With a media background at McCann Erickson and venture financing raised this past April from Redpoint Ventures and WPP Digital among others, Miaozhen Systems CEO Wei Zhu sounds like your typical “Western” entrepreneur.
Calling his 310-person firm “the Nielsen of China,” Zhu claims Beijing-based Miaozhen already has 80% market share for online measurement – with DoubleClick as the number two player in the market (“Just a nuisance,” says Zhu). Multi-national advertisers P&G (2012), Johnson & Johnson, L’Oreal, Microsoft, IBM and others have apparently taken notice of the company and struck deals.
Given some of its cookie-gathering architecture, the temptation might be to start building an ad network similar to Google’s AdSense, but Zhu says his company has no interest in targeting – just measuring with a product that might be compared to Nielsen’s Online Campaign Ratings (OCR) offering. In fact, Zhu says, the two companies have “a cordial relationship,” but there are no plans to combine efforts any time soon.
Zhu points to the two companies different methodologies online: “We each use different panel sources. Nielsen uses Facebook. We use independent third-party data sources across many publishers in China. We also recruit online panels through WPP Group’s Millward Brown and their Lightspeed Research unit.”
AdExchanger spoke to Zhu about his company and industry trends in China.
AdExchanger: What’s the bigger slice of pie in the ad market in China – brand awareness or direct response?
WEI ZHU: China is not like the US; it’s a lot of small- to medium-sized businesses, and consequently, the performance business is pretty big and includes the financial services, automobile and retail sectors. But the “big dollars” are from the big brand advertisers like YUM!, McDonald’s and Coke – we focus on the brand dollar first. We also provide surveys for brands. Nevertheless, performance is growing rapidly right now.
Why should advertisers trust Miaozhen when it comes to measurement?
In 2007, we created our position; we are independent. We never receive any money from the publisher; we are only compensated by the advertiser. Initially, we were the only provider in the market and P&G used us as the currency. Then, other big advertisers wanted to use us too. Right now, we have more than 100 advertisers that use us as a currency for measurement. The advertisers’ feedback has been very positive.
Google and Nielsen, however, are intermediaries and make a lot of money from the publishers, so it is difficult for them to make the same case with the advertiser.
Why did you need the $10 million round of funding recently?
We are doing PC-world measurements today. In the meantime, we already sense our business moving to mobile and have created measurement across 80% of China’s apps so that we can help advertisers measure their mobile apps reach and frequency. We have a measurement system in digital TV, too.
The big reason for additional financing is to continue to extend the GRP measurement to any digital device.
Another reason for the funding is… reducing the cost of a transaction. Measurement for every industry is very important to the transaction. Without a good measurement, it is difficult to let the advertiser spend their budgets. This holds true for exchanges. We’ve created an exchange in China [#3 behind DoubleClick and Alibaba, according to Zhu] and feel that measurement could help all exchanges by creating a healthy environment for the transaction and also shift spend from traditional media to digital.
Finally, the “big data” computing technology we have is unique in China. We have to raise more money to meet data storage and computing requirements.
Regarding your exchange and panel-based measurement businesses, are they interdependent?
No.
What about revenue or momentum numbers as it relates to your exchange and measurement businesses?
For the measurement business, we manage four billion RMB budget in China. For the exchange, right now we have two hundred million impressions every day. We hope to grow that to two billion by year-end. But today, ninety percent of revenue is still from measurement.
