It’s a Madhouse Out There!

But, fear not, Joshua Maa and his Madhouse team are set on making the powerful mobile advertising frontier a more logical and effective space, and it’s paying off! Under operation for less than a year, Madhouse has already become
 
• a fast growing player as China’s most intelligent mobile ad serving and reporting solutions hot spot
• a Red Herring’s 100 Asia award winner
• listed by Business Watch magazine as one of the top 100 fast companies in China
• and let’s not forget….the only company in China to win the Top Private Company selected by AlwaysOn Media

Far from ordinary SMS marketing tactics (yawn….), Madhouse is able to target ad projections based on handset models, the price ranges of those models, the plans selected by the users, and the cities in which those models operate…all to better pinpoint the right click-through ad to the most appropriate target market…and gosh darn it, it works!

In just its first eight months of operations, Madhouse served 168 million mobile targeted ad impressions yielding click through rates of 2 to 12 %. In one campaign alone, Madhouse built a Hennessy Artistry campaign WAP site containing the event information and party invitations as well as a wallpaper download function that enabled over 4,200,000 page views. The incredible brand awareness effect created was priceless!

Its unique mobile marketing business model leverages its three part structure (MadSolutions, MadServing and MadNetwork) to unleash the power of mobile advertising and offer leading edge services to its list of impressive clients that would make any start-up salivate. Their growing list of devoted clients include: Canon, iPod, Sony, Hennessy, Absolut, GlaxoSmithKline, Pepsi, Elizabeth Arden, Nike, Nokia, HP, and Dell Computers. Pretty impressive for a company so young, but no surprise knowing that its leader is Joshua Maa!

Joshua is the former EVP of Tom Online, China’s largest wireless value added service provider by revenue (it should be noted that 90% of that revenue was contributed by his team). Prior to that, he was the founding CEO of Rock Mobile Corporation, China’s leading mobile music entertainment service provider.

Joshua is a kingpin in China’s media world. If he keeps this up, I would not be surprised to look up successful serial entrepreneur in China in the dictionary…and see his photo there! So, onto our chat:

KTY: Welcome, Joshua

You’ve only been up and running less than a year. And all that you accomplished with Madhouse in such a short time can make a person’s head spin. Tell us, what’s the most important thing you would want people to know about how you make things happen the way you do?

Joshua: Vision, Innovation and Team Work! These are the main core values that I had emphasized and will continue to stress and build within Madhouse. I believe that mobile advertising is the new frontier and we have what it takes to make it work. Being innovative itself isn’t going to give us the whole yard. Team work and innovation are the foundation of Madhouse and this has made us a real mobile advertising Dream Team.

At Madhouse, my single challenge from the first day has been finding the right person for the right job and giving them the right environment to bring out the best in them. Madhouse could not have come this far had it not been for the team.

Establishing and taking Madhouse to the next level would definitely entail new challenges and I believe that a strong and dedicated management team is required to continue developing and managing the business and more importantly managing our team. There is really no vision or business without team work. I may have created the vision of Madhouse, but without them I don’t think there is any possibility of turning my vision into a reality.

KTY: Please tell us how you launched Madhouse and fill us in about your team and services.

Joshua: Madhouse got started from two angles: one from the advertising sector and the other from the mobile content sector.

David Ogilvy once said that 50% of advertising is wasted, but no one knows which 50%. Madhouse was established to challenge the current state of affairs in advertising, providing advertisers with the potential to target consumers with unprecedented levels of accuracy, immediacy, and interactivity.

With the rapid growth in the spending power of China’s emerging middle class and the Beijing Olympics, the China advertising market is in the midst of unprecedented growth. According to iResearch, China’s online marketing revenue will reach US$3.2 billion in 2010. Based on the example set by Japan, which has a highly developed mobile Internet industry, we expect mobile marketing revenue to exceed 10% of online marketing revenue by 2010, creating a huge new market.

While at TOM Online, we watched the China mobile content market grow into a US$900 million industry as China progressed from 2G (SMS) to 2.5G (Mobile Internet). During this transition, users became accustomed to “looking” at their phone screens in addition to using their phones for voice services. As the paid mobile content business continues to mature, we see mobile media as the next golden opportunity.

During the past 2 years over US$100 million in over 30 venture deals has poured into China’s mobile media and ad companies. China has over 50,000 mobile sites and over 100 million mobile Internet users. Leading WAP portals have over 100 million daily page views and millions of daily visitors. We believe advertising is the most viable and valuable mobile media revenue model, thus the birth of Madhouse.

In March 2006, Madhouse completed its first-round funding of US$3.6 million led by Gobi Partners and JAFCO Asia. Headquartered in Shanghai, and with offices in Beijing and Fujian, the Madhouse team consists of over 80 professionals.

We offer three key services and bring advertisers together with mobile media publishers to unleash the power of mobile media advertising.

1) MadServing: A highly intelligent, fully-automated, in-house system that serves specially targeted ads to mobile websites and client media and that also provides detailed reports on performance.

As an industry-leading intelligent mobile ad serving platform that enables targeted mobile ad serving, management, optimization, and reporting, MadServing delivers the most cost effective “media buy” campaigns through targeted ad serving and “ad version vs. ad position” optimization on mobile media for Advertisers and Agencies. For mobile publishers, MadServing delivers maximum ad space inventory utilization and maximum revenue returns via best price matching.

First of its kind in China, MadServing enables advertisers to serve ads based on characteristics of the ad viewer by region, carrier sub-brand and handset model; to place caps on impressions, clicks, and actions and to automatically serve top performing creators to optimize performance. A flexible mobile media buys based on CPM, CPC, CPA and time-based pricing models, in conjunction with various targeting criteria are also available.

2) MadNetwork – A one-stop shop to access the industry’s largest network of mobile sites.

MadServing provides advertisers with one-stop ad buying services across the MadNetwork of mobile websites, which includes the most trafficked sites on China’s emerging mobile Internet.

Via MadNetwork, Madhouse represents over 60% traffic of the mobile media in China including:
…Free WAP sector leaders in traffic
…Highly defined user communities that cluster around vertical sites
…On-device portals and in-phone media players
…Carrier media

3) MadSolutions - Mobile marketing solutions and campaign management services, including innovative campaigns featuring a mobile interactive messaging platform and mobile WAP site building.

The Madhouse team works with advertisers and ad agencies to design and execute innovative mobile media and cross-media campaigns. The MadSolutions team operates the interactive mobile messaging platform (SMS, MMS, WAP-push), as well as building, designing, and optimizing mobile phone WAP sites for corporations and campaigns. Via MadSolutions, clients are able to leverage traditional, cross-media buys, campaigns, and on-pack promotions, as well as existing CRM systems and member databases. Madhouse clients experience the benefits and effectiveness of mobile marketing as users come to interact with brands via mobile phone.

As outlined above, Madhouse derives its revenue through providing total mobile marketing solutions to agencies and advertisers, as well as from service fees charged to MadNetwork publishers.  Mobile marketing solutions include campaign and mobile site design, hosting, as well an interactive messaging platform (SMS, MMS, WAP-Push, etc).  The intelligent and automated functionality of MadServing creates a clearing house that enables a highly scalable business model and reliable 3rd party monitoring and reporting.

KTY: You’re by far the expert, but I understand that China has a huge market potential for your services. The market is expanding by leaps and bounds. Please tell us more about the market potential and if that growth makes your job easier or more challenging?

Joshua: Thank you for your compliment. Madhouse is certainly by far the leader in the Chinese market having gone live in July 2006 and already served in excess of 168 million mobile targeted ad impressions by February 2007 - and this figure will continue to rise exponentially.

The Chinese mobile market, according to reports from China’s Ministry of Information Industry, has an estimated 461 million mobile subscribers in 2006. In other words there are more mobile subscribers than there are Internet users in China.

Clearly, mobile is the fastest-growing new digital media platform and poised to be the next killer interactive marketing application. But this does not suggest that mobile has – and will – experience uninterrupted growth. Time will tell if the growth curve will kick back into high gear, but mobile advertising will certainly go through some road bumps as the crucial transition to third-generation mobile telephony, or 3G, takes shape next year when new 3G licenses are issued in China.  

Which ever way you see it, it’s without a doubt that mobile advertising will take off when “flat rate internet access over the mobile network” becomes common and affordable like the regular fixed network broadband internet access we have at home. With 3G network in China rolled out soon, it’s a matter of time before mobile advertising moves into prime time. By that time, Madhouse will be more than ready to take on any major mobile advertising campaign. After all, Madhouse is currently China’s largest and most intelligent mobile advertising network.

Our job and challenges may not be easy, but this is what we call a healthy problem. And, with a strong and committed Madhouse team, I see no reason why we cant take on the world of mobile advertising.

KTY: What sets Madhouse apart from the competition to have accomplished the success stories you have made so far?

Joshua: Our vision that mobile marketing is the next frontier and our innovation.

We believe in one mind and soul of the power of mobile advertising and we will continue to innovate to set ourselves apart. After all it’s the ability of our highly scalable Intelligent MadServing Platform that ultimately does the magic of serving out all the advertising to the 120 million data enabled mobile phones in China. With data enabled mobile phones continuing its uptrend exponential growth, I am confident that Madhouse has what it takes to keep pace with such growth leveraging on Madhouse’s excellent team of Researchers and Developers.

KTY: You already have an impressive list of clients…How did you get them and who would you like to sign on as new clients? What’s stopping you?

Joshua: I must thank the many agencies, clients and partners for having given us the opportunity to work with them. They have been very accommodating and many have a great outlook for mobile advertising. Almost all of our clients had endorsed their confidence by way of allowing us to continue to work with them for their current and future mobile advertising campaigns.

We certainly would like to sign up more global Fortune 500 and internationally big brands in this coming year. Though we have a complete product and solution for these potential companies, we are constantly working to better them so as to allow Madhouse to complement their overall advertising campaign adequately.

KTY: Are there ever moments when you and the team think that your ground can not be more innovative? How do you push past those times?

Joshua: I’m sure there are times that we may run out of ideas. After all being human, we are all limited and constrained by what we can do. To overcome this problem is simple, it goes back to “people”.

With proper people management and finding the right person for the right job, Madhouse will continue to innovate at an even greater and faster pace. Innovation in China isn’t enough as we need to innovate faster than others who will copy or duplicate what we do. Our Dream Team of researchers and developers at Madhouse are aware of the above and they are always many steps ahead of others.

KTY: What are Madhouse’s greatest challenges?

Joshua: Innovativeness, finding the right person for the right job and building and managing a strong and dedicated Madhouse Management Team.  The Dream Team of Madhouse is comprised of professionals from various backgrounds like Mobile, Internet, Media and Advertising and its our continuing challenge to combine and integrate to work as a team. On this note, we have done very well.

KTY: And, what has been Madhouse’s most rewarding moment?

Joshua: Securing our first mobile advertising campaign and having successfully served 168 million mobile targeted ad impressions by February 2007. It’s really a milestone for us that had eventually made us China’s Largest and Most Intelligent Mobile Ad Network. We had also been awarded with Red Herring Asia 100 2006, 100 Fast Company in China selected by Business Watch Magazine and AlwaysOn Media Top 100 Award 2007.

Apart from the awards, Madhouse has also been named an exclusive partner by China Telecom 3G Institute to strategically spearhead the mobile media & advertising on 3G networks and business for them.

KTY: That’s surely an exciting, impressive and important mandate. Is there anything else coming up next on the horizon for Madhouse?

Joshua: We have several plans up our sleeves with our main concentration focused on developing more clientele and of course building our MadNetwork, the truly mobile ad marketplace of China.

KTY: What would take Madhouse to the next level? What’s stopping you?

Joshua: There is really nothing stopping Madhouse at the present time to move to the next level as we are moving towards the next level with more clienteles and better research and development to fuel our overall Madhouse range of products and services. We are certainly going to be ready than ever to tackle the complexities of mobile advertising.

KTY: What do you think are the secret ingredients that propel companies towards success?

Joshua: First, you need a very good scalable business model that can be monetized. A great visionary management team with the right aptitude and attitude. In short, right product, right people, right place and right timing. The rest should be relative.

KTY: How can companies on the rise avoid some major pitfalls in the start-up trenches?

Joshua: Focus, focus and keep focusing.

Many start-ups have great business propositions and a great team managing it, yet failed at the first or last hurdle simply because they just lost focus. There is no way for companies or start-ups to be engaging too many business models or propositions at any one time and there is no way for any CEOs or head of companies to be multitasking and doing too many things at the same time.

Madhouse is clear with its own business proposition. We are here to build China largest Mobile Ad Marketplace and this is what we will continue to strive to do.

KTY: If you could create an imaginary advisory board made of brilliant minds from the past and those currently alive and active today to guide you, who would you name to this board …and why?

Joshua: The first person that comes to my mind is non-other than the great Richard Branson who has been a visionary and a true entrepreneur. There is no word that I can use at the present time to describe a man like him. He had certainly inspired me how to do business and lead my life. He is simply outstanding.

KTY: Well, with your experience and future adventures, I wouldn’t be surprised to see you become the Richard Branson of China. Thank you for sharing your thoughts and adventures with us today. Much continued success to you and the team!