During the California gold rush back in mid 1800, one of the few people that made the most money aren’t exactly gold miners and diggers. It’s the smart bunch of people that sell shovels and other gears to support gold mining. Similar approach is currently being taken by Interspace, a Tokyo-based listed company who just launch their first South East Asia subsidiary in Jakarta today.
Instead of gold rush, Interspace is trying to take the e-commerce boom as a momentum to take their company off the ground in the Indonesian internet market. Interspace is an advertising company focuses on CPA (Cost per Action) and CPC (Cost per Click), a concept that’s been floating around in the local market although it’s fair to say that it hasn’t been well received by the local publishers who are already comfortable taking time-base ad placements. But even though big media publishers seems reluctant to welcome CPC/CPA advertising model, the less-traffic, highly-niche, high-conversion websites (niche vertical blogs, price comparison sites, etc) are more open minded in receiving these advertising model.
Shohei Fujita, Interspace’s GM for overseas business said during their launch event, “Access Trade is currently focusing on Indonesia’s growing e-commerce market among a few verticals we’re currently targeting”. Price comparison site seems to be one of the focus for Interspace in marketing their CPA/CPM ad business, the business of price comparison site is directly benefiting from CPA/CPM model where advertisers will pay once the sales is happening.
A quick look on their public financial statement shows that their revenue in Japan has been flat for the past few years, which is probably why Interspace decided it’s time to expand to markets outside of Japan. All and all, it’s safe to say that Interspace is the latest to join the flock of Japanese advertising companies who has been expanding to Indonesia for the past 2 years. Interspace’s biggest competitors in Japan are Adways and MicroAd, both have been settling in Indonesia for quite some time and a head start to approach brands, publishers and work with their local partners.
Interspace will soon realise that their biggest challenge in this particular market, is not a question of getting enough advertisers to throw money at them, we have enough of these advertisers and agencies ready to spend money. The main issue will be finding a good credible and sizeable local publisher as their channel to enough collect business leads to get them to scale. Whether Interspace will overcome this issue, only time can tell.
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