Kevin Huang outlived the sector bust and now he's ready to reap the rewards Love it or hate it, internet advertising is here to stay and one Hong Kong company is even betting that cyber suggestions are in fact on the cusp of becoming a prized advertising tool. The field attracted a host of companies in the first years of the internet boom, but by the time the bubble burst most local internet advertising networks had disappeared. Firms such as 247 Media Asia, Engage, Ad Search and BMC Media were history by the end of 2002. The exception was DoubleClick Media Hong Kong, which was renamed Pixel Media Hong Kong after a management buyout under chief executive Kevin Huang Jiunn Jin. Initially, Mr Huang came to Hong Kong from Malaysia to run DoubleClick's media sales office. The firm had started as a media sales company and then moved into the technology business, becoming the world's largest internet media sales and technology company. Mr Huang was convinced that DoubleClick's decision to retreat from its media interests here was far too hasty - so he took over the business. 'DoubleClick exited Hong Kong in 2002 and we took over their media business,' he says. 'They maintained their technology business worldwide and in Asia, and that's their main core business,' he adds. Mr Huang believed that internet advertising had huge potential. After changing the company's name to Pixel Media, he turned his attention to the DoubleClick model and slashed costs by moving to cheaper offices and halving the salaries of his four employees. Then, he set out to prove the doubters wrong. 'In 2002 everyone said no one could rely on online advertising alone, but we are only selling online advertising and we are thriving,' he says. Pixel Media has been profitable since the takeover in mid-2002, he says, and its profits and revenues are rising. The original backers, family and friends of Mr Huang, have all recouped their investment, he says. The number of staff has expanded to 13 and another office has been established in Malaysia. Pixel sells advertisements as the sole sales agent of leading Web publishers in Hong Kong. It works with companies such as Next Media Group's Next.com, travel portal Zuju, scmp.com, soccernet. com and MSM's man.com.hk. Pixel's publisher clients are aware they can earn money from advertisements but do not want to channel their resources into selling it, Mr Huang explains. 'We make our money on every advertising dollar that we sell,' he says, adding that turnover was $4 million last year and is set to rise this year. Internet advertising takes many forms, ranging from commercials on websites, to site sponsorship, search engines and, most intrusively, directly to an email inbox. The advertisements are designed by agencies, but Pixel advises on strategies for targeting a specific audience. 'For example, we suggest whether to use a banner or a skyscraper ad,' Mr Huang says. But why should clients choose online advertisers over traditional print media or television? 'With the internet everything is measurable,' explains Mr Huang. 'Everything is traceable and we know how many people responded [to an ad].' From the outset, sceptics said online ads would never replace television and print media. But even if they were correct, that does not mean online ads lack value, or that the business cannot be profitable. In fact, online ads have become an extra, rather than a replacement, medium - but that is good enough for Mr Huang. 'Good examples are HSBC and Cathay Pacific who use all forms of media now. The idea being to reach people by whatever media that person uses,' he says. Television no longer dominates advertising. 'People increasingly get their news from the internet. We are seeing a shift from TV and from traditional direct-mail shots,' he says, noting what must be good news for trees and postmen. 'But now we get junk email,' he concedes. Even he grudgingly admits that internet advertising can be annoying. 'I think everyone is irritated by advertisements, especially television breaks placed at the critical point in a movie. But if you didn't have advertisements, you could not have cheap or free television.' Email advertising, better known as spam, is the least annoying form of online advertising, he insists. 'That's because we can target advertisement specifically to your interests. If I was a Lane Crawford customer and received an email ad saying there was a 30 per cent discount today, I wouldn't find that irritating. We can target that kind of thing on the internet - that's the beauty of it.' Broadband is eating away at television, Mr Huang says, noting that internet use is still growing fast and in the US 14 per cent of all 16 to 60 year olds spend time online. Despite this, companies do not allocate the corresponding proportion of their advertising budget to the internet, he says. 'In the US only 3 per cent of a typical company's advertising budget is spent on the internet, not 14 per cent.' In Hong Kong, Taiwan, South Korea and Japan the figure is 1 per cent or less. 'So we think there's tremendous potential for growth, The internet is hot again, everyone is talking about it.' Hong Kong has 4.5 million internet users, 2.7 million of whom spend 30 hours online a month. 'Considering the long working hours in Hong Kong, most people have only three hours free time at night, of which 90 minutes is spent on the internet. And that's home use, not counting online time in the office,' Mr Huang says. Now all he has to do is convince advertisers to channel more money into online ads. One selling point is that they are much cheaper. 'We can run a two-week online campaign for $75,000. That's the same price as a full-page colour advertisement in, for example Apple Daily or one 30-second spot on television,' he says. Still, despite the lower costs, online advertising faces huge hurdles. 'We spend a lot of time convincing people it's a good idea' he says. But he remains confident, insisting: '2005 is the year Pixel grows up, with expansion planned for Singapore and China, where things are very attractive.' 'Our business is built on Web publishers and Web advertisers, and we will continue to grow our market share.' Mr Huang sees a long line of competitors, with internet portals at the front. 'Also I see other forms of advertising as our competitors - anyone who's after an ad dollar.'