launch, AIM noted that digital programmatic spending in China was expected to reach a whopping US$22.8 billion in 2018.
Importantly, AIM has full access to all the major trading platforms, including standard programmatic and mobile, which will enable brands full access to the lucrative travel audience in this market.
Meanwhile, Authorised Investment Fund believes this opportunity is significant due to China’s unique digital media landscape, with major conglomerates such as Google, unable to operate in China.
Additionally, a lot of western companies find it difficult or impossible to trade in China, giving AIM and Ambient a monopoly in China’s lucrative digital advertising market.
Commenting on the launch, Authorised Investment Fund chairman Ben Genser said the programmatic powerhouse that Ambient and AIM have launched speaks to the huge economic might of China.
“Ambient and AIM were previously only able to use the Travel Elite platform across southeast Asia and the rest of the world, but not including China,” Mr Genser told Small Caps.
“The market is spending anywhere between US$70-$80 billion a year on programmatic media campaigns, and now the inclusion of China adds an additional US$22.8 billion worth of programmatic spend recorded in the last year alone.
“What this [Travel Elite China] will do for marketing, media and advertising is comparable to what Alibaba and Amazon have done for ecommerce.”