Jenny Chan 陳詠欣
Aug 7, 2013

Mobile marketing at a snail's pace in China despite ample opportunities

BEIJING - As the 'great migration' from traditional PC usage to mobile devices intensifies in China, marketers have every incentive to tap into an extensive rural and urban customer base. So why are they so slow to the game?

Mobile marketing at a snail's pace in China despite ample opportunities

Brands cite measurability as the main hindrance to mobile marketing, but it is ironic that mobile is the most measurable tool—since one knows exactly what a consumer is doing at a certain point in time. Rohit Dadwal, managing director of the APAC branch of the Mobile Marketing Association (MMA), says the real reason is the hesitation to adapt and change, with the lack of measurability “an excuse”.

Recent research conducted by GroupM Interaction China and Decision-Fuel via 981 Chinese smartphone users states that mobile internet usage in the mainland has hit a tipping point.

The smartphone, which marketers used to call the 'third screen', is fast emerging as 'the first screen'. Mobiles are now influencing nearly every aspect of everyday life, with 95 per cent spending what GroupM terms as the day's 25th hour on their phones before sleeping.

Important mobile milestones in China include the smartphone overtaking the desktop PC to become the most popular internet access device in 2012 (Source: CNNIC) and China surpassing the US to become the world’s largest smartphone market by daily activations.

China's average monthly mobile data usage per user reached 122.8 MB in H1 2013, up 36.6 per cent year-on-year, according to figures released by the Ministry of Industry and Information Technology (MIIT). The user base for mobile music and video, mobile gaming, and mobile literature hiked 14.0 per cent, 18.9 per cent, and 28.7 per cent from the end of 2012, respectively.

Driven by a large number of local smartphone users (500 million devices expected to be in use by the end of 2013), Experian’s latest survey of 321 Chinese marketers indicates that 36 per cent have already tested mobile marketing to reach their target audiences, while only 16 per cent have incorporated mobile as part of their mainline marketing communications.

Having said that, mobile is a medium unlike any other that marketers have used in the past. All other mediums have been relatively simple—taking a particular ad and putting it in print or outdoor. Mobile marketing involves a fair amount of technology, so the barrier to entry is actually an educational one, Dadwal says. Learning how to effectively use mobile to cater to marketing objectives is the key.

“Everybody knows they need to get into mobile, but the problem is how," said Tony Chen, president of GroupM Interaction cum co-chair of MMA China. "The reality check is that mobile usage is very fragmented. Attention is not captive.” 

For instance, daily mobile video viewership is on average 74 minutes spent on 13 videos, compared with 52 minutes on five videos on a PC or laptop, according to Dele Liu, president of Youku Tudou.

Paul Berney, managing director of MMA’s EMEA branch, said a lot of marketers have been brought up to understand that advertising is about reach and frequency. "But that is not how mobile marketing works," he said. "It’s about hitting the right message to the right people at the right time.”

Moreover, the senior people who make marketing decisions at brands are usually more than 40 years old and not as savvy as younger digital natives. They understand how traditional advertising works and are comfortable with that, but it seems it's high time for them to move on.

Apart from education, another fast-track is removing all perceived obstacles, the main one being the “excuse” of measurability. Because you can no longer measure based on CPC, CPM, or CPRP, especially for campaigns touting user engagement with “shake-your-mobile” functions that are more than just clicks. Dadwal cites the social buzz from the Oreo 100th anniversary campaign as the new media currency of “return on engagement” (ROE)—which is harder than hard to measure.

During a joint forum on 11 July that Campaign Asia-Pacific attended, more than 50 MMA members, including advertisers, agencies, media owners and third-party monitoring firms, reached a consensus on the adoption of mobile measurement standards including the methodology of APIs (application programming interfaces), SDKs (software development kits), HTML tags, asynchronous transmissions and pixel tracking.

With SDKs embedded in mobile apps, data collected can tell how often users open an app, how much time they spend on average, and how active they are, etc.

It all sounds complicated to the layman marketer. “This kind of digital language makes them scared,” Chen said.

The mobile ecosystem is "largely a technological industry with a thin layer of marketing on top", said Berney, adding that mobile advocates can't just shout about that technology, but must use it for business insights.

Making it easier to measure standalone mobile campaigns is not a silver bullet though, as the industry is still at its wit’s end with regards to integrating the mobile device into the cross-screen consumption environment.

Calvin Chan, Beijing general manager and insights vice president of AdMaster, said clients are more concerned about how to integrate mobile into media planning to solve the fundamental problem of cross-channel efficiency and ROI.

Yum Brands’ associate media director Clare Zhang talked about the need to reduce the overlap between corresponding PC-based and mobile consumers. “This requires the efforts of the entire industry chain, as it involves overcoming technical barriers to obtain data openly while under the premise of privacy protection,” she said.

Indeed, mobiles may present marketers a treasure trove of ‘big data’ to decode the buying behaviour of consumers, but Chen said this is exactly what many marketers are still struggling with—too much data.

“There is so much data that they don’t know how to analyse it," Berney agreed. "So we need to translate the data into intelligence that they can act upon rather than just pure volume or quantum."

In addition, data discrepancies between post-campaign reports from media owners and third-party monitoring firms are putting a spanner in the works, Chen said.

While most brands are still in trial mode, some have rolled out cutting-edge mobile campaigns. E-tail giant Taobao, for example, ran a 'Shopfest' online to celebrate China’s “Double Eleven Day” (11 November, 2012), an online shopping festival similar to the Cyber Monday shopping spree in the US. A significant portion of merchants used relatively rudimentary short message services (SMS) to offer discounts at their virtual stores. The overall campaign resulted in an impressive US$3.1 billion (RMB19 billion) in sales.

Other mobile marketing tactics expected to show big gains include 'freemium' mobile applications, mobile-optimised emails, QR codes and barcodes.

TNS’s annual study, based on responses from 3,000 consumers across tier 1-5 cities in China, showed China’s youth are accepting of engaging with brands via mobile. 51 per cent of 16-30 year-olds would be interested in receiving special deals by interacting with an advert, or get more information about a product in-store by scanning a code with their smartphones.

"The true beauty of mobile marketing is in gamification and socialisation," said Ben Wilson, marketing director at Reckitt Benckiser China, who emphasises that the brand uses mobile apps like its Durex Baby for longer-term branding instead of expecting immediate "sales-related direct ROI" from it.

Other advertisers should "take a risk and worry about ROI only when they are putting at least 10 per cent of their digital budget on mobile", Wilson says.

Technology-led brands like Intel, Samsung and China Unicom are also starting mobile advertising on a bigger scale. "It helps that we have a 'freedom-to-fail' brand culture," revealed David Sun, marketing services director of Intel China.

Another behemoth lies beneath the surface. WeChat’s version 5.0 hit the street yesterday with its new mobile-payment function (iOS version released first) that is expected to subvert the existing e-commerce model, and God-Of-Sales willing, mobile commerce may just become the mainstay of calls-to-action.

Upon syncing bank cards and creating a WeChat payment password, users can make in-app purchases without the use of a third-party payment processor such as Alipay or Tenpay.

The latest numbers from iResearch indicate the total gross merchandise value (GMV) generated on mobile phones in China hit RMB 37.5 billion in the second quarter, up 181 per cent year-over-year with the lion's share on Alibaba's Taobao and Tmall platforms. Still, shopping on mobile phones is still just a fraction (8.6 per cent) of the overall e-commerce market.

till just a fraction of the overall e-commerce market. - See more at: http://www.alizila.com/m-commerce-china-surges-more-40-percent-q2-charts#sthash.lczYYq7K.dpuf
The latest numbers from market-research firm iResearch indicate the total GMV (Gross Merchandise Value, an estimate of total sales) generated on mobile phones in China hit RMB 37.5 billion in the second quarter, up 40.7 percent compared with Q1 and up 181 percent year-over-year. - See more at: http://www.alizila.com/m-commerce-china-surges-more-40-percent-q2-charts#sthash.lczYYq7K.dpuf
The latest numbers from market-research firm iResearch indicate the total GMV (Gross Merchandise Value, an estimate of total sales) generated on mobile phones in China hit RMB 37.5 billion in the second quarter, up 40.7 percent compared with Q1 and up 181 percent year-over-year. - See more at: http://www.alizila.com/m-commerce-china-surges-more-40-percent-q2-charts#sthash.lczYYq7K.dpuf
The latest numbers from market-research firm iResearch indicate the total GMV (Gross Merchandise Value, an estimate of total sales) generated on mobile phones in China hit RMB 37.5 billion in the second quarter, up 40.7 percent compared with Q1 and up 181 percent year-over-year. - See more at: http://www.alizila.com/m-commerce-china-surges-more-40-percent-q2-charts#sthash.lczYYq7K.dpuf

Challenges remain, however, as marketers cited deficiency of understanding of mobile technologies, lack of multi-channel strategies, absence of in-house resources, slow download speeds and poor senior corporate support as obstacles to rolling out effective mobile campaigns.

"Currently, the mobile industry is actually losing money," said Michael Tang, president of hdtMEDIA. "We are sugar-coating things by saying we are in a take-off stage".

"We haven't reached the sweet spot where the value of mobile marketing coincides with the costs of it," added Steven Shan, vice president of PPTV.

However, when the numbers prove the worth of mobile marketing, it is expected that those obstacles will disappear gradually in the world’s largest smartphone market, especially when China quickens the pace of issuing fourth-generation (4G) network licences—"a catalyst for mobile marketing", Tang said.

Some 92 per cent of marketers also agree that mobile will "soon" be one of the most popular ways for consumers in China to engage with brands, according to Experian.

“We’re so anxious [as to] why clients cannot move faster in terms of decision-making because we know how important mobile marketing is, but clients’ mindsets remain at the ad-hoc, campaign-by-campaign stage," Chen said. "Mobile is about being the bridge of other media channels, and the enabler and activator for better campaigns, and deserves a long-term strategy much like an annual TVC scheduling plan."

“Brands don’t need a mobile strategy, their strategies need mobile," concluded Dadwal. "Mobile should enhance and amplify whatever is already done, instead of being an after-thought.”

The fastest way, joked Bessie Lee, chief executive officer of WPP China, is to be like the Chinese Communist Party: 'Brainwash' everyone about how great mobile marketing is.

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