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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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