Japanese internet marketing company Allied Architects (TSE:6081) launched its first overseas subsidiary in Singapore in April. The company, Allied Asia Pacific, has basically two roles: bringing Allied’s service developed in Japan, such as Monipla, to the global market, and developing a new global service of their own.
Allied Asia Pacific launched its first service called ReFUEL4 on July 30th. Based on an approval from Facebook as its official API partner and partnership with Nanigans, one of Facebook’s strategic preferred marketing developers, the company has started providing a crowdsourced Facebook ad design platform for advertisers worldwide.
According to Allied Asia, a Chinese gaming company and a telco from the Southeast Asian region will start using the service tomorrow as a group of their first clients. While they are many available spaces that crowdsourced business can be applied to, the wonder is why they have chosen to focus on Facebook ads. Kazuhiro Takiguchi, the managing director for Allied Asia as well as managing the ReFUEL4 project, explained why.
Facebook ads are ‘consumed’ faster
Typical TV commercials aim to imprint their messages on viewers by showing them the same clip as many times as possible. Looking at what’s happening on Japanese private TV networks these days, many startups developing mobile games or news curation apps are investing a lot of money to broadcast their TV commercials so that consumers are aware of these products. TV commercials allow you to promote your “stuff” efficiently, but they merely keep broadcasting over the long haul because it is costly.
Meanwhile, Facebook ads allows one to easily target a niche in the potential global user base for affordable rates though it doesn’t reach a vast consumer base like TV commercials can do. Facebook gives you a dashboard where one can easily narrow down a segment of an ad target, but many companies running global marketing campaigns usually submit their ads through one of Facebook’s 50 preferred marketing developers or 13 strategic preferred marketing developers. They provide an ad submitting and management tool as well as serving one as an agent for Facebook advertising.
Takiguchi explained why he has developed the crowdsourced platform:
While Facebook ads are cost effective, the more impressions an ad receives, the more likely it will bore users because they recognize they have looked at it before. So advertisers keep creating new designs one after another to prevent viewers from getting bored with your ad. However, typical advertisers can never catch up with the pace to keep creating it. That’s why we developed a crowdsourced platform focused on creating Facebook ad designs.
Despite over $10 billion revenue from its global annual ad sales, Facebook earns only 5% of that from the Japanese market. That’s why ReFUEL4 targets the global market rather then Japanese market alone. On the platform, over 2,500 crowdsourced creators from many countries, including the US, Indonesia, Thailand and Singapore, have been proposing designs to advertisers according to their preference orders.
Considering the locality advertising, if one wants to appeal to Indonesian consumers, for example, the platform encourages one more to crowdsource to Indonesian creators who usually better understand the market trend in Indonesia.
Guaranteed CTR for advertisers, motivating creators for better designs
While ReFUEL4 is an ad production platform rather than an ad network platform, what’s unique is that it guarantees CTR (click through rate) for advertisers. Advertiser can order designs to crowdsourced creators using the platform at any time, but a creator can get no reward for his/her production unless advertisers adopt it and ad viewers (Facebook users) provide a favorable reputation to the published ad design by clicking it. Takiguchi elaborated how it works.
When submitting an offer, crowdsourced creators will propose their designs for the ad. If one take such an offer and it performs well, 3% of the ad revenue from the adopted design will be paid to its creator and Allied Asia on a 50/50 basis.
ReFUEL4′s dashboard for crowdsourced creators shows the CTRs of ad designs developed by other creators as well as own works. So it will let one understand what kind of designs will be favorably accepted and help earn more money. Takiguchi added:
We want to encourage more creators to get involved in bigger-budget promotion campaigns. And we’ve developed the platform so that creators can get money depending on how well their works have been performed for advertisers. While production cost is usually limited in the ad industry, advertisers can pay more if their ad shows better performance. Our creators can have larger dreams because our platform can pay them on a percentage basis.
Why Facebook ads?
There are many businesses that a crowdsourced platform can be applied to. If you look at these platforms only in banner ads designing, we’ve seen services like C-team by Recruit or startups like New York-based Dispop which came from Tel Aviv, Israel and fundraised $725,000. In a response to my question about why ReFUEL4 is focused on Facebook ads designing, Takiguchi explained:
Because our platform guarantees the minimum CTR, we have to work with a platform which has a technology helping keeping it high. The answer is Facebook or Google. I think even Twitter is still to come. Furthermore, Facebook ads have fewer format patterns, which can be implemented to a crowdsourced platform more easily.
Advertisers using the ReFUEL4 platform submit their ads to Facebook via aforementioned marketing company Nanigans. Based on a partnership with the latter company, Allied Asia can receive creation orders from advertisers for the crowdsourced platform without any massive promotion effort.
Allied Asia is currently developing a type of image recognition technologies behind the crowdsourced platform, to enable them to suggest how advertisers or creators should expose their products or put texts and images in ad designs for better performance.
With ReFUEL4, it is very interesting that the performance of an ad will have direct impact on the income of those who created it, which may also impact the business model of the conventional ad industry in the near future.