Chinese consumers’ lifestyle and spending habits are evolving rapidly, opening exciting new opportunities for marketers who are ready to embrace Focus Media’s groundbreaking combination of outdoor video and cutting-edge data targeting.
Tying residential profiles with building-specific search data from Baidu, Focus Media has hit on a way to make its residential- and office-based video screens pay off in ways never seen before.
Focus Media’s first-quarter earnings report posted annual growth of 35 to 40 percent, says Cindy Yan Chan, Focus Media’s chief strategy officer, defying concerns over slowing economic growth in China and dramatically outperforming the mild growth exhibited by the country’s outdoor advertising sector in general. She says this is down to the emergence of a two-speed economy.
“The traditional economy is definitely slowing, but the new economy brought about by the upgrade in consumer services and the ‘Internet +’ technology is rapidly growing,” Chan says.
While outdoor advertising might on the face of things appear more suited to the “traditional” grouping, Chan explains that Focus has hitched its wagon firmly to the “new” economy train. The company has taken a well-established form of media and hard-wired it with the latest advances in data and technology.
Established in 2003, Focus Media has created a vast network of interconnected video screens and poster frames in public spaces across China. Located in entrance lobbies, elevators, shopping malls, cinemas, bus stops and other points where people tend to have a few of the precious idle moments in their day.
A partnership signed with Baidu last year has given Focus access to the internet giant’s building-specific search data, allowing it to pinpoint buildings where internet users have directly expressed interest in specific products and brands.
In the past, marketers could do little more sophisticated than to place adverts in all the buildings of a certain type or within a specified district. Bringing multiple data sources together means that blanket approach can be resigned to the dustbin of history.
“Every single building has different consumers with different needs and interests,” Chan says.
Competing for attention
Chan says there is a clear distinction between the ways active and passive media formats are being affected by societal and technological change. While active media—everything from TV stations to mobile internet access—has mushroomed in China, the prevalence of passive formats in the physical world has remained relatively stable.
“In the age of mobile internet, there is now just too much information, too much content,” says Chan. “People are drowning in messaging, making it harder and harder for adverts to be memorable. Too much choice is a huge problem.”
The sheer volume of media content available for Chinese consumers—anywhere and at any time—has turned them into choosy viewers with high expectations for the quality of content, setting a high bar for any marketing hoping to catch their attention via active media formats.
A recent study of consumers in 36 Chinese cities by CTR illustrates the effect that fragmentation has had on engagement levels. The study found that the chances of consumers being engaged with at least four different types of active media in a day—television, radio, newspapers, magazines or the internet—peaked between 2010 and 2011. The report found that daily multimedia engagement had fallen from a high of 40 percent to just 30 per cent last year. The decline was even more marked among younger consumers (under-35s), tumbling from 44 percent to 28 percent over the same period.
By contrast, consumers’ contact with passive media has stayed constant, as it is tied to the time they spend in specific physical spaces, which remains unchanged.
“People always need to come home, they still need to go to work, they still need entertainment, go to the cinema and to go shopping,” Chan says. “This actually accentuates the value of Focus Media, as China’s largest media provider in the lifestyle-space.”
Delivering relevant brand messages through passive formats at these momentary lulls in the information flood could be highly effective.
“Consumers don’t say, ‘Give me this particular type of media,’” Chan says. “They are looking for a particular piece of information, or a piece of content. If you deliver that then you will catch their attention.”
“Consumers are starting to pay more attention to the experiences that brands deliver to them”
—Cindy Chan, Focus Media CSO
Office workers or condo residents travelling in a lift several times each day might sound like the ultimate captive audience, but the key word is “relevant”. Understanding the consumer’s likes and dislikes, interests and aspirations is key to successfully engaging with them in their daily environment.
Focus Media brings together elements of commercial data (such as the building’s age, types of businesses it contains, property price and owners’ characteristics), Baidu data (including search terms entered from IP addresses in a particular building) and telecoms data (such as popular types of ecommerce transactions and deliveries in the district) to build a comprehensive profile of the consumers most likely to be in each particular building.
Incomes, demographics and location can only go so far in predicting the products that might interest any building’s population, which is why tying in the online data is crucial to painting a picture of habits and interests.
“It is not just about things like gender balance, important though that is,” Chan says. “Knowing whether people watch Bloomberg Television or search for news headlines online tells us a lot more about their likely spending habits.
“We can see, for example, residential buildings and offices where people have regularly searched online for ‘marathon’. This clearly a concentration of people who have an interest in running, and will be more open to messages from related sports brands.”
Chinese consumers’ social interests are also rapidly diversifying, Chan adds. It was previously relatively easy to pigeonhole groups of consumers based on broad characteristics, but a growing trend for individualism and confidence in exploring pursuits that would previously have been seen as non-conformist.
“China’s Tier-1 and Tier-2 cities are currently undergoing rapid developments in consumerism,” she says. “The functional economy is changing into an experiential economy. Consumers are starting to pay more attention to the experience that brands deliver to them, and this is an area where urban consumers will be more willing to spend money in the future.”
Chan says Focus Media expects its future revenue to come from three “ecospheres”: media advertising; sports and entertainment; and lifestyle services and internet finance.
“In the finance sphere, Focus has invested in a finance app called Latte Finance, which is already available online,” Chan says. The app includes an automated personal finance assistant and now has an extension to help users repay credit card debts and manage instalment payments.
“Through Focus Media we can effectively reach 300 million urban residents in China, push that traffic to become users, and the users then become a strategic ecosphere for transactions.”
While financial concerns can be a source of stress for some, Chan also sees potential in consumers who are looking to release some of that steam.
“People in China feel their lives are getting increasingly busy, that they are under constant time pressure,” Chan says. “As people get busier, we see they naturally place greater emphasis on how they spend their relaxation time. Films and entertainment, along with sports and fitness have become some of consumers’ top concerns.”
Focus Media has also established two new divisions to handle these two fields: Focus Entertainment and Focus Sports.
Chan says she believes China has the potential to build a sports economy to rival that of the US, and urges brands to reach out to consumers and play an active role in the process.
“In the future, Focus Media will integrate investment in sports and entertainment industries,” Chan says. “This will mean deeper involvement in the production of television and movie content, the production of sports programming and running of competitions. Focus will also be able to make use of existing promotional platforms to make a greater impact for these entertainment and sports programmes.”