This article first appeared in The Edge Malaysia Weekly, on March 28 - April 3, 2016.

LITTLE-KNOWN ACE Market-listed Innity Corp Bhd has big plans. The company is eyeing a Main Market transfer within the next two to three years, riding on the digital advertising wave. It also plans to provide its customers with solutions to turn advertising into knowledge and content-driven experiences.

When the company is big enough, it might also consider a secondary listing on a foreign stock exchange. The Hong Kong Stock Exchange is on the radar, says executive chairman Peter Phang Chee Leong.

The online advertising solutions provider believes that staying at the forefront of the online marketing wave in Southeast Asia is key to its growth. The rapid growth in global digital advertising today is being fuelled by an increase in the usage of and dependency on mobile phones, less expensive laptops and tablets, faster broadband and ample Wi-Fi connectivity. According to American research and advisory firm Gartner, Inc, the global mobile advertising market is forecast to reach US$41.9 billion by 2017, up from the estimated US$18 billion in 2014.

While online pop-up ads are part of everyday life, Phang acknowledges that hard-sell advertising is no longer effective. Instead, he says, content-driven advertising is the way forward. “I always think fixing problems is a good business opportunity. If you ask me, I do see a lot of problems to be fixed in the advertising industry, and that’s good for us because we (Innity) provide solutions,” Phang tells The Edge in an exclusive interview.

“We want to turn advertising into knowledge experience. We want to be part of the change to make advertisements less hard selling, but more engaging, more interesting, more entertaining and more informative,” he adds.

In a nutshell, says Phang, Innity aims to provide advertisement that is not a typical advertisement. “Imagine when you reach a shopping mall, you don’t know where to go and what to eat. Our advertisement will help you. But you won’t see it as an advertisement because it’s very useful content,” he elaborates.

Phang, 45, joined Innity in 2001 and was appointed group executive chairman in 2008. He has more than 20 years of experience in the digital industry and is a substantial shareholder of Innity with a 9.6% stake.

Interestingly, not many are aware that locally-listed JobStreet Corp Bhd is the second largest shareholder of Innity with a 21.1% stake. Tokyo-listed internet advertising agency D.A. Consortium Inc is the single largest shareholder with a 25.1% stake.

Established in 1999, Innity is a leading digital media network that provides interactive online marketing platforms and data-driven technologies for advertisers and publishers. Headquartered in Kelana Jaya, the group has operations in Malaysia, Singapore, Indonesia, Thailand, the Philippines, Hong Kong, China, Vietnam and Taiwan.

“We are a mediator that bridges the buy side (advertisers and media agencies) and the sell side (digital media and website owners, also known as publishers), and then we create a platform for them to buy and sell the ad space. It’s kind of like what Agoda.com does for hotels, but we do it for digital advertising,” Phang explains.

Innity has a strong foothold in the region, covering over 10,000 websites, including major newspaper portals and premier sites in more than 18 content-interest channels, such as technology, lifestyle, automotive, business and entertainment.

Phang reveals that Innity is practising the revenue-sharing model with publishers, with the percentage of revenue share, which ranges from 20% to 50%, depending on the difficulty of selling the ads. “If it [the ad space] is very difficult to sell, of course we would demand [a] higher [share]. The rates depends on the people and technology involved. It is also up to our negotiations with the publishers. If they think we can add value to their website, they might offer us a bigger percentage,” he says.

He adds that digital ad spending is growing steadily. Advertisers are cutting their budgets to go digital as they are now more in favour of one-to-one marketing over the one-to-many version. “If you put up an ad on a billboard, 10,000 people will be receiving the same message. But today, we are using data to power the content and creativity so that everybody can receive different messages from the same advertiser, and this is what we call personalised marketing,” he says.

In the region, Innity is competing with the likes of Google Ad Network, Komli Media and Exponential-Tribal Fusion. As such, Phang believes that it is important for Innity to find its own niche, which is creative technology.

“We are strong in technology selling, such as content ad, native ad, creative ad, high impact ad and programmatic ad. Yes, we are using technology as a base. But more importantly, human creativity is also involved, and that’s something that our competitors are unable to do by using artificial intelligence,” he comments.

Innity may be a lesser-known stock that hardly generates interest in the investing public, but it is worth noting that its share price, albeit thinly-traded, jumped more than 72% to a high of 76 sen on March 4 after the release of its financial results for the financial year ended Dec 31, 2015 (FY2015) on Feb 25.

However, the counter appears to have lost its momentum, closing at 58 sen last Tuesday, giving it a market capitalisation of RM80.3 million.

Director of corporate strategies Chow Tat Kee says management is aware of the sudden rise and fall in its share price recently but has not been able to find out the reason for it. “Our directors and major shareholders were not selling their shares, so the trading volume was very small. We tried to find out who the buyer and seller are, but we couldn’t and we don’t know what happened,” he says.

For FY2015, Innity saw its net profit more than quadruple to RM2.93 million, up from RM657,000 a year before. Its revenue also grew 68% from RM44.24 million to RM74.56 million.

The management says Innity has set an internal target to obtain US$100 million in revenue by 2018.

Commenting on Innity’s plan to transfer to the Main Board, and for a secondary listing on a foreign bourse, Chow says the group is keeping its options open.  “There are many possibilities, but we can only make the decision when the opportunity arrives.”

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