Indie Chinese Agency Hylink Digital Has Designs On The US

humphreyhohylinkChances are you haven’t heard of Hylink Digital Solutions.

But it’s the largest independent agency in China, has been around for 22 years, employs 2,200 and just opened its first US office in Santa Monica in late September.

Think of Hylink as a sort of hybrid between Merkle, Hill Holliday and Wieden+Kennedy.

“Hylink isn’t really a household name here in the US, but we sit on the largest amount of data in China,” said Humphrey Ho, Hylink’s US managing director. “Everything we do is data-driven.”

Hylink’s US expansion strategy is threefold: It wants to help Chinese companies land softly in the US, give US companies their China sea legs and act as a shepherd for US content distribution in China.

“There hasn’t been an agency that represents Chinese companies to help them settle in better in the US and North America,” Ho said. “Others are acquiring companies in the US, but we’re here to curate partners and find the products our Chinese clients need to get into this market better.”

Multinational brands are also looking for the same favor in China, including quite a few on Hylink’s client roster, such as Google, Estée Lauder, General Mills, Ikea, Goodyear, P&G and Yum brands.

AdExchanger caught up with Ho, who joined Hylink in January to spearhead the agency’s US push.

AdExchanger: What is Hylink Digital?

HUMPHREY HO: We’re an interesting beast because we never separate media and creative. Whereas in the States there are often separate agencies and vendors for almost everything – creative, media planning, media buying, DMPs, DSPs, SSPs – we have all of those departments working together internally so they can all see all of the data.

We work with Baidu, Alibaba, Tencent and Sina – the four biggest media giants in China. Because we’re often their largest buyer and strategic partner, we’re privy to quite a lot of data. We mine social data from Weibo and WeChat, ecommerce data from Alibaba and Tmall and web and search data from Baidu.

The Chinese market has an enormous amount of data that can be used for advertising just because of the sheer volume of human beings there. The challenge is organizing it and making sense of it across the entire journey.

Baidu, Alibaba and Tencent are the walled gardens of China. Why do they give you access to their data?

We invested in innovation early when these platforms were first growing up. We invested in events and shows with them and we’ve beta tested their new technology. When WeChat first started testing ads in Moments, which is like their news feed, they came to all the agencies looking for eight clients in eight different industries to participate in the test. We gave them six of the eight clients.

Hylink has a partnership with Alimama, Alibaba’s ad exchange and data arm. How do you work together?

We’re also one of six five-star Baidu strategic partners and we have a strategic partnership with Tencent. These are APIs that don’t typically open up. But even though we work with them, it’s on a case-by-case basis according to client. It’s not a steady fire hose of data.

We use the data to develop insights. If we’re working with a tourism client, for example, they might come in and say, “We think our customer journey looks like this or that because we did a bunch of focus groups.” But we don’t care about that. We care about the journey as it looks today and how people book travel today. Clients find that refreshing.

What kind of internal technology do you have?

We’ve developed a number of technologies in-house over the last five or six years, including an in-house DSP, SSP and DMP. We also have a division whose job it is to interface between those technologies. We’ve invested in artificial intelligence engineers in the US and we have 80 people in Beijing and western China whose job it is to create a user interface between those technologies for our clients.

That’s rare for a company in China. Rather than giving clients an Excel spreadsheet, we hand them a login and a password so they can go and see for themselves how their campaign is going. They can do a viewability check, they can do an audit on whether the ads were served and they can adjust the campaign if they want, although I don’t think any client has ever actually done that.

Why do you need your own ad tech? Why not partner?

In order to acquire premium resources in China, you need to negotiate directly with the portals and video sites, and having our own SSP allows us to aggregate above-the-fold inventory and first- and second-position pre-roll, which is usually reserved for non-programmatic buys.

We also need a DMP or social CRM analytics tool because some social data, like WeChat, for example, is closed. Our social CRM tool allows us to mine that data and cross-map it to a client’s DMP. We also build DMPs for our clients if that’s what they need.

Too many competitors are owned by one guy or another – Alibaba owns a custom solution, but it doesn’t link to Tencent data. Tencent can give you WeChat data, but not Sina data. You still have to buy on their platform individually at times, but you also need your own set of solutions. We’re the only one in China really investing the time and money to do this.

And having a DSP allows clients to log in and buy their own media. That might not sound so sophisticated because you can log into AdRoll or buy through the Google Display Network, but in China clients cannot buy media directly. By law they need to buy through an agency.

Are media rebates and kickbacks a problem in China?

There were expectations of rebates, although a lot of the time it wasn’t anything more than extra resources toward a campaign in purely digital environments.

In 2014 [when China President Xi Jinping began a serious anti-corruption initiative], clients started coming to us to split out their digital budget and we began winning a lot of purely digital campaigns and retainers.

We give clients their own login for everything from Google Analytics to Baidu to whatever video exchange platform they’re working with. We simply can’t fudge the numbers. We charge a service fee, which is a big no-no in China, but it’s because we’re purely digital. Clients pay us for strategy and for the work we do and the cost of the media is the cost of the media.

Chinese consortiums are spending billions of dollars on US and European ad tech. Any plans to do the same?

We’re taking a different approach to the one taken by companies doing billion-dollar acquisitions of American firms. We’re not saying no to that, but right now we’re helping people better position themselves in China and we’re helping Chinese clients position themselves better with best-in-class partners in the US. That’s our core competency.

 

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