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April 2, 2012, Article

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MediaMath in The Australian Financial Review

Expats head home to take on social media rivals

By: Paul McIntyre  Published: April 2, 2012

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Three expatriate Australians are returning home from New York to take on Facebook at what the social media site does best: sell Facebook advertising.

It might seem a far-fetched notion but Facebook is up against what Google faced about five years ago, when the global advertising market started wising up to how the online search juggernaut worked.

In the cases of both Google and Facebook, tech-savvy entrepreneurs are now figuring out ways to match and even beat the website companies at their own advertising game. The incentive is particularly attractive when blue-chip advertisers have billions in advertising contracts up for grabs.

The chief executive of the world’s biggest marketing services company, WPP, Sir Martin Sorrell, last week hinted his London-based group would double its client spending on the social platform to $US400 million ($386 million) globally this year. WPP already spends about $US2 billion worldwide with Google, which is rapidly closing on the $US2.5 billion it spends with News Corp.

Enter the founders of Kinected, an Australian company that has struck a series of agreements with US tech firms backed by venture capitalists who deem Australia and the broader Asia region too difficult to expand into in their early development phase.

Kinected’s co-founders, Gary Hardwick, Mick O’Brien and Ross McNab are upbeat about using Australia as a beachhead into Asia.

Kinected has struck licensing deals with four US technology platforms. These are an online advertising trading exchange called MediaMath that operates like a sharemarket, managing bids for advertising inventory; a data management company called BlueKai; a firm that “tags” online ads to determine which publishers have generated a sale or click, called TagMan; and Unified Social, a technology that allows large advertisers to buy advertising on Facebook, LinkedIn, Twitter and other social media sites globally while avoiding Facebook advertising management entirely.

“Because it took social media a couple of years to do what TV did in 50 years, technologies are evolving very fast,” said Kinected’s chief executive Mick O’Brien.

“If you take social media advertising, and say focus on Facebook, major companies might be dealing directly with Facebook but they only get a certain level of service, a certain level of user targeting at a certain price. They’re not in complete control. These new technologies give the market better control over their advertising dollars on these new channels.”

Unified Social is one of the deals Kinected has struck. More are in the pipeline. Mr O’Brien said although Australia should be creating these technologies here, the risk appetite from local investors and a lack of scale means the US is driving most innovation in digital advertising.

“It has forced a lot of Australians to go offshore. Australia misses out but we see a very big opportunity to aggregate a great stack of technology platforms, bring them to Australia and then expand though Asia,” Mr O’Brien said.

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