“When we compare 2012 with 2011, we’re seeing a huge amount of momentum and energy around e-commerce – beyond buying books and CDs," said Tony Chen, Group M's China interaction managing director. "Brands are also rapidly moving through the learning curve in social media and communicating with fans in a more human-fashion.” Web portals, he continued, have already started to lose traction, and advertisers are shifting their budgets rapidly to online video.
Here are some top digital trends Group M has identified for the coming year.
Describing online video as the “low-hanging fruit” for 2012, Chen said that investment in pre-roll online video ads would be one of his top recommendations for marketers in China.
“Eyeballs area shifting fast from TV to online video. For example, the P&G-sponsored hit show “China’s Got Talent” had 34 million TV viewers and 30 million online video viewers last July. Video can bring marketers plenty of eyeballs, and help marketers reach younger people in China, some of which do not even own TVs,” said Chen.
Despite the rising cost of online video advertising, it still remains a more cost-effective medium than television in most markets – up to 80 per cent lower per view according to a study by Miaozhen. The new TV regulations on advertising too benefit online video advertising.
Key opportunities for marketers in this space is to maximize TV ad campaigns by extending them to online video and leveraging the steep competition among online video sites to obtain deeper demographic information for audience-based ad buying.
The mobile platform hits a tipping point in 2012 with China’s mobile users hitting almost a billion and over a third of them using mobile to go online. “Marketers should begin thinking beyond the cell phone as tablets go mainstream. The key advantage mobile brings is location information which can be used to drive online traffic into retail stores,” said Chen.
Chinese mobile users are also fully engaged with their devices with over 90 per cent using apps, 66 per cent using search, 72 per cent sharing videos and 59 per cent turning to their phones for maps and direction. The use of HTML5 will bring the full spectrum of the web to the mobile phone.
“We are also excited about voice commands such as Siri coming into the market and going mainstream. Mobile voice commands will link with mobile apps, and a driver, for example, could mention he’s interested in pizza and through voice command he could undertake a local search to find the nearest restaurant,” said Chen.
To take advantage, brand managers should consider incorporating a mobile element into every campaign and develop HTML5 websites to keep pace.
China’s e-commerce market is expected to grow exponentially to US$300 billion (RMB2 trillion) by 2015, possibly surpassing the US market, said a study by BCG. In 2011, Taobao’s daily transactions peaked at US$500 million (RMB3.3 billion) and China’s online shoppers grew 21 per cent to 190 million.
“China’s e-commerce market is rapidly shifting from a C2C market to a B2C market as brands open stores online and go direct to consumers. The fast food giant Yum, for example, is focusing on developing a sophisticated online ordering system, and many brands are using TV commercials to drive consumers to their online sites,” said Chen.
To leverage this trend, marketers should move to establish online stores (if they don’t already have one) – perhaps on Taobao where retailers can gain experience before launching independently. As Chinese are also extremely social shoppers with 82 per cent considering other buyers opinions and 90 per cent of Sina Weibo users visiting e-commerce sites, engaging online shoppers via social media is a must.
While weibo is going from strength to strength in China, growing from 63 million in 2010 to 250 million in 2011, other SNS platforms have hit a plateau with major players like RenRen turning to e-commerce and video for new revenue streams. The new wave of growth for 2012 are user rating sites like Douban, Diandian, and Dianping which are gaining traction, particularly in tier-1 cities.
Sina Weibo is also expected to start selling advertising space in 2012, creating opportunities for brands to build a presence and experiment with audience-based buying. Marketers should also use other social platforms to complement a weibo-centric approach to social.
Data goes big
“This will be the year marketers in China come to realise the value of data,” observed Chen. In 2012, brands should build their CRM capabilities, and find ways to leverage consumer data and cross-media user behavior to improve targeting and campaign ROI, he recommended.
“Social media has created an unprecedented opportunity for brands to consider audience-based buying and to collect data through listening and interacting with consumers in ways that can extend from social media and possibly link to direct sales through e-commerce.”China’s consumers are growing increasingly sophisticated as their time and attention is taken up by increasing amounts of digital marketing. “The era of single-platform marketing is over. Marketers need to think in terms of 360º campaigns, targeting on multiple platforms, and implementing shorter-term and more diverse tactics to engage audiences at every touch point in this new fragmented reality,” concluded Chen.