Yello Digital Marketing Group (YDM), a South Korean digital marketing firm, is now the majority shareholder in Bangkok-based social media analytics firm Computerlogy, after acquiring a stake for undisclosed terms.
The acquisition will see Computerlogy collaborate with YDM to develop a research & development centre. Commenting on the development, Computerlogy CEO and co-founder Vachara Aemavat said, “Due to rapid change in advertising technology, it is challenging to develop products and services that can readily serve customers’ needs in the market.”
According to YDM’s website, it is a subsidiary of Yello Mobile Group, which provides everything from creative digital marketing strategy to mobile ad network platform as well as viral and SNS marketing platform. Yello Mobile is a South Korean mobile media group with more than 70 companies specialising in five major business sectors: shopping, media & content, advertising & digital marketing, travel and online-to-offline (O2O) services.
Founded in 2012, Yello Mobile has 74 apps in its portfolio and acquired 61 companies in 2014. Multiple apps in its portfolio have crossed the 10 million download threshold with the most recent being the social media curation platform Pikicast in July.
According to Yello Mobile’s website, it has over 2000 employees and claims more than 24 million monthly service users. Its subsidiary YDM currently holds strong alliances with 22 entrepreneur-driven companies throughout Southeast Asia, including Singapore, Indonesia, Thailand and Vietnam, with over 1700 employees providing services to more than 5000 clients. .
Computerlogy, which won the Facebook Developer World Hack competition in 2012, was one of the first Thai firms to receive the Facebook Marketing Partner badge in Southeast Asia.
Digital developments in APAC
According to PWC research, recent acquisitions by YDM have occurred in a business environment where the total entertainment and media spending on digital – excluding spend on Internet access – is likely to grow globally at a 12.2 per cent compound annual growth rate (CAGR) (between 2013 and 2018) and account for 65 per cent of global entertainment and media spending growth.
By 2018, digital advertising is projected to account for 33 per cent of total advertising revenue globally, compared to 17 per cent of consumer revenue. However, monetising this will require a paradigm shift in both business behaviour and a digital-centric business strategy, in addition to deploying the appropriate technological tools.
Global mobile Internet penetration is predicted to reach 55 per cent in 2018, with a corresponding increase in digital advertising’s growth from 14 per cent of total advertising revenue in 2009 to 33 percent by 2018.
With Internet advertising growing at a 10.7 per cent CAGR (compared to a total advertising CAGR of 4.4 per cent), the industry is approaching a significant tipping point, where Internet advertising will be poised to overtake TV advertising by 2018.
For instance, in 2009 TV advertising’s market capitalisation was double that of Internet advertising. By 2018, Internet advertising will be worth only $20 billion less than the TV advertising market. In particular, mobile Internet advertising will see significant gains, with a CAGR of 21.5 per cent forecast.
Nine high-growth markets are powering global entertainment and media revenue: China, Brazil, Russia, India, Mexico, South Africa, Turkey, Argentina and Indonesia. Their collective growth has been forecast as 21.7 per cent of global entertainment and media revenue in 2018, an increase from 12.4 per cent in 2009.
2018 will also see China overtake Japan as the world’s second-largest entertainment and media market, next to the US. Greg Unsworth, Technology, Media and Telecommunications (TMT) Industry Leader with PwC Singapore observed: “What all these markets have in common is a growing middle class boosting spending in entertainment and media. But the similarities stop here.”
He added, “Realising the revenue potential of these markets demands a deep understanding of the local context and appropriate market segmentation. Differing local tastes, pricing expectations, and the predominant delivery platforms will ultimately determine what entertainment and media content consumers in each market will be willing to pay for.”
This business consolidation with YDM will position it as one of the market leaders in Southeast Asia’s growing marketing solution sector. Founded in 2009, the firm uses tools like SocialEnable and TH3RE to help brands target their social media marketing by using Big Data analytics to provide them with consumer insights.
The motivation behind YDM’s acquisition appears to be its desire to accelerate Computerlogy into a market leadership position, with its acquisitive behaviour something a trend reflected in its current portfolio of 22 companies. Currently it has extensive holdings in Southeast Asia, across Indonesia, Vietnam, Thailand and Singapore.
Insofar as it grants access to the Thai market, it’s also a strategic acquisition that will add to the market intelligence capabilities of YDM as a whole, and one that it can leverage upon to improve its offerings, as well as explore the possibility of building a business intelligence marketplace or acting as a data vendor for data brokerages like DatastreamX.
Among them are influencer marketing firm Gushcloud in Singapore and marketing & advertising firms Adplus and Mediatrac in Indonesia. The addition of Computerlogy to its portfolio also complements its acquisition of Thai digital marketing firm Adyim.
With the need for localisation to access the consumers present in the market, YDM’s strategy seems to be focused on acquiring major stakes in companies with intimate local market knowledge. These domestic firms are thus positioned to realise the opportunities presented by the emerging middle class in countries like Indonesia and Vietnam.
For a super-regional firm like YDM, which operates across East Asia and Southeast Asia, this strategy represents the optimal approach, as well as collaboration with local partners.
A growing middle class may be a phenomenon globally, but market access to opportunities remains localised. The acquisition will likely see YDM also bring new products from other market into the Thai marketplace in a drive to improve offerings.
In an official statement, Sang Seok Lee, CEO of YDM, said, “With the joining of Computerlogy, YDM Group will solidify its data analysis capability and lead social media advertising market in Asia through synergies among family companies.”