Wearables, recommendation engines will displace display advertising: Shapira, MassiveImpact CEO

Sephi Shapira, CEO of MassiveImpact

Singtel has been growing its enterprise base significantly, with acquisition of digital marketing firm MassiveImpact and US cybersecurity corporation Trustwave earlier this year.

Industry watchers noted that Singtel’s pattern of acquisitions and strategic partnerships are aimed at enabling it to offer more services to its enterprise customers, such as new bundled solutions.

Digital marketing was among the highest ranked areas of marketing technology investment for 2015 and 20 per cent of marketers surveyed by Gartner placed digital commerce at the top of their agenda, with digital advertising expected to surge in in the Asia Pacific (APAC).

DEALSTREETASIA reached out to Sephi Shapira, CEO of MassiveImpact, to find out how the firm has progressed, following the acquisition of a majority stake in MassiveImpact by Singtel’s venture capital arm, Singtel Innov8, earlier this year.

Edited excerpts:

What led you to found MassiveImpact and what were the initial changes you faced in acquiring the talent and building your business case?

I was the CEO of Interchan, a direct to consumer mobile content company operating in Southeast Asia. We had a huge database of users and a direct marketing channel, but the data was contextual so we did not know how to use it to target users with over 100 products. I saw this as a new business opportunity and began my journey to develop a performance targeting algorithm. This lead to the founding of MassiveImpact.

How has your background, as an Israeli with extensive experience living in East Asia, specifically Taiwan, shaped your approach to business?

Growing up in Asia had a huge impact on my approach to business. For example, I learned to leverage the highly organised working style of the Taiwanese to create a streamlined business that was easy to scale.

In my opinion, Israel is strong in innovation, but its people are not as strong when it comes to being organized and process driven. Using the strength of each culture makes the company stronger and allows me to leverage the strengths of both countries to my advantage.

With Singtel‘s acquisition of a majority stake in MassiveImpact, what has been the impact on the operations of your company and have there been changes to your business operating system and corporate culture?

Singtel has been a great partner to MassiveImpact. The talent of the team, the brand and their regional reach has helped us in almost every aspect of the business. Working with a large company like Singtel helped our corporate culture to become more organized and streamlined as well.

What are the major challenges of contemporary digital marketing, in relation to MassiveImpact’s own work? How has the industry evolved since you launched the company?

The industry has become much more focused on performance advertising in the past 3 years. This is especially true as advertisers seek more detailed performance metrics and are no longer satisfied to pay for clicks or impressions.

The industry has also become much more competitive with many players joining, specifically with Facebook dominating the field of display advertising. The evolution of Chinese advertisers and their global reach has been a core driving force in the growth of MassiveImpact.

Business 2 Community in a recent report stated that Internet-connected wearable, virtual reality and Bluetooth-based beacons would be the future of mobile advertising. What’s your take on the role of these technologies in mobile advertising?

My view is that wearable devices, coupled with highly effective recommendation technology, will replace the current model of display advertising. Here’s why; the adoption rate of devices is increasing exponentially so within the next few years, new devices will reach mass-market share within a few quarters.

One case in point is the adoption of highly effective recommendation technologies, like Uber, which basically provides the best service possible with a single click and doesn’t ask you for any information. Uber, in many ways, is a lead generation company that is based on an evolution of a mobile advertising model.

Additionally, the billions being invested in augmented reality technologies will eventually lead to recommendations being on top of the real world, not as separate distracting ads inside content. In fact, I believe the whole concept of in content advertising will not live far past the end of this decade.

Also Read: Singtel Innov8-backed launcher for Android devices Everything.me ceases operations

SG Dealbook: Singtel-backed MassiveImpact bullish on China growth; MAS plans infrastructure debt initiative

Given the growing centrality of digital marketing to SMEs in the MENA region, what are the challenges in getting an older generation of SME business owners to adopt and implement digital marketing and mobile advertising solutions? Many Asian ventures are still owned and managed by baby boomers who may not understand the impact of such technology or its relevance to their business.

The consumer market is educating business owners on its own. If you do not partake in the digital marketing revolution, you lose market share and, in the long run, cannot compete. Every industry from transportation, entertainment, hospitality etc. is seeing a shift in the market.

What’s your comment on telco’s like EE in the UK considering the blocking of advertisements, and the reaction of the mobile advertising industry should such a development occur? How would MassiveImpact respond to such an action?

There is no way for anyone to block native advertising which is embedded into the service or application in such a way that it cannot be differentiated from the service’s own content. The vast majority of ad revenues (over 85%) come from native advertising, including search and social media advertising. Bottom line, ad blocking will have little to no impact on the industry.

How do you address the challenge of delivering relevant content to customers, given that Asian consumers are still experiencing irrelevant advertising content being delivered to them?

These challenges are being addresses by more advanced ad integration into publishers’ inventory and pushing them in the direction of highly relevant native ads. All the major players including Google, Facebook, and Twitter now offer these advanced technologies.

How does MassiveImpact balance issues of user privacy and data collection? How will the industry address this as wearables (e.g. Fitbit) and the Internet of Things (IoT) builds traction and opens new channels for digital advertising?

MassiveImpact is 100% focused on performance advertising. A huge advantage of the model is that the platform does not need to understand the meaning of the data – only correlate it with specific predefined results.

Unlike with impression or click-based models, where the brand is buying specific users with specific profiles, in the performance advertising model, the advertising does not care about user profile, only about return on investment. This is why, in the long run, performance advertising is both more effective and ensures higher privacy.

With timing being crucial to the success of mobile advertising, how does a digital advertising firm account for the variances in culture across different markets and seasons?

As discussed above when the business model is based on sales and conversion, it highly simplifies the optimisation model. No longer does human intuition take precedent, because empirical sampling or different ads in different markets quickly show what is the best fit for the local consumers. MassiveImpact runs global campaigns that run in every country in the world while optimizing in real time per each user the offer that best fits his preferences.

Also Read:

Marketing tech & finance are future growth verticals for ASEAN: Gianotten

Philippines: Globe Telecom unit AdSpark acquires social marketing firm Socialytics

Singapore: Singtel, GrabTaxi in pact to promote use of mobile wallet on ride-hailing app

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.