Bryce Whitwam
Jun 1, 2022

China's media business future involves more fragmentation, specialisation

SHANGHAI ZHAN PODCAST: Former OMG Greater China Group CEO Doug Pearce, and the founder of cross-border agency SparkX, Jun Yuan, expect the China media market to morph into an integrated multi-services model that will eventually decouple media buying from the core offering.

China's media business future involves more fragmentation, specialisation

"With more automation and greater prevalence of large, integrated, platforms, the media buying piece of the media agency business is going to change," said China media consultant and former OMG CEO Doug Pearce.

"But this is good news for the agencies because it will help them to prioritise and provide better strategic value to their clients. China media agencies are often still tied down by their legacy businesses."

Pearce sees China continuing its course of moving away from a buyer's market into a seller's market, and, as a result, media agencies will have to adjust their service offerings, particularly for key opinion consumers (KOC). "In China, KOCs will have a bigger future than KOLs because it's simply a better way to get the consumer message out," he said.

One differentiating facet of the Chinese media landscape compared to its Western counterpart is using a brand's own first-party data. "Brands in China are moving quicker than the West on building first-party data solutions," said media agency SparkX's founder, Jun Yuan. "Because they have the flexibility of building customised solutions, while in the West, there tends to be a single standardised solution."

Yuan sees China-based media agencies growing their outbound services as Chinese brands continue to seek growth markets abroad. According to a 2021 GroupM business intelligence analysis, brands in China now account for as much as $10 billion in advertising buys on Facebook.

But they are very performance-driven. "Outbound China brands have the capabilities to compete with global competitors, but with some exceptions, such as Shein.com, Huawei, and Vivo. They still don't have the mindset to move away from their ROI-focused mentality," said Yuan.


Doug Pearce and Jun Yuan’s full interview is available on the Shanghai Zhan podcast, a "raw, lively, and regular debate about China tech, advertising, creativity and the intersection of it all", hosted by Ali Kazmi and Bryce Whitwam.

The podcast is now available now on Apple PodcastsSpotifyGoogleStitcherAmazon Music, Xiao Yu Zho and via RSS.

 

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