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36Kr/KrASIA

Chinese startup transforms ads with AI-based technology

Markable's mai solution allows search and purchase of items while watching video

When consumers take interest in a fashion item, mai's ad plug-in immediately identifies the content and automatically displays products. (Photo courtesy of mai)

BEIJING -- A survey by U.S. consultancy Boston Consulting Group shows that 70% of young people are motivated to shop by browsing or viewing media content. As a result, content-based ads are becoming a new trend in the e-commerce marketplace.

Live commerce platforms and image- and video-sharing social media are also winning the hearts of fickle consumers by stimulating consumer appetite via the content. While there is a lot of content that can be monetized on China's Twitter-like microblogging site Weibo and video-sharing platforms, existing methods like spot ads do not appeal to viewers or hamper users' viewing experience.

Markable AI (mai), launched in 2016, is an artificial intelligence-based solution for content recognition technology aimed at optimizing content ads. As soon as consumers take interest in fashion items that appear in the content while browsing images and videos, mai's ad plug-in immediately identifies the content and automatically displays products that meet consumers' needs. It is a system in which consumers are actively involved with ads and are not disturbed by them.

Moment API, which was released this year, is a video recognition application programming interface designed to help ads turn profitable. It is compliant with post-roll ads, and AI will recognize fashion items that appear in the content, and automatically search and recommend products.

The interface adopts one of the most difficult recognition technologies in the computer vision area. It is epoch-making as it can "recognize multiple objects instantly and correctly."

Lens API, an image recognition API released in the past, is also linked with leading e-commerce platforms' inventories. It is designed to search the products of users' choice or products with similar designs for users of content platforms in real time.

Joy Tang, founder of Markable, which operates mai, stressed that while most video ad-related technologies available in the marketplace are scene- and multi-frame recognition technology, these are in essence classified as still image recognition technologies.

The mai video recognition technology, meanwhile, can follow the products that catch the attention like human eyes. The technology can keep track of the time until a product appears, disappears and appears again, as well as recognize structured data.

Its business model is to mediate between advertisers and content platforms. While most advertisers prefer pay-for-performance ads to avoid risks, platforms prefer billing based on the number of ad impressions.

The solution offered by mai aims to secure cost per mille (cost per thousand) ad spots for platforms and sell cost per share and cost per action ad spots to advertisers, who place more emphasis on conversion rates. It is a method by which both platforms and advertisers benefit.

These solutions have been partly introduced by China's Weibo and Baidu's video streaming unit iQiyi. The company has partnered with China's leading e-commerce platforms including Taobao, Tmall and JD.com, Japanese apparel company Mark Styler, and U.S. fast-fashion chain Forever 21, as well as overseas online fashion shopping sites including British online retailer Farfetch. It handles more than 20 million stock keeping units. Product prices are updated every day, keeping products' sales suspension rate at 3% or lower.

Tang said that mai's conversion rate is between 1% and 3%, and that the company expects a gross merchandise value of more than 10 million yuan ($96,376) and an operating profit of several million yuan. The company also plans to expand business in Japan and the U.S.

Tang majored in mathematics and economics at Massachusetts Institute of Technology in the U.S. He became a serial entrepreneur after working for seven years as an algorithm engineer for high-frequency trading in Wall Street.

The AI-based solution has raised about $9 million in funds from investors including Deepcore, a SoftBank-backed, AI-focused venture capital firm, and Dentsu of Japan, U.S. venture capital firms FoundersX Ventures and Plug and Play, and Hong Kong tycoon Silas Chou's family office.

36Kr, a Chinese tech news portal founded in Beijing in 2010, has more than 150 million readers worldwide. Nikkei announced a partnership with 36Kr on May 22, 2019.

For the Japanese version of this story, click here.

For the Chinese version, click here.

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