Interview with Saemin Ahn, Managing Partner, Rakuten Ventures
What are the top 3 things that a company must do to prosper?
For retailers, the name of the game is to find the right balance between sustainability and the new norm of consumption in 2017. In this perspective, the three things a company needs to focus on is in combination of but not limited to:
- Understanding where to cut costs and consolidate as a priority: For 90% retailers, you have to trim the fat no questions asked. You have to question how offline media spend is happening, how your team is staffed and audit your original relationship with agencies and mediators
- What the new medium of connecting with consumers are and pursuing it in a data intensive approach and invest in ad and martech: The simple answer isn’t “oh we’ll just start doing advertising on FB or IG”; those platforms are already saturated to a point where scale is hard to reach without a large depreciation in short term value of customer. Companies need to find trustful partners that will give them tech-centric, transparent solutions that enable them to buy programmatic media on especially mobile and evolving metrics – for example, once you capture a user into your funnel, your performance metrics need to change from Cost Per Install(if it’s an app) to Cost Per GMV
- Avoiding at all cost optimizing for metrics: CMOs and VP of media buying, strategic marketing procurement managers just don’t understand how broad and deep fraudulent digital media buying goes. This is a phenomenon exasperated by their want to get the “cheapest CPI, CPM” because they correlate that directly to “I’m doing my job correctly and I’m the boss”. On the contrary, this causes the raft of issues that induce bad actor behaviour from vendors and ad networks at the largest scale. Retailers will spend as much as 30-50% of their OPEX on marketing an yet they will not invest resources to keep pace with their expectations. These companies have as much marketing debt as they do tech debt. “To sustain that level of growth, Netflix maintains a sizable marketing budget – just shy of $1 billion in 2016. But it doesn’t have all that much human capital to spare. The company has 4,000 employees globally, and only 31 people on the programmatic marketing team. Over six months, four Netflix engineers were able to build a suite of custom in-house buying and measurement products on top of a combination of Facebook marketing interfaces, including the ads management, ads insights and lift APIs”
What are the most exciting opportunities in retail right now?
Some of the duopoly talk that’s happening around the closed garden ecosystem of FB and Google, and to counter this the rise of “syndicate media groups” are a fascinating push and pull macro-economic phenomena (Ad tech is fighting the Google and Facebook duopoly) in advertising.
What keeps you up at night?
Thinking about where to invest and commit next. The act of commitment for a venture capitalist is more religious than quantitative for me J and to find the right company to go on a long journey with – along with the other companies I’ve invested already – is indeed a consistently pressurising exercise.
Who or which company has been your biggest inspiration?
Companies like GE with their ruthless optimization and ever evolving business pillars is something that is amazing to see over several decades
Why are you speaking at Retail Congress Asia?
I’m honoured to speak at Retail Congress Asia Pacific and would love to interact with great companies.