Go-to Market Strategy Media Company deck
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Transcript of Go-to Market Strategy Media Company deck
Digital Media <Company>
Market Entry Strategy for South Korea By
Shikhin Agarwal
Execu9ve Summary
• Strategic Alliance with SK based companies to establish rela9onships with Publishers and Ad Networks/Exchanges may be the best market entry strategy for <Company> – SK is a mature market, which necessitates quick acquisi9on of publishers and channels – Alliance/Partnership will avoid opera9ng and financial risk especially due to different business
environment in SK as compared to US – Technology innova9on, higher margin business model and beLer ability to manage SK leadership will
be the key to long term success
• South Korea (SK) represents a strong market opportunity with es9mated online display ad spend of $1.5B in 2011 with poten9al to grow by 20% in 2 years
• Compe99on data, although limited, reflects indirect compe99on with publishers and ad networks in-‐house technology and poten9ally direct compe99on as well
• Business ecosystem in SK has some dissimilari9es than in US, which puts a stress on building right partnerships to succeed
• Regulatory environment is strong and effec9ve in SK, along with some recent examples of legal ac9ons against global players like Google
• As next steps, primary research is required on compe99on and poten9al partners in SK
Market Entry -‐ Approach
Acquisi9on
Joint Venture
Minority Stake
Strategic Alliance
Marke9ng Partner
Organic Entry
Market Size / Growth
Business Ecosystem (Partners, Suppliers)
Compe99on
Industry, Laws & Regula9ons
<Company> Capabili9es & Resources
Issues to Consider Op8ons to Enter
Market Entry
Strategy
1
2
3
4
5
Priori9zed Op9ons
Market Size & Growth (1/2)
• South Korea is a growing mature economy with 3% – 6% annual output growth in 2011 -‐ 2015
• South Korea has deep Internet and Mobile penetra9on, s9ll trending upwards by 2015 – More than 80% (~ 38M) popula9on is online with more than 90% broadband connec9ons1
– About 85% (~ 41M) popula9on use mobile 26% using mobile internet; Sales forecast of 2012 indicates sale of 20M smartphones2
– Internet and mobile users are typically 60% males and 40% females; 50% have monthly income levels in range of $2K -‐ $5K and rest 40% have that greater than $5K3,4
• Total Ad spending is es9mated to be $8B4 out of which Online Display Ads (banners, rich media, video & mobile) account for $1.5B (18%)
1 -‐ Internet Usage Rates in Korea, Credits to Internet World Stats 2 -‐ Smartphone Trends in South Korea, credits to KCC, ROA Consul@ng 3 – eMarketer.com, No income level data or income less than $2K for remaining 10% of the popula@on 4 – 1 USD is equal to ~ 1100 SKW 5 – Online display ad spend in US ~ $13B on online popula@on of 250M
SK Online Display Ads Spend is likely to rise, as this spend per online user in SK is about $37, which is lower to that of US5 of $52
1
Market Size & Growth (2/2)
1 – Numbers es@mated based on a study of Starcom MediaVest Group, Aug 2011
Display Ads spend is es9mated to be $1.8B with Mobile and Video categories experiencing stronger growth than other categories by 2013
1,050 1,079 1,105
225 289
379
105 147
178
-‐
500
1,000
1,500
2,000
2011 2012 2013
Display Ad
Spe
nd ($
M)
Year
Mobile
Rich Media
Video
Banner Ads
• Overall market is es9mated to grow by 20% over next couple of years1
• Within Online Display Ads, Mobile and Video category are expected to grow faster than other categories1
• Rich Media is assumed to be constant during this 9me frame
$1.5B
$1.8B
1
Compe99on
• Limited direct compe99on in South Korea – Google has a few hundred employees in SK1 with almost none focused on display
adver9sing
– No publicly available data on Rubicon Project and Admeld2
• Possible existence of indirect and in-‐house compe99on3
– Being a mature market with fairly large size of the industry, the leading publishers may have in-‐house tools for yield op9miza9on
– There is also possibility of ad networks providing “yield op9miza9on” services to the publishers
Publicly available data on compe99on is limited and needs addi9onal direct research with the publishers and other industry players
1 – LinkedIn search provides about 100+ employees but none of them using keywords of “display adver@sing” 2 – Internet searched do not provide any useful insights into presence of these companies in SK 3 – Hyperlinks to the ads on SK websites are sourced from in-‐house ad networks
2
Business Ecosystem
Adver8sers
Publishe
rs
Ad Agencies Ad Networks/Exchanges
Direct Compe99on (SSP, Yield
Op9miza9on) – Exist?
3
Top Publishers: • Naver • Korea.net • Daum.net • Chosun.com • Paran.com
Top Adver8sers: • Samsung • Hyundai • SK Telecom • P&G • LG Group
• Business in South Korea has some similari9es and dissimilari9es to US:
Business environment in South Korea is somewhat similar to US although there is s9ll concerns over fair compe99on between local and global players
Similari8es Dissimilari8es • Large base of Internet users, broadband and mobility • Mature market of ad spending and presence of several ad agencies and ad networks • Ecosystem also has other players such as online user data & insights providers, analy9cs, etc.
• Tradi9onal businesses tend to be conglomerates with several disconnected businesses • Bloggers and unofficial sources are concerned about government’s support to SK businesses against foreign players
Cheil Worldwide, Omnicom, Yahoo Ad network, Asian Ad Networks, Experian user data, Data and analy9cs providers (BizSpring, Nethru)
Industry, Laws & Regula9ons
• SK ranks 35th in economic freedom worldwide as per 2011 Index of Economic Freedom (see Appendix) – On this index US ranks 9th – Key issues in SK are the lower labor freedom (costly to fire workers) and existence
of corrup9on • SK government is concerned about its users privacy protec9on, data
collec9on and misappropria9on by companies – May 2011: Google office raided by SK police1
– April 2011: South Korea enacted comprehensive Privacy Law2
– Sep 2010: Korea Communica9ons Commission (KCC) created task force on social networking over privacy concerns3
4
1 – Reported by Reuters 2 – Released by Ministry of Public Administra@on and Security 3 -‐ h]ps://wiki.smu.edu.sg/digitalmediaasia/Digital_Media_in_South_Korea
<Company> needs local support in South Korea to manage the laws and regula9ons concerning overall business and digital media industry
<Company> Internal Resources & Capabili9es
• Capital Availability: Required primarily to conduct ini9al sales & marke9ng ac9vi9es, office setup, etc. – May also be a considera9on to acquire assets / companies in SK
• Experience in SK: Management experience in SK, as the country has a dis9nct work culture as compared to western countries – Includes the ability to hire and lead senior execu9ves in SK – Managing partnerships and alliances with SK companies
• Opera9onal Capabili9es: Issues related to product, pricing, support, etc. – Product capabili9es and interna9onaliza9on for language support, etc. – Effec9ve ways to create and manage sales channels – Service/account team structure and scalability
5
<Company> strong capabili9es and healthy resources will facilitate market entry into South Korea
Issue Summary Affect on <Company> Strategy
SK has healthy market size which will con9nue to grow in near future
Immediate entry into the SK market
Compe99on data is unclear and needs further research
Depends on <Company> market share goals in SK over
next 2 -‐3 years
Business ecosystem may be challenging for new entrant due to
unique work culture
May need support to develop local alliances and
partnerships
Old and new regula9ons, along with presence of corrup9on, are
challenging
Requires partners to deal with local issues
<Company> has strong product and opera9ons capabili9es
Supports a market entry into SK
Evalua9on of Market Entry Op9ons (1/2)
Market Size / Growth
Business Ecosystem (Partners, Suppliers)
Compe99on
Industry, Laws & Regula9ons
<Company> Capabili9es & Resources
1
2
3
4
5
Favorable Factors Poten9al Challenges Further Valida9on Needed
Evalua9on of Market Entry Op9ons (2/2)
Market Entry Op8ons Pros Cons
Acquisi9on
• Quickly obtaining market share & revenue (meets the business goal) in mature market • Immediate availability of key assets like channels, publishers, etc.
• High financial and opera9ng risk (integra9on) in new country
Strategic Alliance
• Create alliances in specific areas to deal with business environment • Mul9ple alliances help create stronger ecosystem in long run
• Slower way to enter marketplace than acquisi9on • Need of local business leaders to manage alliances
Organic Entry
• Maintain <Company> culture and values globally • Ability to innovate and build business profitably in niche areas • Low financial risk
• Compe99on may risk expansion in mature market • Building opera9ons may take long 9me
Strategic partnership based market entry would reduce risk and provide ini9al market share for <Company> to further grow in the SK market
Minority Stake
Sewng Right Business Goals and Time Frame
Short (0 -‐ 1 year) Long (3 – 5 years)
Low
High
Time Frame
Market S
hare ($
) Acquisi9on
Joint Venture
Strategic Alliances
Marke9ng Partner
Organic Growth
Where do we want to be?
Next Steps
• Complete market study on poten9al players in SSP / Yield Op9miza9on space – Conduct detailed compe9tors’ analysis for SK – Conduct study on how publishers currently address yield op9miza9on
• Iden9fy poten9al companies for partnerships and alliances with access to publishers data and inventory
• Refine market entry op9ons based on compe99ve and partnership candidates’ informa9on
APPENDIX
South Korea – Economic Freedom