1. TV ad spend is declining. But there is growth…
Year on year, TV ad spend has declined by 3.7 percent. Traditional media—including TV, newspaper, magazine, traditional outdoor and transport video—declined more steeply at 6 percent. New media, on the other hand, showed stable increase—with double-digit growth for internet, building LCD, lift poster and cinema video media. Under the auspices of the mobile age, internet advertisements increased 18.5 percent. But the whopping growth was seen in outdoor media—building LCD, lift poster and cinema video advertisements grew by 22.4 percent, 24.1 percent and 44.8 percent respectively.
2. Brand communications evolve towards mobile and passive flow
Consumers spend four to five hours on their mobile phones a day—and it’s increasing. The consumer benefits include the ability to browse content at will, and it also affords them the ability to selectively neglect advertisements. What this means for brands is that content marketing will be key to fusing trending social topics with brand messages to create synergy—even as consumers experience content fatigue. Information overload and proliferation of choice are a huge barrier to effective brand communication.
Lifting ideas—grabbing attention in routine life settings
3. New economics = new consumers
In 2016, consumer goods such as beer and instant noodles saw declines but mid- and high-priced products such as yoghurt and pet food had continued growth. This proves consumers were ready to pay premiums as they upgraded to higher quality purchases. Three groups of consumers drove the higher consumption of the mid- to high-priced items—high-net worth individuals who seek quality and brands, new social personalities who boldly try new products, opinion leaders and reputation champions who delight in sharing new experiences with their networks.
This represented the rise of a new economic group—the ‘Urban Mainstream’. And this group’s media habits aligned closely to the internet and Focus Media’s target group—20-to-45-year-olds with a monthly income of more than Rmb 5,000. According to CTR data from China National Resident Survey (CNRS), more than 81 percent of this benchmarked group was exposed to Focus Media weekly—second only to the 92 percent who were exposed to the internet weekly.
4. TV isn’t reaching the Urban Mainstreamer
We are now strongly immune to advertisements. And only important events such as G20, or the Olympic women’s volleyball team championship, can be recalled with ease. For OTV advertisements, the winning bets were on popular TV series Descendants of the sun, Ode to joy and The mystic nine. But because users could choose to buy a VIP service and finish watching all the episodes without commercial breaks, few brands really benefitted.
The passive and active information model continues to shape communication—and Urban Mainstreamers continued to shift their media consumption patterns. This group does not watch TV, even when phenomenal blockbusters are on (above TV ratings of 4 percent)—only 2 million to 6 million out of that potential 40 million are Urban Mainstreamers. This is especially true of those in first- and second-tier cities, where audience ratings have constantly decreased.
5. Influence Urban Mainstreamers with OOH
Although mobile usage is at an all-time high, the fragmented nature of the medium almost guarantees poor recall. And brands have a harder time achieving multiple touchpoints and the reach they need to see significant conversions. To achieve this, however, brands should consider extending their OOH media investments as these represent an opportunistic grab at attention spans. With Urban Mainstreamers unreachable on TV, routine life settings like office buildings, apartment blocks and cinemas—which expose more than 200 million Chinese every day—become micro-moments for intense repetition of advertisements, a strategy that can be useful when you’re looking for consumers who are upgrading their purchases.
Cindy Yan Chan is chief strategy officer at Focus Media