BUSINESS. For the year ended 31 March HK$ 000 % HK$ 000 %

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1 OVERVIEW Headquartered in Hong Kong, we are a digital marketing service provider, primarily engaged in the provision of digital marketing services. Our mission is to help brand owners to acquire, maintain and retain customers via digital marketing platforms. Depending on the objectives of our customers such as advertising agencies and brand owners, we provide tailor-made digital marketing solution mix which may comprise of (i) search engine marketing; (ii) search engine optimisation; (iii) display advertising; (iv) social media marketing; and/or (v) video advertising; to meet their respective specific needs. In providing our digital marketing solutions, we partner with digital marketing partners i.e. our suppliers, who own and operate the digital marketing platforms such as search engines, websites, social media platforms, mobile sites and apps to plan and implement our digital marketing solutions and launch marketing campaigns for advertisers i.e. our customers. According to the Ipsos Report, we ranked second out of all digital marketing service providers in the digital marketing industry in Hong Kong in terms of revenue for the year ended 31 March For the years ended 31 March 2015 and 2016, the number of our customers grew approximately 33.4% from 670 to 894 with a corresponding 17.4% increase in revenue from HK$118.0 million to HK$138.5 million respectively. We have a long operating history that dates back to June 1996 and initially had been focusing in Hong Kong. We then opened our subsidiaries in Shenzhen, Guangzhou and Shanghai in the PRC in 2001, 2012 and 2015, respectively, with the intention to market our digital marketing solutions to outbound customers. Subsequently, we established our wholly-owned subsidiary in Macau in November 2011 and our Taiwan branch in June According to the Ipsos Report, digital marketing spending in Hong Kong experienced an explosive growth in the past five years at a CAGR of about 35.5%. Digital marketing spending in the PRC also increased from about HK$36.8 billion in 2011 to about HK$131.0 billion in 2015, at a CAGR of 37.3% which occupied about 20.2% of the total marketing spending in the PRC. In addition, digital marketing in Taiwan increased very rapidly from about HK$2.6 billion in 2011 to about HK$4.4 billion in 2015, at a CAGR of about 13.3%. During the Track Record Period, our revenue was mainly generated from our operations in Hong Kong, the PRC, Taiwan and Macau. 94

2 The following table sets forth our revenue attributable to our customers based on the locations in which they operate during the Track Record Period: For the year ended 31 March HK$ 000 % HK$ 000 % Revenue attributable to our Hong Kong-based customers 49, , Revenue attributable to our PRC-based customers 64, , Revenue attributable to our Taiwan-based customers 3, , Revenue attributable to our Macau-based customers Revenue attributable to our customers based in other jurisdictions , Total: 117, , We have a strong and diversified customer base, comprising a variety of vertical industries including e-commerce, travel and hospitality, education, beauty and health, banking, finance and insurance. The following table sets forth a breakdown of our revenue by our customers respective vertical industries during the Track Record Period: For the year ended 31 March HK$ 000 % HK$ 000 % E-commerce 65, , Banking, finance and insurance 3, , Beauty and health 5, , Education 13, , Technology 5, , Business services 4, , Travel and hospitality 3, , Public bodies and NGOs 5, , Others (Note 1) 11, , Total: 117, , Note: 1. Others mainly included fashion and luxury products retailers, manufacturers, property developers, etc. 95

3 According to the Ipsos Report, the digital marketing industry is increasingly competitive. Our business model thrives on (i) our ability to fulfill our customers advertising objectives, which are measurable by parameters including the number of clicks, the number of impressions, number of trueviews, number of sales leads, number of registrations and number of installations that the placement of the advertisement has generated within a certain period of time; and (ii) our ability to achieve a lower cost of service provided. We originally adopted a business model where we assist our customers to procure advertising space from digital marketing platforms of our digital marketing partners. This, we typically charge our customers on a cost-plus basis i.e. with a fixed rate service fee on top of the cost of procurement of advertising space payable to the operators of websites, apps, mobile sites, social media platform and search engines which are usually our digital marketing partners. We termed this fixed rate based contract. We then began to provide performance based contract to our customers since For performance based contract, we charge our customers a negotiated amount depending on the types of guaranteed performance we are required to deliver to our customers. During the course of our operations, we have accumulated volumes of data about a variety of vertical industries such as e-commerce, travel and hospitality, education, beauty and health, banking, finance and insurance. We stored these historical data in our big data system since 2007 which provides our employees the opportunities to gauge relevant vital statistics, in relation to number of impressions, number of clicks, CPC, click-through rate and ranking. This big data system and digital marketing optimisation tool can be used to enhance our QS when placing bids to our digital marketing partners. The following is a breakdown of our revenue in terms of fixed rate based contract and performance based contract during the Track Record Period: For the year ended 31 March HK$ 000 % HK$ 000 % Fixed Rate Based Contract 74, , Performance Based Contract 43, , Total: 117, ,

4 COMPETITIVE STRENGTHS We believe our success is attributed to, among other things, the following competitive strengths: Our well-developed vertical industry based technical know-how enables us to create value for our customers We believe that our big data system and the use of digital marketing optimisation tool, together with our experienced sales and business development and customer account management teams, have allowed us to provide cost-effective digital marketing solutions to our customers. Our business model thrives on our ability to fulfill our customers advertising objectives, which are measurable by parameters including the number of: (i) clicks; (ii) impressions; (iii) sales leads; (iv) registrations and (v) installation the placement of the advertisement has generated within a certain period of time. One of the major factors which most of the international digital marketing partners take into account when considering advertisement positioning and pricing is QS. The higher the degree of relevancy of the keywords, advertisement description and landing pages, the higher the QS. Having higher QS can lead to lower advertisement placement prices and better advertising position, thus the cost-per-acquisition will be lower and therefore reduces the cost of service while enhancing gross profit margin on performance based contracts. We have over 10 years of experiences in providing digital marketing services to our customers, including brand owners and advertising agencies which have enabled us to build a strong and diversified customer base, representing a variety of vertical industries including e-commerce, travel and hospitality, education, beauty and health, banking, finance and insurance. We have began to develop our own big data system back in As at the Latest Practicable Date, we have accumulated statistics of key search attributes, for example, we had collected approximately 4.1 million keywords and phrases about vertical industries, including those mentioned above. For further details on our big data system, please refer to the section headed Business Our Big Data System of this [REDACTED]. Furthermore, we have an experienced sales and business development team that focuses on the needs and preferences of our customers. Our customer account management team works closely with our sales and business development team in order to better understand our customer s needs and guide our development and optimisation of our digital marketing solutions that meet those needs. As at the Latest Practicable Date, we had a total number of 23 customer account managers based in Hong Kong, Taiwan and the PRC, most of whom are well qualified and, in addition, our Group retains a low turnover rate in our senior management and customer account management team. Our employees stability enables relevant personnel to develop in-depth industry knowledge for the efficient and effective operations of our Group. 97

5 By leveraging data analysis through our big data system and the use of digital marketing optimisation tool, our sales and business development team together with our customer account management team are provided with the opportunities to gauge relevant vital statistics, in relation to number of impressions, number of clicks, CPC, click-through-rate and ranking about each vertical industry which our customers operate in. We believe that such data in our big data system enables us to better understand the key traffic drivers of a particular industry so that we can improve precision and effectiveness, the placement of our customers advertisements and thus ultimately drive up our customers return on investment. With the effective implementation of our big data system and the use of digital optimisation tool, we were able to achieve a lower cost of service and achieved a gross profit margin of 55.0% and 61.3% for our performance based business during the two years ended 31 March We have a strong brand name as one of the leading digital marketing service providers in the digital marketing industry in Hong Kong that drives growth of our business According to the Ipsos Report, we ranked second among all digital marketing service providers in Hong Kong in terms of revenue for the year ended 31 March Our management also regularly acts as guest speakers at seminars and forums, including those organised by Hong Kong Trade Development Council and Hong Kong Productivity Council relating to digital marketing services. During the Track Record Period, we have received awards, including the Search Agency of the Year Award Gold and the Search Agency of the Year Award Local Hero in 2016 by Marketing Magazine, a parameter of digital marketing service in Hong Kong; the Greater China s Most Reliable Search Engine Marketing Solutions in 2016 by Mediazone, a major player in the publishing industry; Direct Marketing Agency of the Year Award Gold and Direct Marketing Agency of the Year Award Local Hero in 2015 by Marketing Magazine; Greater China s Most Innovative Digital Marketing Solutions in 2015 by Mediazone, in recognition of our digital marketing services. We believe that these awards and industry recognition promote our brand image, which attracts many of our customers in approaching us and engaging us for their digital marketing campaigns. 98

6 Well-established relationship with our digital marketing partners, our suppliers We have long and well-established relationships with our major suppliers, most of which are international digital marketing partners, including many with whom we have over 10 years of business relationships. We believe that our reputation in the industry and the quality of our services help us build close relationships with our digital marketing partners which in turn enable us to procure the necessary services and support when we require them, to obtain the latest technical know-how and reduce the risk of any disruption in our services. This in turn helps to ensure that we are able to provide our customers with quality services and to keep up with the prevailing market trends. Our Directors are of the view that industry recognition increase our market visibility and enable us to maintain close relationships with other players in the market and attract potential digital marketing suppliers as well as customers. Such brand recognition also helps us to attract talents and enables us to further improve the quality of our services and competitiveness. Strong and diverse customer base in Hong Kong with an expanding business in the PRC, Taiwan and Macau We have a strong and diversified customer base, comprising a variety of vertical industries including e-commerce, travel and hospitality, education, beauty and health, banking, finance and insurance. We also have good relationships with our customers, including many with whom we have over 3 years of business relationship. We have a long operating history that dates back to June 1996 and had been focusing on the Hong Kong market until February 2001 when we opened up our first wholly owned subsidiary in Shenzhen, the PRC. Subsequently, we established our wholly owned subsidiary in Macau in November 2011 and our Taiwan branch in June During the Track Record Period, our revenue was mainly generated from our customers located in Hong Kong, the PRC, Taiwan and Macau. 99

7 The following table sets forth our revenue attributable to our customers based on the locations in which they operate, respectively, during the Track Record Period: For the year ended 31 March HK$ 000 % HK$ 000 % Revenue attributable to our Hong Kong-based customers 49, , Revenue attributable to our PRC-based customers 64, , Revenue attributable to our Taiwan-based customers 3, , Revenue attributable to our Macau-based customers Revenue attributable to our other customers based in other jurisdictions , Total: 117, , Our ability to continue to gain new customers and maintain our diverse customer base in Hong Kong, the PRC, Taiwan and Macau is mainly attributable to our expertise in vertical industry based technical know-how and proven track record in developing digital marketing solutions to meet the objectives of our customers. Our Directors believe that, with our further development in customer base and business expansion in Hong Kong, the PRC, Taiwan and Macau, we are well positioned to benefit from the increasing demand for digital marketing services in Hong Kong, the PRC, Taiwan and Macau. We believe that our diversified customer base enables us to expand our big data system and to make better use of the digital marketing optimisation tool which allows us to better cater our digital marketing strategies and to have a deeper understanding of the preferences of the target audience of our customers. 100

8 We have an experienced management team and resourceful and seasoned employees We have an experienced management team led by our founders who are also our executive Directors, namely Mr. CK Chan, Ms. SN Chong and Mr. CW Chan, each of whom has accumulated around 20 years of experience in digital media and in the digital marketing industry. Their vision and insight into the digital marketing industry have significantly contributed to our success. For biographical details of our Directors and senior management, please refer to the section headed Directors, Senior Management and Employees in this [REDACTED]. By combining our management team s capability in implementing growth strategies and our in-depth knowledge in the digital marketing industry, we are able to assess market trends, understand the needs of our customers and provide specialised services and digital marketing solution to our customers as well as to ensure the quality of our service and our management team is confident that our Group is poised to capture potential market opportunities in the evolving digital marketing industry in Hong Kong, the PRC, Taiwan and Macau. We adopt a market-driven remuneration structure that rewards performance and results. Through the providence of external training programmes and in-house workshops, our employees are able to gain a better understanding and adapt to the latest market trends, while equip themselves with the necessary job-specific skills so as to enhance their overall efficiency. We adopt internal policies in terms of operational guidelines, pricing and quality control to guide our employees and to ensure the quality of our services. We attribute our success to our ability to attract, incentivise and retain experienced personnel as well as to enhance their expertise. Our Directors believe that the training programmes, in-house workshops and internal policies will improve the quality of our service and are beneficial to our business development. STRATEGIES Our principal business objectives are to achieve sustainable growth in the digital marketing industry and enhance our overall competitiveness and market share. We intend to achieve our business objectives by pursuing the following business strategies: Maintain and strengthen our market position by continue to expand customer base and business operations We plan to strengthen our market position in the digital marketing industry by continuing to expand our customer base and business operations. We will keep track of the latest trends across the sectors in which our customers mainly operate in, which allows us to provide tailor-made digital marketing solutions with respect to the prevailing market trends and have a better understanding of the preferences of the target audiences of our customers and maintain the quality of our service. 101

9 We intend to expand our sales and business development team by hiring additional staff at our offices located in different jurisdictions in stages to expand our capability to provide our digital marketing services to potential new customers including advertising agents and brand owners operating in vertical industries including, e-commerce, travel and hospitality, education, beauty and health, banking, finance and insurance. We also intend to expand our business to other industries and jurisdictions in which our potential customers operate in, such as retail and technology. With the view to link up outbound customers, we have established regional offices in Shenzhen in February 2001, Macau in November 2011, Guangzhou in September 2012, Taiwan in June 2013 and Shanghai in August 2015 and have devoted additional resources for the recruitment of talents and expansion of employees. We also began to utilise one of the largest digital marketing platform of a digital marketing partner in Russia in October 2014 and another major digital marketing platform of a digital marketing partner in Korea in August During the Track Record Period, we have also recruited Japanese, Korean and Russian native speakers to join our sales and business development team. We intend to hire additional staff with relevant experience and background in other jurisdictions in our Hong Kong office to support our business growth in the provision of our digital marketing services to potential outbound customers. To maintain the quality of our service, in particular our performance based contracts and our relationships with existing customers, we intend to expand our customer account management team by hiring additional customer account managers at our offices located in different jurisdictions. We intend to assign our customer account managers to focus on managing customers operating in certain vertical industries to expertise their digital marketing skills towards particular industries, to sustain loyal customers and to grow revenue from our existing customers. Enhance our digital marketing technology system to support our business growth We intend to enhance our digital marketing technology system, which can be divided into three key components, namely, our enterprise resource planning system, our big data system and digital marketing optimisation tool. For details, please refer to the section headed Business Information Technology in this [REDACTED]. We plan to recruit additional staff including system analysts, programmers and system testers to firstly, identify and collect data of latest trend and features in digital marketing descriptions and structures for QS optimisation and workflow enhancement. We also plan to design ways to enhance our existing optimisation module and developing new features for our digital marketing technology system including: further enhance and expand our big data system including but not limited to: (a) expanding our collection of data across (i) different channels and publishers; (ii) locations; (iii) different devices such as mobiles and tablets; and (iv) different vertical industries in which our customers operate in; and 102

10 (b) expanding the collection of data to support multi-languages analysis; enhance our digital marketing tool to deliver more appealing advertising message to target audience, with differences in terms of geographic, demographic, personality and interests, by integration with digitial marketing platforms in various vertical industries. By enhancing and developing new features of our digital marketing technology system, we aim to improve the efficiency of price quotation, predictive function, attributes suggestions and campaign optimisation and in the longer run to replicate such system to our Taiwan branch office and our PRC subsidiaries and to establish an internal digital marketing know-how library. We further plan to purchase around two vertical ad network licenses to enhance traffics and the precision of audience targeting, with the goal to improve performance of our digital marketing campaigns. We may expand by opportunistic and strategic acquisitions of business and/or companies We may consider opportunities to acquire companies and/or businesses which are primarily engaged in the digital marketing industry that complement our existing business to expand our contracting capacities. We shall pay particular attention to targets located primarily in Hong Kong and Taiwan because we already have sizable operation in those locations. We believe that pursuing these opportunities could enhance our competitiveness and further solidify our market position. The criteria for selecting potential targets include one or more of the following: their reputation with a business nature similar to ours, customer base and valuation of around approximately HK$40 million. We will carefully consider and evaluate each potential acquisition on its merits to ensure that our existing business platform will derive appropriate benefits. As at the Latest Practicable Date, we have not identified any suitable investment target and have not contacted, nor have we been contacted by any potential vendors. FUTURE PLANS Please refer to the section headed Business Objectives and Future Plans Implementation Plans in this [REDACTED] for a detailed description of our future plans. 103

11 OUR PRINCIPAL Headquartered in Hong Kong, we are a digital marketing service provider, primarily engaged in the provision of digital marketing services. Our mission is to help brand owners to acquire, maintain and retain customers via digital marketing platforms including search engines, website, social media platforms, mobile site and apps. In particular, mobile advertising is increasingly popular as more mobile devices such as smartphones and tablets have full internet browsers. According to the Ipsos Report, the internet penetration rate of Hong Kong increased from approximately 72.2% in 2011 to approximately 74.7% in 2015 and it is expected to reach about 75.9% in The mobile penetration rate in Hong Kong increased from about 163.0% in 2008 to about 228.7% in In respect of mobile users in the PRC, the mobile penetration rate increased from about 13.0% in 2011 to about 50.9% in To keep abreast of the latest market trend, we began to utilise an internet and mobile platform of a digital marketing partner originated in Korea in Depending on the objectives of our customers such as advertising agencies and brand owners, we provide tailor-made digital marketing solutions mix which may comprise of (i) search engine marketing; (ii) search engine optimisation; (iii) display advertising; (iv) social media marketing and/or; (v) video advertising to meet their respective specific needs. A brief description of each of the components which our digital marketing solutions mix may comprise of is as follows: Search Engine Marketing Search engines are one of the most common tools used by the general public nowadays to find and locate information on the Internet and via mobile devices. With the specific keyword or term entered in the user query box of a search engine, the search results are typically presented in a line of results which have two general types (i) natural, meaning that the results are retrieved by the search engine s algorithm or (ii) sponsored, meaning that the results are paid advertisement. The visibility of the websites or mobile sites on the sponsored line of results are determined by various factors including relevancy, the price bided on the keywords, target market and QS. Generic terms and keywords that are most commonly used by the search engine users in their query or specific terms that are most relevant to a product or service generally have a higher bidding price. The more relevant an advertisement and landing pages are to the target user s query the higher the QS. Having higher QS can lead to lower advertisement placement prices and better advertising position, thus the cost-per-acquisition will be lowered. Our search engine marketing service aims to optimise the visibility of our customers websites or mobile sites on the search engine results page to their targeted audience, and thus achieve a higher conversion rate in terms of qualitative measures such as number of sales lands, installations and registrations converted from the clicks at a lower cost. Our skilled and experienced customer account management team, our big data system together with the use of digital marketing optimisation tool, enable us to formulate relevant and common terms and keywords that the target audience may use as search terms when they are looking for a product or service, and to track the prevailing market trends. This also enables us to fine-tune our strategies to meet the marketing objectives of our customers. 104

12 Search Engine Optimisation We provide search engine optimisation service to our customers to optimise the visibility of a website in a search engine s natural results. In general, if a website is ranked higher on the search results page, and more frequently a website appears in the search results list, the more visitors will enter the website and these visitors may be converted into consumers of the advertisers. We aim to help our customers websites to rank higher in natural search results by improving the wireframe, inbound links, outbound links, coding, landing page, relevancy of the keywords and terms of the websites so that our customers can reach and deliver the contents to the target audience and increasing the visibility of our customers websites by securing a more prominent natural search ranking. Display Advertising Ad-networks connect thousands of websites, mobile sites and social media platforms or apps that can host advertisements, and aggregate advertising space supply and match the demand of a potential advertiser. They are platforms which allow potential advertisers to bid for a particular advertising space on a specific website, mobile sites, social media platforms or apps. Our display advertising service aims to assist our customers to use a lower price to procure an advertising space with optimal exposure to the target audience. Our customers usually provide us with the advertisements to be placed. In some circumstances, our customers may also request us to advise on the format of the advertisements to enhance the attractiveness of the advertisement to the target audience. We analyse the target audience segments by vertical industry and place the advertising budget and bid targeting (i) the most suitable geographical location, interests, topics and demographics of a fixed group of websites or mobile sites and social media platforms users; (ii) a variable group of platform users which may potentially become our target audience depending on their actual Internet activities and habits within a particular period of time; and (iii) various time slots of each advertising space, in order to procure advertising spaces which are less expensive but comparatively effective in reaching the target audience. Social Media Marketing By utilising the unique environment and features of social media platforms which allow individuals and businesses to distribute content, share, comment and interact online, our social media marketing service aims to provide our customers with a plan to reach out their advertisements on social media platforms that is more appealing to their target audience. We enhance the receptiveness of the target audience to the advertisements content, to fulfill brand building or lead generation objectives. Our customers usually provide us with the advertisements to be placed. In some circumstances, our customers may also request us to advise on the format of the advertisements to enhance the attractiveness of the advertisement to the target audience. We arrange for advertisement placements on social media platforms for an agreed number of clicks or impressions, and we would periodically review our strategies and report to our customers throughout and after completion of our engagement. 105

13 The procurement of advertising space on social media platforms usually involves a bidding system with the advertisement which processes a higher total value would be more likely to successfully bid the advertising space. The total value of an advertisement depends on a number of factors including the quality and relevance of the advertisement. Our social media marketing service aims to lower the bidding price to procure an advertising space with optimal exposure to the target audience. We analyse the target audience demographics and place the advertising budget and bid targeting (i) the most suitable age range, gender, geographical location, interests and education backgrounds of a fixed group of social media platform users; (ii) a variable group of social media platform users which may potentially become our target audience depending on their actual Internet activities and habits within a particular period of time; and (iii) various time slots of each advertising space, in order to procure advertising spaces which are less expensive but comparatively effective in reaching the target audience. Video Advertising Video advertising in general involves placing a video on video sharing websites, mobile sites and social media platforms. Our customers usually provide us with the advertisements to be placed. In some circumstances, our customers may also request us to advise on the size and format of the advertisements to enhance the attractiveness of the advertisement to the target audience. We arrange for placement of video which appears during or before the viewers watch a chosen video clip on video sharing websites and we review our strategies and report to our customers throughout and after completion of our engagement. The publishers of video sharing websites, mobile sites and social media platforms usually charge an advertiser (i) after a viewer has watched a certain duration of the video advertisement or (ii) when a viewer chooses to watch the advertisement by clicking a link. The cost-per-view fluctuates based on factors including the length of the advertisement, creative quality and the targeting and bidding dynamics. Our video advertising service aims to lower the cost-per-view for our customers by increasing the view rate. The trueview rate is the total number of views of the video advertisement divided by the number of times the video advertisement is shown. The higher the trueview rate in general indicates that the video advertisement is more compelling to the target audience. We aim to assist our customers to set the target audience group in terms of demographic, interests and targeting unique channels to enhance the trueview rate. OUR BIG DATA SYSTEM We have implemented a big data system back in In combination with our experienced sales and development team, our big data system helps us to enhance the efficiency of our operation and formulation of our digital marketing solutions that best fulfill the marketing objectives and needs of our customers. 106

14 We have built the big data system which collects and maintains records of the performance of keywords and phrases provided by most of our largest suppliers, being international search engines, Internet portal and social media platforms, across the various vertical industries and we were able to accumulate specific and relevant data including the following: the number of impressions and clicks as most of the digital marketing partners charge on a pay-per-click basis, these activity logs provide us with information on the number of times the advertisement, whether in the form of a banner or text link, is displayed to a viewer and the number of times a viewer has taken their cursor and clicked on the banner or text link and was taken to the designated website; the cost-per-click this is the actual monetary amount spent for each click and reflects the performance of an advertising campaign. The actual monetary cost for each click is determined by a number of factors including the QS. If a keyword is more related to the advertisement, the QS will be positively affected. A higher QS can lead to lower advertisement placement costs and better advertising position. Hence, a lower cost-per-click would ultimately be interpreted by advertiser as better return on its investment. the click-through rate the number of clicks an advertisement generated divided by the number of time, the advertisement is displayed. ranking the position of the advertisement which in general is determined by a number of factors including QS and bidding price. As at the Latest Practicable Date, we had accumulated information on approximately a total number of 4.1 million keywords and phrases about a variety of vertical industries such as e-commerce, travel and hospitality, education, beauty and health, banking, finance and insurance in our big data system. We utilise these data to capture and analyse a variety of advertising activities, including number of impressions, number of clicks, CPC, click-through rate and ranking. We also utilise the advertising reporting and targeting function of the digital marketing optimisation tool to enable us to set certain traffic and targeting criteria such as demographic, geographic, day and time, to deliver and report on our digital marketing campaigns throughout a project. Leveraging on our big data system and the digital marketing optimisation tool has enabled us to continuously optimise our digital marketing solutions in an efficient and effective manner. Our experienced sales and business development team and customer account management team are able to identify trends and patterns of the performance of a keyword or phrase, filter out ineffective or poorly performed keywords or phrase to estimate costs of an advertisement placement to enable advertisers to better allocate their budget. With our periodical reporting, we can assist our customers to optimise their marketing objectives by advising on how to allocate their marketing budgets across a portfolio of our international digital marketing partners and to formulate more tactical campaign, in terms of targeting the relevant potential customer with the optimal message in a cost effective manner for a certain period of time. 107

15 REPRESENTATIVE PROJECTS UNDERTAKEN We have undertaken a diversified and extensive portfolio of marketing projects of our customers since our commencement of business as a digital marketing service provider. The followings are some of the representative projects undertaken by us: Project A Customer An international fashion brand managed by a major brand management and (Note 1) distribution company in Hong Kong, PRC and South East Asia Duration of the project Approximately two weeks Background and objective To strengthen the brand exposure to the target audience of our customer To promote a new season of design and clothing to the target audience of our customer Major scope of our digital marketing services display advertising social media marketing Delivered Results Generated over 2,000,000 impressions by the end of project Average click-through rate of the campaign is 6.7 times of the average benchmark of that social media platform; the click-through rate of the best performance campaign within the duration of the project is 7.6 times of the average benchmark Project B Customer A major beauty chain brand in Hong Kong providing body slimming and shaping (Note 1) services Duration of the project Approximately 6 months 108

16 Background and objective To increase online registration of services from target audience of our customer To engage target audience, thereby arousing their interest in the brand of our customer and their services Major scope of our digital marketing services search engine marketing display advertising Delivered Results Generated over 8,200,000 impressions by the end of project Generated over 10,000 web traffics by the end of project Generated over 5,000 repeated visits of website by target audience of our customers by the end of project Project C Customer An overseas centre covering the East Asian Region located in Hong Kong of a (Note 1) tertiary educational institution based in the United Kingdom Duration of the project Approximately 1 year Background and objective To increase website traffic in target regions of East Asia To promote academic and professional development programmes in the East Asian Region To increase the number of information seminar online registration and enrollment of the academic and professional development programmes Major scope of our digital marketing services search engine marketing display advertising 109

17 search engine optimisation Delivered Results Increased approximately 60.71% of the number of information seminar registration from target regions of Asia Reduced approximately 56.46% of the cost-per-acquisition in Hong Kong Reduced approximately 41.35% of the cost-per-acquisition of search engine marketing campaign Project D Customer A major chain travel agency in Hong Kong (Note 1) Duration of the project Approximately 10 months Background and objective To boost installation of the mobile application To promote travel package and information Major scope of our digital marketing services social media marketing display advertising Delivered Results click-through rate approximately doubled approximately 8.61% decrease of cost-per-installation of the mobile application approximately 36% increase of impressions Note 1. Such client was not our five largest customers for each of the years ended 31 March 2015 and

18 WORKFLOW OF OUR ENGAGEMENT The following chart sets out workflow of our engagement, illustrating the key stages of our business operations, including identifying the customer s objectives, prepare proposal, the signing of contract, the execution, monitoring and fine-tuning of digital marketing services and reporting throughout and upon completion of our engagement against its timeline: Identify customer s objectives and needs by phone conversion or meeting Prepare proposal and quotation with reference to our big data system Fine-tune proposal and quotation deemed necessary Receive signed contract from customers Input contract information into our enterprise resource planning system Assign the customer to a customer account manager Customer account manager contacts the customer for briefing Prepare digital marketing campaign plan, keywords and advertisement copy for customer s confirmation Campaign set up and target segment setting on advertising platform Launch of digital marketing campaign On-going optimisation and storing of data in our big data system Send report to customer upon completion of campaign or as agreed with customer Arrange review meeting with customer where necessary Note: The execution process varies according to the various components of our digital marketing solutions mix, for illustrative purposes. Please refer to the section headed Business Workflow of our Engagement Initial Stage Objectives identification/formulating pitching proposal set out below for the process of a typical project. Initial Stage Objectives identification/formulating pitching proposal Each of our projects typically starts with identifying our customers marketing objectives by considering the characteristics of the customers products or service, the target audience and the outcome they wish to achieve including branding, the number of clicks, impressions, trueviews, registrations, installation and sales lead. Although our potential customers may approach us directly for a specific type of digital marketing services, our sales and business development team would generally, based on our potential customers overall digital marketing needs, prepare pitching proposals for digital marketing services mix covering a combination of the different components of our digital marketing services in order to provide our potential customers with a comprehensive digital marketing strategies. 111

19 In deciding as to whether we take on a potential project, our sales and business development team will usually take into consideration principal factors such as prices, our relationship with our customers, size of the project, nature of project, timing and complexity. If having considered the above factors, we consider that the potential project is in our Group s financial interest and capability, we will prepare and issue a proposal to our customers. If our potential customers approve our pitching proposal and agree to enter into a contract with us, we will allocate resources in accordance with the service scope under the contract. The contract between our customers and us will normally set out the duration of the project, the breakdown of the type of digital marketing services to be provided by us, the total price for the services, our standard terms and conditions and payment terms. These data will also be entered into our enterprise resource planning system. Whilst the proposal for our services includes the preliminary costs of the services to be carried out, it is often the case that there are fine-tuning of the overall digital marketing solutions which may affect the overall cost of service. Any changes to the agreed costs will require prior approval by our customers. Execution, monitoring and fine-tuning of digital marketing service Depending on the type of service(s) involved of the digital marketing services mix, our customer account management team will be responsible for the execution and quality control of our service. The key work stages of our digital marketing service as illustrated by some of our typical digital marketing service mix are summarised below: (a) Search engine marketing We advise our customers to formulate keywords or phrases related to the brand or product or services of our customers based on the data analytics performed using our big data system, digital marketing optimisation tool and the information provided by our customers with the aim to optimise the visibility of our customers websites on the sponsored search engine results page which meets with the budget of our customers. With the approval from our customers, strategies with reference to the marketing objectives and budgets of the customers will be executed by our customer account management team to purchase designated keywords and the associated advertising space at the search engine results page. The process is an ongoing process as we are able to change our strategies at any time and periodical analysis will be conducted to ensure the effectiveness of our search engine marketing services. (b) Advising on digital marketing strategies and digital marketing placements We assist our customers to procure advertising space, with reference to the target audience, budget and marketing objectives of our customers. For display advertising placements, our customer account management team will first check the availability of the advertising spaces and rates for the selected websites, apps and mobile sites. For social media marketing placements, we formulate and implement strategies to procure the advertising space likely to appeal to our target audience 112

20 and social media marketing formats on various social media platforms for our customers. Once the advertisement content has been created, usually by our customers, our customer account management team will perform a review against the relevant policies of the selected websites, apps and mobile sites for publishing such content. For further details, please refer to the paragraph Business Quality Control of this [REDACTED]. Upon the internal review, we would obtain the final approval from our customers prior to placing the relevant advertisement in accordance with the agreed number of impressions displayed to the websites, apps and mobile sites through the Ad-networks and social media platforms (as the case may be) under the contractual agreements between us and our customers. Reporting throughout and upon completion of our engagement We closely monitor the performance of our digital marketing strategies throughout our engagement because our Directors consider that the effectiveness of our digital marketing services is integral to our provision of quality services. Monitoring and analysis of the performance of our digital marketing services through our big data system and the use of digital marketing optimisation tool not only serve as our means in fine-tuning our services but also to enable our customers to measure and evaluate the efficiency of their marketing strategies. Based on our analysis of the data collected during the monitoring process and stored in the big data system and the use of digital marketing optimisation tool, our customer account management team regularly discusses project status internally and with our customers by preparing progress reports to our customers usually on a monthly basis. The progress reports typically include the number of clicks and impressions and conversions generated from the placement of the advertisement and the costs-per-click and screen caps of the digital advertisements as displayed on websites, throughout our engagement, so that we can promptly fine-tune and further improve our marketing strategies. Depending on the performance of the marketing strategies and the digital marketing objectives of our customers, we may propose a revision of the scope or combination of digital marketing solution mix, such as the re-distribution of our customers remaining budget and the integration of additional types of digital marketing solution in order to further enhance the effectiveness of our digital marketing solutions by improving the precision of an advertisement and driving up our customers return on investment. Upon completion of our engagement, a post completion review detailing our services provided, the resulting performance and our overall advice will be sent to our customers for their evaluation. MAJOR QUALIFICATIONS AND LICENCES Our Directors confirmed that our Hong Kong, PRC and Macau subsidiaries and our Taiwan branch office are not required to obtain any industry-specific qualification, licence or permit for carrying out our digital marketing services in Hong Kong, PRC, Macau and Taiwan respectively. 113

21 SALES AND MARKETING Sales and business development team As at the Latest Practicable Date, we had a sales and business development team of a total of 26 members located primarily in Hong Kong, the PRC and Taiwan. These sales and business development staff, who are responsible for contacting existing suppliers and potential suppliers, existing customers and potential customers for the sales of our services, are also responsible for answering potential customers enquiries and following up with the attendees of the seminars forums and workshops organised by us to the interested parties in the public. In addition to basic salaries, we also offer commission incentives scheme to our sales and business development team. In general, commission for each sales and business development employee is calculated based on a certain percentage of either the net revenue or the revenue received by our Group depending on if it is a fixed rate based on performance based contract and the role of the employee. For the years ended 31 March 2015 and 2016, commission paid to our sales and business development team represented approximately 5.4% and 3.7% of our employee benefit expense, respectively. Product development and marketing team Our product development and marketing team is responsible for the promotion of our brand, as well as for conducting research to keep abreast with the latest market trends and news regarding the digital marketing industry including the range of digital marketing solutions mix and researching on ways to enhance our big data system. Our product development and marketing team regularly conducts marketing seminars, for our customers and potential customers to inform and update them with the latest service provided by us in collaboration with our suppliers and our digital marketing services capabilities. They also issue internal memorandums and reports to our sales and business development team to keep them updated with the latest technological development in the digital marketing industry and latest industry trends. We also keep our existing and potential customers informed of our recent developments by distributing materials in relation to our background and project portfolios. We also participate in other industry-related seminars and forums in order to promote our services and products and to keep up with the relevant development trends of our industry. For the years ended 31 March 2015 and 2016, our advertising costs amounted to approximately HK$1.5 million and HK$2.5 million, respectively. Going forward, we intend to allocate resources to set up a research and development team to specifically strengthen our research and development capabilities. Tendering From time to time, we are involved in tendering process, in particular when the marketing campaigns involve public bodies. 114