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DoubleClick to establish larger presence in China
By Xiao Huo (China Business Weekly)
Updated: 2004-04-20 09:57
The NASDAQ-listed online advertisement tool provider DoubleClick is to expand
its China presence by establishing a branch office in Guangzhou, capital of
South China's Guangdong Province.
The move is another step by the New York-based company to enhance its leading
position in China in the arena, following the establishment of a branch in
Shanghai, China's business hub, earlier this year.
The new branch (in Guangzhou) is still in the preparation stages and will
debut in the second or the third quarter, said David Rosenblatt, president of
DoubleClick, in a recent joint interview with China Business Weekly and China
Business Times.
Along with the Beijing and Shanghai offices, the Guangzhou branch will target
to explore the increasing opportunities in developed regions in China.
But senior officials with the company said they will leave their Chinese
headquarters in Beijing, where the company established its first China branch in
1997.
"We think marketing investment on the Internet is growing very rapidly in
China, with percentage of the population using Internet here growing extremely
rapidly," said Rosenblatt, when explaining reasons why the firm is to strengthen
its penetration in the booming Chinese market.
"We have a tremendous number of Chinese clients, and more and more
multinational companies are moving to China,"said Ralf Hirt, managing director
of DoubleClick's Asia-Pacific Region.
The company served 203.8 billion advertisements in the fourth quarter of
2003, 43.3 per cent more advertisements in than in the same quarter 2002.
The company has a whole range of clients in China, including Internet
companies like Shanghai Online and Netease, and traditional advertisement
companies.
The company also plans to introduce some of its 15 products used currently
abroad--such as e-mail marketing and website monitoring tools into China in the
coming one to two years.
As head of a global company that are already profit-taking, Rosenblatt
declined to clarify whether it the company was already in the black in China,
saying the company did not discuss profits in any one country.
"We would not invest in China if we were not optimistic about our ability to
be profitable over the long term here," said Rosenblatt.
Launched in 1998, the company's China operations' contribution to its global
portfolio is still relatively small at less than 5 per cent.
"We think in the long run, China will be a significant part of the Internet,
and will be 20-25 per cent of the Internet economy," said Rosenblatt.
The company now has a staff of 200 in the Asia Pacific region, among which
China is viewed as one of the key market segments and all the staff in China are
local employees, said Hirt.
DoubleClick develops the tools that advertisers, direct marketers and web
publishers use to plan, execute and analyze marketing programmes.
With a complete suite of integrated applications, these technologies have
become leading tools to form campaign management, online advertising and e-mail
delivery, offline database marketing and marketing analytics.
A report released recently said that online advertising is on the track to
rebound and there is the particularly strong holiday season among online
retailers who use online advertisements to drive traffic to their stores.
The DoubleClick Q4 2003 ad serving trend report is based on over 1.3 trillion
advertisements globally from thousands of clients in America, Europe, Middle
East, Africa and Asia Pacific.
It said that rich media continued to grow dramatically as a per cent of total
volume from previous quarters.
"What drives our growth is the increase in marketing spending," said
Rosenblatt.
Following some tough times in 2001 and 2002, the company had four consecutive
profitable quarters in 2003, and DoubleClick attained its highest-ever gross
margins for the fourth quarter and full year at 67 per cent and 65 per cent
respectively.
"Our profitability came from strong results across the board," said the
company's annual report.
The positive industry developments combined with increased
confidence from our existing customers and a strong pipeline
of new clients made us secure enough to raise our financial outlook at the
end of January, said the company.
"We expect to see a significant increase in overall revenues, with growth
coming from both segments and from all product groups," said the
company.
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