Joy Spreader's H1 Revenue up 62.37%, Driven by the Popularity of Its CPS Billing Model
BEIJING, Sept. 3, 2021 /PRNewswire/ -- Joy Spreader Group Inc. (HKG:6988, "the Group", "Joy Spreader"), recently announced its interim results for the first six months ended June 30, 2021, during which the firm achieved revenue of HK$624 million (approx. US$79.8 million), an increase of 62.37 per cent from the same period of the prior year, while net profit excluding extraordinary items for the period rose to HK$137 million (approx. US$17.5 million), up 102.26 per cent year on year. A large segment of the growth was attributable to the Group's adoption of the cost-per-sale (CPS) model.
Joy Spreader's business model is based on leveraging its proprietary technologies and platform to create a relationship between mobile new media content publishers and corporate clients. Clients use Joy Spreader's supply-side platform (SSP) and demand-side platform (DSP) services to match e-commerce products and interactive entertainment products with mobile new media traffic, with the goal of facilitating consumption by users. Fees are based on performance indicators such as total sales transacted and number of conversions.
On the supply-side platform, Joy Spreader's recommendation engine matches the products or apps that mobile new media content publishers want to sell or offer for download with the media channels that would be a best fit for the product by analyzing the product's description against the data-rich profile of the media channel to produce a list of the best fits, and then places the marketing material for the product or app in appropriate marketing points within the selected media channels.
This in combination with further optimization of the transaction and billing process creates a steady revenue stream for the publisher. As of June 30, 2021, the number of covered marketing points for product placement within the Group's marketing ecosystem had climbed to 1,561,601, up 208.65 per cent from the same period of 2020. On the demand-side platform, Joy Spreader provides intelligent product sales forecasting services for corporate clients, which, for the most part, are e-commerce retailers, game publishers, and online content platforms. The service helps them win orders or add new users through purchases, add-ons and downloads.
One of the features of the business model is that, when used in tandem with Joy Spreader's professional services and competence in technologies, it helps corporate clients win new customers and orders by addressing their challenges with and expectations from Joy Spreader's Direct to Consumer (DTC) approach. Joy Spreader then negotiates a compensation model with each client based on several performance indicators, with sales being one of the most important. During the first half of 2021, CPS-based revenue accounted for 92.71 per cent of the Group's total.
The CPS model succeeds as it not only lowers the barrier to entry for the client, but also makes it easier to achieve a level of sales that meets the performance goals that the corporate clients have set for themselves, ultimately improving the return-on-investment (ROI) of marketing activities. For this reason, it is increasingly favored by corporate clients.
Joy Spreader's adoption of the CPS model relies on the Group's long-term investment in R&D and optimization of algorithm models, as well as a deep understanding of products and traffic commercialization. Nevertheless, when not properly applied, the barrier to entry using the CPS model can still be quite high. Without enough traffic and/or data accumulated over a long time period, marketing technology companies can't generate enough sales, or, even when they generate the sales, keep a high enough percentage of the collected funds, resulting in losses.
Joy Spreader's CPS model has proven itself effective and financially profitable after many years of investment and losses. The data accumulation which now goes back several years is one of the Group's most valuable assets, and one that is difficult to surpass or copy.
Over the long term, the continued accumulation of data and optimization of algorithms during the process of providing services will further enhance the efficiency of performance marketing and attract more placements by corporate clients, further consolidating Joy Spreader's leadership in the industry.
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