Fresh Off Its $100M Round, Yeahmobi CEO Talks About China’s Role in the Global App Economy
China is playing an increasingly major role in the global app economy. It is now the largest revenue generator in Apple’s App Store. It is projected to generate over $20 billion in mobile ad spend in 2016 and more than double that in 2018!
It is therefore no surprise that more and more apps are taking their business to China, despite the challenges (localization, government bureaucracy, Android app store fragmentation, to name a few). With their know-how, Chinese apps and media companies are also spreading their wings across the globe. One such company is mobile performance marketing network Yeahmobi, which recently raised a massive $100 million round.
In this edition of A View From Above: Conversations With CEOs, we spoke with Yeahmobi’s CEO & Founder Peter Zou about the Chinese market, global mobile advertising trends and what the company will do with its new funding.
AppsFlyer: Congratulations on your impressive $100m round! How will the company use the funds? In which areas will you be investing in?
Peter Zou: Thanks. We plan to use the funds as working capital needed in the mobile advertising business, in subsidiary companies and branches, as well as for a reserve fund for the company’s M&A efforts of consolidating global digital media assets. As part of our global aspirations, we plan on leveraging the favorable capital market conditions in our home market of China to pursue global growth opportunities.
Unlike the NASDAQ, high-quality listed companies with digital media concepts are limited in number in the Chinese capital market. They are able to command premium valuations compared to their overseas counterparts. For example, the A share listed mobile advertising companies can be trading at a price to earn a multiple of 50x, compared to 10x of US-listed peers. Investors’ willingness to pay for the growth enabled by overseas acquisition and the potential valuation multiple arbitrage also drives an increasingly high number of listed companies to pursue profitable digital media assets globally. As the leading global mobile advertising company headquartered in China, Yeahmobi is ideally positioned to capitalize in such a market.
The main purpose of the M&A will be to upgrade the technology and to build presence in certain markets of the company that complement our existing reach. Additionally, the move perfectly positions Yeahmobi to execute our M&A efforts of consolidating high-quality global digital assets.
What are your clients’ top 3 challenges?
The first challenge we see from our clients is the increasingly expensive price of traffic, leading to some advertisers struggling with balancing volume and ROI. This requires them to have a smarter marketing strategy. Second, insufficient accuracy in targeting and lack of abundant ad formats are problems most advertisers talk about. The third challenge is the lack of transparency and direct control of traffic, which also requires more development of third party tracking tools.
How do you differentiate yourself in a highly crowded media space?
Yes, the market is very crowded, but we think Yeahmobi is different with our vision, our customer-focused service and our leverage on capital. Our vision is to “Flatten the world with technology”. That means we build a bridge to connect Chinese advertisers with the international market and international advertisers with the Chinese market. We have been recognized as one of the best globalization partners in the domestic market, helping many leading Chinese internet companies go overseas.
One of Yeahmobi’s core company values is being customer oriented. Our entire team is very much customer-driven. We aim to provide the best service to our customers with our well built technology and platform. Also, we are focused on the development of technology and product to provide additional value to our customers. Thirdly, as we could leverage the funds in our home market, we could use the money to upgrade our technology much faster than other players in the market.
Overall, Yeahmobi has four arms: Mobile Affiliate Network, Media Buyer, global game publisher, and app developer. Why is the business structured in this way, and how do these services fit together?
Actually, our core business – mobile advertising and monetization is structured with four arms including Mobile Affiliate Network, Media Buyer, SSP and self-serve DSP. For advertisers, we provide performance-driven solutions through our Mobile Affiliate Network, Media Buyer and SSP arms, which cover multiple types of traffic: premium and long tail traffic; in-app, search & social traffic; bundle and programmatic media buy traffic. For developers, we provide monetization solutions with our SSP platform. And for affiliates, we provide the programmatic media buying solution via our self-serve DSP and also provide the monetization solution via our Mobile Affiliate Network. So overall we provide an end-to-end advertising and monetization solution to all our partners including advertisers, agencies, developers and affiliates.
Other than the mobile advertising and monetization product, Yeahmobi also aims to offer a vertical based solution for e-commerce and gaming. For the former, we have recently released our retargeting solution YeahTargeter; for the latter, we specialize in offering a complete solution for international games entering into China.
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?
I think more transparency will definitely be driven mainly by buyers. But as the media market is extremely crowded and competitive, some media companies will play transparency as their key selling point, which will also drive the market to be more transparent. So overall, I think the ecosystem will become a lot more transparent in the near future.
What do think about the dominance of Facebook and Google in the mobile ad space?
I think the dominance of Facebook and Google in the mobile ad space is still growing, which means I believe they will only become more dominant in a few years. But the good news is that the overall mobile ad space is still growing and the rest of the market is still big enough for other media companies to play in. Even if you take a small share of the market, there is still room for other successful and sizable media companies. Besides, there is always long tail inventory available, which could meet some of the advertisers’ needs.
What do you think of the role unbiased third party measurement is playing in the mobile ecosystem? How do you see the attribution space shaping up in 2017?
There is no doubt that third party measurement is playing a very significant role in the mobile ecosystem, as it is positioned between the demand side and supply side, providing transparency and helping both advertisers and partners to optimize their marketing strategy. I believe the attribution space is already quite shaped up. Having said that, I also think that the measurement tool that would provide more transparency and give more advice on how to optimize marketing spend will win more market.
In your opinion, what are the top 3 mobile marketing trends that will shape 2017?
First, I believe more and more marketing budgets will be spent on mobile, which was the trend for the last few years and will also continue; second, I think the new interactive ads will become popular on mobile in 2017, as both the technology and demand are ready; third, the market will get more and more transparent, as mentioned earlier. Transparency is not only the desire of buyers, it will also make the ecosystem healthier, and with the increase in customer demands, media companies and publishers will put more efforts to meet such these demands.