Shann Biglione
Jan 20, 2016

Five China media trends you'll start to hear in boardrooms

Forecasting trends for mainland China is a risky business given the pace of evolution among media and consumers, but ZenithOptimedia's Shann Biglione has a few of note.

Five China media trends you'll start to hear in boardrooms

There are global trends, like instant messaging for brands becoming huge in 2016, that sound like old news in China, with WeChat already established for a while now. And as China is one of the fastest evolving markets, it is always a little arbitrary to pin down key trends.

Moreover, not every business is equal. Certain brands have made progress on a few of these trends in 2015 already, while others might not find them at all relevant. But at the very least, we expect to hear about these trends increasingly in boardrooms and conferences, and hope this short list will provide food for thought.

Trend 1: The cost of data breaks a few banks

The focus on data in the industry is now clear and well established. We’ve seen major advertisers and agency networks partner with digital data giants from Baidu, Tencent and Alibaba, and the growth of programmatic buying has put more emphasis on data collection and analysis.

But more and more groups are realising that big data doesn’t come free—quite the opposite.

To fully realise its potential, data needs vast amounts of indexed and tagged data points, often stacking multiple databases. If only we always knew exactly what we were looking for, it would be easy, but things become truly invaluable when we connect dots we couldn’t foresee (something machine learning is helping accelerate), and when we can keep track of changes over time.

Here’s the catch: this requires us to store huge (unreasonable?) amounts of data, far beyond most companies’ capabilities. What is of value today might not be of value tomorrow, and vice versa. A lot of brands will wake up to the reality that data is not as ubiquitous as they’d like it to be (and often behind paywalled gardens owned by the data giants), and if they’re serious about it, they’ll require security systems to protect it that come at a substantial cost.

The theory of big data is a lot easier than its practice, and what will define the winners is not just the ability to think strategically about it, but the tactical ability to deliver on it. This is something the big-data players are very aware of, and building monopolistic empires around. And so we will see an increasing number of partnerships announcing brands relying heavily on data provided by the likes of Tencent, Alibaba, or Union Pay—the only companies who have a real trove of consumer data. But these groups know very well that running this data is costly, and will incentivise brands to use their data within their own ecosystems (i.e. use Tencent data to buy on Tencent advertising networks).

This will likely create inequalities in terms of access to data (reserved to the bigger payers) and ability to use this data within environments the data providers will favour. In 2016, data will probably be more available, but not necessarily more accessible.

Trend 2: Paying for content is the new black

Although subscription models are fairly common in some markets, Chinese consumers have a fairly extensive tendency to favour free things. But this only works when there is something else paying for it—often through advertising. As the use of ad-blocking grows and publishers are faced with ongoing pressures to monetise inflationary pieces of content, China might finally get to a stage where a big enough pool of consumers is ready to pay for the content they consume. This is one of the few areas where China lags behind other countries.

The reality is that monetising free, open platforms makes the investment in content both essential and dangerous: you need to spend a lot of money to get the right content, and yet there is no guarantee users will stay on your platform after watching it. When Netflix produced its costly House of Cards, it at least had the safety of its memberships. And looking at Alibaba’s quest for content people are ready to pay for—something it has openly stated as a key area of growth since it purchased Youku Tudou last year—it’s not unlikely that premium memberships and pay-per-play subscriptions could become popular ways to build sustainable content businesses in China. There are times when advertising might not be enough for the publishers, and too much for the users, so we might find more premium models at the confluence in China.

For advertisers, this means that we should see further pushes towards tailored partnerships, whether in the form of sponsorships, product placement and even co-productions. Then, as premium shows increasingly slide behind paywalls, the pre-roll ad industry could slowly but surely shift towards more programmatic practices, chasing audiences in more show-agnostic manners.

Trend 3: A picture is worth a thousand keywords

Voice-based search has been all the rage lately, and even though it will still be a major trend this year (one that will no doubt require changes in our planning for search campaigns), we’re equally excited about the prospects of image-based search. In 2015, digital giants have made big steps towards making it a reality, both in the USA and China, with the likes of Google and Baidu claiming error rates under 5 percent. This year, we’re expecting this new way of discovering products to impact brands and advertising. It will push offline-to-online consumer journeys even further and strengthen the chances for smaller brands to be discovered.

From a practical perspective, brands will reinforce their distinctiveness to ensure their products are easily searchable and not misattributed, and provide an alternative to QR scanning in campaigns (a method often ridiculed in the West, but fairly popular in China). Because of the hypermobile behaviour of Chinese consumers, the 'Empire of the Middle' is probably the market where visual search could take off fastest, with consumers looking for products (where can I buy this style?), landmarks (tell me the history of the building), food (which is the best rated in town?).

It could also increase the volume of search queries by opening new search functionalities beyond the search engines, something that Baidu will be extremely focused on. For example, photo-sharing applications like Meitu or even WeChat Moments content could become new streams for performance advertising, especially if you consider the chance to search from historical databases and past galleries.

As for real-time image searches, it wouldn’t be surprising if in the near future phone manufacturers combine it with augmented reality to see results directly from your camera feed.

Trend 4: Time is up for impressions

For over 20 years, we’ve been buying digital display ads based on impressions, whether that impression lasted a blink of an eye or 20 seconds. This is somewhat manageable if what you’re after is a click, but considering 1 percent or less of banners are clicked on, it seems sensible to find ways to make the remaining 99 percent work for brands. In 2015, we’ve finally seen the viewability question become top-of-mind in an effort to transform impressions into genuine 'opportunities to see' (OTS). Although this problem is far from resolved—especially in China where third party ad-serving, a requirement to run viewability measures, is still seen reluctantly by most publishers—it’s taking the idea further.

After all, we pay a different price for a 30-second or a 15-second TVC. Why not focus our media investments on places that do more than dangle clickbait in front of fickle readers? The trend has already started in the US, where some premium publishers offer ad formats on a cost-per-second basis. We’re also seeing new mobile ad solutions applying the concept of Trueview to display, letting users slide away from the ad as they scroll through content, and only charging advertisers for the seconds the ad has been in sight.

All in all these formats help everyone: the publisher who gets to monetise better content, the reader who is less keen to click on a string of links, and the advertiser who gets a fair chance to make an impression. But it will require Chinese actors to coordinate their efforts: publishers will need to let go of their reluctance towards third-party ad-serving and viewability measures, agencies will need to rework their processes of buying and measuring impressions, and clients will need to be open to changing the way they benchmark their data and accept it will come at a cost. There are clearly hurdles ahead, and 2016 might, at best, be the beginning.

Trend 5: The beginning of the end for digital

The writing has been on the wall for a little while now, but voices calling for the death of digital specialties are getting louder. For a long time, these were seen as forward-thinking, but in a world where everything has become more digital, we hope to see the industry finally taking serious steps to erase the ever abstract distinction between digital and traditional media.

The segmentation is so ingrained that it will not happen overnight, but we expect every player to take steps towards more integrated organisations and P&Ls. Clients will increasingly remove the distinction in their briefs. Creative planners will be asked to plan for both branding and engagement. Media agencies will keep building more integrated planning tools. Media-tracking companies will be asked to redefine media channels in more meaningful ways. 

In 2016, integrating digital and traditional might not be as much a trend of the future as separating them will be seen as a sign of the past. China has already embraced this concept through the advancement of mix-reach planning for TV, and did it much earlier than other markets.

For brands, this means we are going to see some strong challenges for talent development and recruitment, while we should see more simplified KPI frameworks to measure campaigns. It’s also very likely that the question of weighting between “brand building” and “brand conversion” budgets will be more relevant than the digital/traditional split that has so far dominated briefs.

Shann Biglione is head of strategy of ZenithOptimedia China


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