Business / Advertising boom

Changing landscape of advertising

By Troy Hakansson (China Daily) Updated: 2012-09-07 10:23

Brands must learn to judiciously use digital, traditional media platforms to succeed in China

When we break down the components of great advertising, we have two key factors. A message that engages and motivates the consumer combined with a medium that is selected to effectively target the desired consumer, with as little wastage as possible.

In the years since China opened up, Chinese companies have learned from the West how to produce slick and creative advertising. Western marketing and media companies have been lured by the lucrative opportunity to bring their advanced approach to developing great branding and communications to China, in turn bringing tantalizing product propositions directly into the lives and living rooms of the Chinese masses.

China now produces advertising as polished as any other country. But it is within the continually evolving media sphere in which we see an explosion of opportunities to more effectively target the consumer, largely driven by new technology.

The tech-savvy youths and adults in China represent a huge potential audience, who are both comfortable and engaged with all kinds of new technology. The continuing fragmentation of the media landscape makes for a complicated maze of options for the average consumer, but it can be helpful to marketers to understand and target their desired consumers more effectively. While China traditionally learned from the West in terms of creating advertising practices, in the brave new world of digital media China can be a leader.

Some of the most successful Chinese online social media platforms are built on the adaptation of Western ideas. Weibo and Renren are two good examples of online platforms, using the basic model of Twitter and Facebook respectively in China.

Given the unique online ecosystem that has evolved in recent years in China, any brand wishing to successfully engage and communicate with Chinese consumers need to consider how to build in the right mix of traditional media such as TV, print and radio, combined with digital advertising techniques such as social media and online advertising and new media channels that are targeted towards reaching multiple screens such as smartphones, tablets and desktops.

Investment in digital advertising are increasing, even if it is still small compared with traditional TV advertising. Ad spending in China continues to grow at enviable levels compared with more developed markets. Ad spending in China is estimated by eMarketer, a digital intelligence consultancy, to reach nearly $53 billion (42 billion euros) by 2013, an increase of 14 percent on 2012, while worldwide annual growth is expected to be 6 percent.

It is in new digital forms of media and analysis that local Chinese companies could look to take leadership, driven by their knowledge of the nuances of the emerging digital media scene. Their knowledge would be helpful to foreign companies trying to navigate the maze of new media options in China, such as social media, interactive online TV, data mining or mobile advertising.

My company, Millward Brown, offers a good example, having recently invested in Moment Systems and forming an alliance with a leading local company to further develop and provide digital advertising measurement to advertisers and their agencies. Moment Systems and Millward Brown combine their expertise to provide the market with digital advertising measurement systems, and work together to develop new digital research and planning solutions.

No doubt the most significant and exciting development in China will come from the increased use of smartphones. Figures from iresearch show China smartphone shipments increased 103.1 percent to 72.1 million in 2011. It forecasts this number will reach 113 million this year, 56 percent increase on last year.

According to research from CNNIC, an important tipping point has already occurred, with more than 388 million mobile Internet users recorded in June this year. Mobile Internet users in China finally exceeded desktop Internet users who number slightly more than 380 million.

Marketing directors will always be guarded about their media allocation, while advertising and media vendors may stand to potentially loose out from a decrease in their core revenue streams from a shift away from traditional media. However, all the anecdotal evidence points to an inevitable continuation of the shift towards new digital media channels, especially when marketing budgets are being squeezed by the global economic climate.

As a key growth market, foreign marketing and communications companies in China may look to make acquisitions to keep pace with the development in the market and also nurture local clients who are increasingly marketing-savvy, and represent a key growth opportunity in China. The smart foreign marketing and branding companies can jump on the digital bandwagon and try to assist in Chinese company's ambitious plans to expand into overseas markets, in which they can leverage their global networks and expertise.

Ultimately, traditional media will always have its place, but there is increasing necessity to utilize digital media platforms. The best marketing campaigns will not look at these two components as separate parts of the media mix, but instead understand how to best combine all these media channels to form a single integrated marketing campaign.

The author is an associate account director at Millward Brown in Beijing. The views expressed are not necessarily those of China Daily.

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