Annual Report 2012 - HKExnews

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Management Discussion and Analysis (Continued) Business Review (Continued) Business model and strategy The Group has pioneered the concept of creating a sizeable network of flat-panel displays in elevator lobbies of office and commercial buildings to sell advertisements. After nine years, the Group has attained its 1,000th building under the Office and Commercial Building digital OOH media network. Building a viable business, one brick (building) at a time, until the Group is now the largest digital OOH media company in Hong Kong and Singapore in terms of the number of venues in which the Group deploys its flat-panel displays. The number of venues in which the Group deploys its flat-panel displays continued to experience double-digit growth over the previous year which allowed the Group to increase the advertising rates offered to its advertisers. Turnover was generated from a diverse pool of 256 customers; comprising 153 new customers and 103 repeat customers, demonstrating the medium is still very much attracting new advertisers onboard. The total adspend from the repeat customers increased by approximately 8% over the previous year and contributed to approximately 52% (2011: 46%) of the Group’s total turnover. These are testaments to the success and sustainability of the Group’s business model. The Group has laid a solid foundation and established an infrastructure to leverage on its core assets and resources of the Group’s relationships with its partners and advertisers to continue the Group’s endeavours to expand its business by the implementation of the various future plans and growth strategies as presented in the Prospectus and in the 2011 Annual Report. The Group is expanding its in-store digital network at Mannings from the current 200 stores to over 300 stores in Hong Kong as well as expanding the same at Watsons from the current 50 stores to over 100 stores in Singapore. Further leveraging on the existing infrastructure of its Office and Commercial Building digital OOH media network and as its relationships with Hong Kong’s leading real-estate developers, the Group has commenced the trial launch of its digital OOH media network at major private residential complexes (Residential OOH media network) in Hong Kong. In addition, the Group has signed trial agreements with its landlord partners for the launch of its large static OOH billboard media offerings for its customers. The Group will continue to seek out viable collaborations and partnerships with leading media enterprises in mainland China as part of the Group’s low-cost and low-risk market entry strategy to meet advertisers’ growing demand for quality media and advertising assets in mainland China. The Group has expanded its media partnership to other overseas regions outside of mainland China with Youku Tudou Inc., China’s leading Internet television company with approximately 90% share of the online video market; the Group was appointed as the media sales representative partner outside of mainland China for Tulip Media, China’s largest out-of-home LED media network with a network of over 200 large LED billboards; was appointed as the exclusive media sales representative partner outside of mainland China for Douban, China’s biggest spontaneous social network; and was appointed as the media sales representative partner in Hong Kong/Macau, Singapore and Taiwan, representing Baidu, China’s largest search engine with approximately 80% share of the Chinese search market. The Group continues to act as the exclusive media sales representative partner in Hong Kong and Singapore for Focus Media Holdings, China’s largest lifestyle targeted outof-home interactive digital media network. 10 FOCUS MEDIA NETWORK LIMITED Annual Report 2012
Management Discussion and Analysis (Continued) Business Review (Continued) Corporate social responsibility As a global corporate citizen, it is the mission of the Group to serve and nurture the community. To share the economic fruits with and in paying tribute to the society, the Group takes an active role in participating in various community, charitable and national building events in Singapore and Hong Kong for betterment of the community at large. Noteworthy events in 2012 included: (i) (ii) (iii) (iv) (v) Partnership with Mercy Relief to support regional humanitarian and disaster relief and sustainable development programmes (Singapore) Sponsorship of Singapore’s National Day Parade 2012 (Singapore) Sponsorship of Chingay 2012 (Singapore) Sponsorship of Coastal Cleanup Challenge 2012 (Hong Kong) Sponsorship of New World Cycling Charity Championship 2012 (Hong Kong) FOCUS MEDIA NETWORK LIMITED Annual Report 2012 11
Page 2 and 3: Characteristics of the Growth Enter
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