We’re excited to launch our prestigious blog series A View From Above: Conversations With CEOs, featuring interviews with CEOs across the mobile marketing ecosystem. Our first guest is the CEO of Avazu Inc. Mr. Yi Shi. The company is a Chinese-based multinational corporation in the digital marketing industry, specializing in cross-device advertising and mobile game publishing.
Mr. Shi discusses his company’s global expansion strategy, tips for companies that seek to make it on a global stage, and his take on key industry trends and challenges facing app marketers.
AppsFlyer: What do you think of the Chinese globalization boom?
Shi Yi: Due to the sheer size of its market, China offers huge opportunities for local internet companies to grow, and numerous ones have indeed been growing into giants in the past several years. In a reverse trend, we have also been experiencing a drop in internet population growth due the decline in China’s GDP growth. As a result, there is a lower “internet dividend” for most Chinese companies, leading Chinese companies to try to make it on the global market.
How do you rate Chinese companies’ efforts to go global?
Many Chinese Internet firms have stepped into the global market in 2016. Some experienced success in overseas markets (i.e. Cheetah Mobile, SHAREit and Flash Keyboard), but most have not.
I believe there are four key principles that Chinese companies should adhere to when going global:
1) Minimalism: Westerners prefer minimalism than sophistication. When it comes to successful apps, you will find that most of these are designed with simplified art.
2) Diversified channels: Successful apps will definitely run campaigns on multiple channels, and ultimately choose the best ones with the highest collection of premium traffic.
3) Localization: Every app should follow the “fully localize” principle. However, “fully localize” does not just mean translation. Therefore, developers should think more about the language locale, such as display style, culture, religion, politics, etc.
4) Timely Adjustment of Data Analysis: Different channels should match different products. Hence, the promoting strategy should also be adapted to real-time data analysis.
What suggestions do you have for companies just starting to develop overseas?
It’s crucial for all companies pursuing a globalization strategy to fully localize. For example, At Avazu Holding, we began opening local offices three years ago and have so far done so in seven locations globally. A rapid reaction towards local market needs and trends is only possible with a local presence and an in-depth understanding of the local market.
It is no doubt that language is the most important factor of a proper localization strategy. Multiple languages will definitely help users to understand and use products, and moreover, also improve conversation and retention rates. Frankly speaking, a sub-par translation of Chinese into English is not good enough when developing products for overseas markets. And even if the translation is accurate, as I’ve stated above, it’s not just the actual translation, but also the display style, culture, religion, politics, etc. that have to be taken into account.
From a macro perspective, different countries that speak different languages will have different cultural features (such as England & France). And different countries who speak the same language can also exhibit different cultural traits (such as the US & UK). As a result, a key factor for an overseas operation is to master common rules and operating based on local conditions. That is why most Chinese overseas apps are from the tools category.
What is your globalization strategy?
I began to rethink of our development in 2013. The pace of our firm’s development was not that fast. In addition, an advertising business on its own cannot support an internet giant. As a result, in order to keep abreast we formed Avazu Inc. (Advertising), aFund (investment), Teebik (Publishing) and DotC United (Product) were founded in 2014, helping Avazu Holding achieve our goal: how to be another BAT (Baidu, Alibaba and Tencent – the three Chinese Internet giants) in the CTW (China to the World) domain. All our decisions (either related to business or capital) were made to realize this one goal.
What do you think is the biggest challenge of user acquisition today?
Fraud detection and LTV prediction are still the biggest challenges for most companies today. While there are more and more players getting into the fraud detection field, LTV prediction is still an untapped market, and sophisticated buyers have to build their own solutions to tackle this challenge.
Do you see a shift from CPI to CPA?
Right now we see huge demand for CPI inventories. CPA is increasing but it’s still not really comparable with CPI.
From my perspective, the quality of mobile inventory will lead the industry. We see mobile ads performing 2-3 times better than PC ads in parameters such as likeability, recommendations and purchase intent. It is these factors that make advertisers pay more attention to mobile in-app inventory.
As a company that focuses on programmatic, how do you tackle fraud?
We build our own solutions based on certain rule-based patterns and machine learning algorithms. We also have an internal anti-spam team to focus on this issue. And to avoid being reverse engineered, we always keep our anti-fraud methodologies confidentially in a black box.
Do you think media companies can lead to a more transparent ecosystem or will it be up to the buyers who will make this happen?
Transparency is cutting into the margins of most media companies, so there won’t be any incentives for media companies to work on transparency. However, I think platform companies (DSPs, SSPs, and Ad Exchanges) and big buyers (incl. agencies) will transform the ecosystem towards more transparency.
What do you think of the role unbiased third party tracking is playing in the mobile ecosystem?
Unbiased 3rd party tracking is an essential function in the ecosystem to unify different tracking, attribution and analytics standards. And as the nature of this market is winner-takes-all, I do believe there could be one single dominant player coming out over the next few years to tackle those challenges.
What are the top 3 trends that will shape the mobile space in the coming 1-2 years?
The top 3 trends we are seeing now are native, video and programmatic. Native ads have existed for a long time, but with the release of native ad products from Facebook and Google, the market is experiencing another renaissance. Video ads are especially interesting to attract more branding budgets shifting from traditional media to mobile. Programmatic is a big topic both on PC and mobile because it offers many opportunities in terms of feasibility for scale and efficiency improvements during the ad buying process.