Study of Online Performance Marketing in China 2012: the Year in Review and look ahead to 2013

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In 2012, the biggest buzz word in China’s digital marketing is undoubtedly “RTB” (Real-time Bidding). Since Google launched the DoubleClick Ad Exchange Platform in China in early 2012, it has brought drastic changes to the market in adopting real-time media transaction. In a recent research paper, IDC estimated that total RTB spending in China will increase significantly from USD21 million in 2012 to USD627 million in 2016 at a 145% CAGR.

iClick Interactive has conducted a study on China’s performance marketing landscape by analyzing the growth of the 4 main digital channels: search, display, video and mobile in recent years, and how each channel is evolving to become more performance-driven to suit marketers’ growing demand on ROI. The study has also shed light on how the China’s digital marketing landscape will evolve in 2013.

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Study of Online Performance Marketing in China 2012: the Year in Review and look ahead to 2013

  1. 1. January, 2013
  2. 2. Foreword Sammy Hsieh, CEO and Co-founder of iClick In the past decade of my career in digital marketing, I have had the pleasure of witnessing the exciting changes that have taken place as the industry evolves and matures. The advent of the internet, a brand new medium, has completely transformed the landscape of the advertising industry. This has resulted in a multitude of both opportunities and also challenges for all businesses. In retrospect to the development of online advertising over the past few years, we can chart three distinct phases of growth. In the first phase of internet marketing from late 1990s to early 2000, the competition in internet advertising was not keen; the mere use of attractive visual images was enough to capture consumers’ attention, and was considered effective online advertising. The 21st century saw the widespread popularity of the Internet trigger a staggering growth in the online advertising industry. Today, the Internet is an integral part of our everyday lives; the fact that we spend more time online compared to any other forms of traditional media, signals our entry into the third phase of development: the birth of multi-channels of communication, supported by burgeoning technology, that has resulted in online marketing becoming a crucial tool in any marketing and media plans. From the early days of eyeball-driven marketing to the technology-driven marketing of today, I believe that search engine marketing represents a key milestone. Around 2003, all forms of search engine marketing began to take off within China. The introduction of the pay-per-click business model carved out new arenas for growth in the result-oriented world of Internet marketing; it completely obliterated the traditional mentality and beliefs that Internet marketing was solely for branding purposes, and demonstrated a much broader range of result-driven applications for advertisers. Now, the introduction of real-time bidding technology has further urged both display and mobile advertising towards adopting this performance-based business model. Just as performance-driven marketing has become the main business model in Europe and the United States, I believe we will see the same trend gradually emerging in China. Although European and American advertising industries suffered a downturn in 2012, local and overseas researches all indicate that China will become the second largest market for Internet advertising in 2013 as the number of Internet and mobile users continuous to grow. To further understand how these events shall evolve, iClick has put together this in depth analysis to forecast the key trends that will be impacting the industry in the coming year, incorporating both vertical and horizontal analysis of the current status, issues and emerging trends in China’s Internet industry. We have also examined the likely development in performance marketing from the perspectives of the Internet user, advertiser and publishers. As a leader in Asia’s performance marketing market, we believe our forward-looking analysis will provide ample of insights to advertisers -1on Internet advertising, to empower advertisers for better budgeting and realize better returns on their spending.
  3. 3. Foreword We have realized from our recent interactions with our clients that their needs has been constantly changing. Traditional brand marketing clients used to focus on getting exposure for their brands with very particular preferences on media image and ad placements. Performance-focused clients, on the other hand, focuses on profiles and qualities of targeted users rather than placements. This relatively practical approach has a better-defined objective with specific deliverables including page view, registration, and transaction as indicators. Today, branded advertisers are giving more attention to the results from their campaigns. At the same time, clients are increasingly receptive towards new technologies and new ways to monitor the outcome of ad-spending. More thoughts are going into strategic media budgeting that can be more directional and offers greater precision in achieving desired outcome, all the while as DSPs and RTBs becomes a part of their regular lingo. The change in sentiment is a product of several factors, including the recovery of the capital markets in China. As the recent attempts of US-IPOs for Chinese companies experienced considerable setbacks, the “cash-burning” Internet business model has also become a thing of the past. On the other hand, numerous industries have also been affected by the global economic crises, making businesses and investors ever more cautious with their spending. Competition has heated up considerably as the industry grows. Advertisers are readily allocating a bigger budget for performance marketing, trying to derive greater value from their sales strategies as they realized that audience targeting is equally effective in promoting their brands. Changes in advertisers needs has led publishers into introducing performance-based business model to other formats of Internet advertising, such as display, video and mobile advertising in addition to search marketing. This report provides a macroeconomic discourse on the present environment of China’s Internet advertising market, analyzing the outlook and upcoming opportunities in relation to the four key channels and three driving forces of performance marketing. As a pioneering voice in the industry, iClick endeavors to enable our advertisers to achieve optimal return from their advertising spend with our in-depth market knowledge and technology edge. Ricky Ng GM of iClick China and Co-founder -2-
  4. 4. Table of Content • Overview of Online Marketing in China • The Rise of Performance Marketing • The 4 key channels: • • • • Search Display Video Mobile • The 3 Driving Forces of Performance Marketing • Online Users • Advertisers • Publishers • Online Marketing in 2013 and forecasts -3-
  5. 5. Table of Content • Overview of Online Marketing in China • The Rise of Performance Marketing • The 4 key channels: • • • • Search Display Video Mobile • The 3 Driving Forces of Performance Marketing • Online Users • Advertisers • Publishers • Online Marketing in 2013 and forecasts -4-
  6. 6. Overview of Online Marketing in China China’s online advertising continues to expand, and is expected to reach RMB80 billion in 2012 China Online Advertising Market, 2004-2015 YoY Growth RMB (100 million) According to iResearch, China’s online advertising market attained a value of RMB51.29 billion in 2011, with an annual growth rate of 57. 6%. Source: iResearch, “2011-2012 Annual Report on China Online Advertising Market” China’s online advertising market is expected to maintain a growth rate of over 50%, reaching RMB80 billion in 2012. -5-
  7. 7. Overview of Online Marketing in China Growth rate of China online ad spend surpasses the global average Growth Rate of Global Online Ad Spend, by Region and Country 2010-2015 China US UK Middle East & Africa Eastern European Global Source: eMarketer, Online Ad Spending Growth Worldwide, By Region and Country 2010 - 2015, According to eMarketer, digital ad spend growth in China exceeds other regions and surpasses the average of growth worldwide (except for Middle East and Africa which are still at the early stage of market development). -6-
  8. 8. Overview of Online Marketing in China Online advertising to overtake TV ad spending in future, with a gap of less than 3% in 2012 2008-2012 Share of Online Ad Spending in Overall Ad Spend in China Others Online ad Print ad TV ad According to iResearch, China digital ad market accounts for 34% of the total advertising market in 2012. Source: iResearch Digital ad spend has exceeded print ad in 2011. iResearch also predicted that digital will overtake TV ad spend in a few years, since the gap between them will narrow down to only 3% by 2012. -7-
  9. 9. Overview of Online Marketing in China Factors driving the online advertising market in China • Ever-growing China’s Internet population: As of the end of June 2012, there are 538 million online users in China*. The Internet penetration rate rose to 39.9%* as people from different socio-economic backgrounds gained access to the Internet. • Multi-channel marketing: With the appearance of forum, SNS and social media, people spend more time socializing and accessing information online. The ability to integrate these diverse channels, allows advertisers to deliver their messages in the most effective and engaging ways possible. • Traditional industries shift to digital marketing: Advertisers are now shifting their expenditure from traditional channels to digital marketing. For example, the digital ad spend of the car industry grew by 18.53% month-on-month in February 2012, while digital ad spend of the dairy product industry rose by 11.88% month-on-month in June 2012**. This shows that many industries are now recognizing the powerful impact of digital advertisements. Resource: *CNNIC the 30th statistical report on Internet development, July 2012 **Enfodesk -8-
  10. 10. Table of Content • Overview of Online Marketing in China • The Rise of Performance Marketing • The 4 key channels: • • • • Search Display Video Mobile • The 3 Driving Forces of Performance Marketing • Online Users • Advertisers • Publishers • Online Marketing in 2013 and forecasts -9-
  11. 11. The Rise of Performance Marketing Performance marketing accounts for 67% of total digital ad income in U.S. China is expected to follow a similar trend (%) Percentage of Total Advertising Sales 2005-2012 Shares of Various Advertising Charging Models in U.S. Charge according to performance Charge according to CPM Hybrid Source: US digital market is more mature. According to iAB’s data on internet advertising revenue, performance marketing accounts for 67% of total digital ad spending in US 1H 2012. In iClick’s view, the digital ad market in China will follow this trend. - 10 -
  12. 12. The Rise of Performance Marketing 4 Main channels of performance marketing: search, display, video and mobile ads Market Share of Different Ad Channels in 2012 Second Quarter Others Video Ad According to iResearch, search ads and display ads took more than 80% of total digital ad market share, however, mobile and video ads are on the rise. Search Ad Display Ad Source: iResearch, “2012 Second Quarter Online Advertising Market Report” To understand the rise of performance marketing, we will look at the trend by analyzing 4 main channels including search, display, video and mobile ads. - 11 -
  13. 13. The Rise of Performance Marketing Pillar of performance marketing: Search ads thrive despite economic downturn 2010-2012 Quarterly Growth of Search Engine Market in China RMB (100 million) Source: Enfodesk, “2012 Third Quarter Report on China Search Engine Market” The overall market downturn has resulted in the rise of performance marketing. Investors and companies are now more cautious with advertising spend; decreasing funds and fierce competition are factors that drive the need for solutions that optimize returns on investment (ROI). Currently, more advertisers’ budgets have shifted from focusing on branding to achieving quantifiable results. According to Enfodesk, the revenue of China search engine publishers was RMB8.13 billion in 2012 Q3, the quarter-onquarter growth was 16.1%, and the year-on-year growth was 51.2%. Expenditure on search ads is expected to keep growing. - 12 -
  14. 14. The Rise of Performance Marketing From Search Engine to “Audience-targeted Engine” New Search Engine Marketing Keyword Search Audience Targeting Text links on the search result page With the advancement of technology, search engines now offer a wider spectrum of search related advertising solution that goes beyond the traditional text-based precision match approach to push ROI to a higher level. For example, Baidu, the leading search engine in China, offered audience-targeted search engine marketing in September 2012. Search engine marketing offers media owners and advertisers an integration of website targeted, search targeted, visit targeted and interest targeted information, helping them attain detailed and indepth target audience profiles. Rich media on affiliated websites - 13 -
  15. 15. The Rise of Performance Marketing New player in performance marketing: Exponential growth in performance-based display ad spend is expected 2012-2016 Share of RTB Display Ad in China’s Overall Display Ad Market RMB (100 million) Share in total ads Display advertising used to be viewed as a branding channel, with less association to performance-driven marketing. However, Google’s launch of its DoubleClick Ad Exchange platform in China on April 2012 altered the landscape. DoubleClick's ad exchange is a display ad marketplace that allows advertisers to target at specific audiences. From then on, display ads became a fresh new player in the world of performance-driven marketing. Several influential portals have built their own ad exchange platforms, and IDC estimates that China RTB display ads will rocket from 1% in 2012 to 11% by 2016. Source: IDC, “Real-time Bidding in the United States and Worldwide, 2011-2016” In sum, driven by RTB technology, display ads will become more and more performance-based. - 14 -
  16. 16. The Rise of Performance Marketing Video ads join the new wave of performance marketing 2006-2014 The Scale and Penetration Rate of Online Video Ad Market in China Penetration Rate Online Users (100 million) In addition to search and display ad channels fueling the development of digital advertising, exciting new digital advertising channels such as video and mobile ads have emerged to join the wave of performancedriven marketing as well. The number of online video users in China reached 380 million, with a penetration rate of 90% in 2011. According to CNNIC’s data, people spend more time online watching videos than on any other form of online activity. Source: iResearch, “2011-2012 Annual Report on Online Video Industry in China” This startling growth in the number of users and penetration rate is largely due to the rich content, high-quality images and high-speed broadband. - 15 -
  17. 17. The Rise of Performance Marketing Video ads join the new wave of performance marketing Market Size of Online Video Ad in China Between 2009 and 2014 RMB (100 million) Source: iResearch, “2011-2012 Annual Report on Online Video Industry in China” Video advertising used to be perceived as the twin of TV advertising, and was favored by traditional branding advertisers. Yet as seen from its development in the United States, video advertising has gradually evolved and progressed along the path of performance marketing. Data from Tube Mogul indicates that in the 2nd half of 2012, pre-rolled video ad resources available for purchase via RTB in U.S. are growing at an average monthly rate of 14%. In the whole year, such web video advertising resources via RTB purchase will account for 15% of the total spending on web video ads; by 2013, this figure will be 22%. Therefore it can be predicted that China’s web video advertising will probably develop towards accuracy and efficiency. At present, video ads purchased via RTB in China are still in its early stages. Tencent, a video giant in the industry, stated recently that in future, video ads will be available through RTB purchase on the Tencent advertising realtime exchange platform. - 16 -
  18. 18. The Rise of Performance Marketing Mobile users in China estimated to reach RMB24. 5 billion, increased opportunities for performance-based mobile ads 2006 to 2015 Scale of China Mobile Marketing 2006-2015 Mobile Marketing Scale in China RMB (100 million) RMB (100 Million) In the past several years, China’s mobile Internet has been developing very rapidly and, by the end of December 2011, the number of China’s mobile users reached 356 million, i.e. a year-on-year growth of 17.5%, while the number of smartphone users reached 190 million, with a penetration rate of up to 53.4%. The growth of users in mobile Internet has attracted the attention of advertisers. In 2011, revenue in mobile ad marketing reached RMB2.42 billion, and is expected to hit RMB6.32 billion in 2012. This growth of mobile ads is mainly due to improved recognition of mobile media by advertisers in recent years; the popularity of smartphones and the development of different applications also plays a major role. Advertisers also wish to utilize mobile ads as part of an all-rounded communication plan. Source: iResearch, “2011-2012 Annual Report on Mobile Marketing in China” Source: iResearch “2011-2012 Annual Report on China Mobile Marketing” - 17 -
  19. 19. The Rise of Performance Marketing Mobile ads scale in China estimated to reach RMB24. 5 billion, increased opportunities for performance-based mobile ads However, whether or not mobile ads will emerge as a new favorite in the advertising field will ultimately depend on its performance in promotion. In terms of performance optimization, mobile ads made progress in the following areas in 2012: Advertisers' Demand for RTB Mobile Ad Bidding Rate of Each Impression RTB win rate Consolidation of advertisement placements: In 2012, a number of mobile ad exchange platforms have sprung up, including domob, Adwo, Vpon , YouMi, etc. Furthermore, industrial giants such as Baidu, Tencent, Renren, or even some overseas players such as admob and inmobi, have entered the market one after another, which has greatly increased media resources for mobile ads. Jan Feb Mar Apr May Jun Note: RTB win rate refers to the successful rate of bidding requests through RTB; while the bidding rate of each impression refers to the average bidding request for an exposure. According to U.S. data, though seasonal factors may result in data fluctuations, in general advertisers in the first half of 2012 have an increasing demand for RTB ads, which is reflected by the increasing bidding request and win rate. Source: Mobile RTB improves ROI: Mobile applications have short life cycles, unstable impressions, resulting in a high chance of repeated exposures to the same group of audience, which can be wasteful. Therefore, like Europe and the United States, a trend has begun to emerge in China's mobile marketing – the use of RTB to improve accuracy of mobile ads. As seen by the current situation in the United States, advertisers’ demand for mobile RTB resources is increasing, which demonstrates that advertisers have very high requirements for both accuracy and efficiency when it comes to mobile marketing planning. - 18 -
  20. 20. Summary To meet the surging demand from advertisers on marketing performance, China's major online channels, whilst continuing to develop rapidly, are also undertaking a rapid transformation towards maximizing return on advertising spend. - 19 -
  21. 21. Table of Content • Overview of Online Marketing in China • The Rise of Performance Marketing • The 4 key channels: • • • • Search Display Video Mobile • The 3 Driving Forces of Performance Marketing • Online Users • Advertisers • Publishers • Online Marketing in 2013 and forecasts - 20 -
  22. 22. The 3 Driving Forces of Performance Marketing The influence of online users, advertisers and publishers on performance marketing The use of digital advertising to achieve marketing performance will no doubt become a core strategy for marketers in the future. Looking back at the past several years, the rapid development of performance marketing is motivated by 3 major forces: online users, advertisers and publishers. 3 Driving Forces in Performance Marketing Online Users Performance Marketing Advertisers Publishers - 21 -
  23. 23. The 3 Driving Forces of Performance Marketing Online users driving the development of Performance Marketing The explosion of new media channels and the popularity of mobile devices seen in last 10 years have drastically altered the behaviors and habits of online users. Consequently , all these changes have a direct impact on advertisers’ choice of media strategies. The following pages will talk about what exactly has been changed. - 22 -
  24. 24. The 3 Driving Forces of Performance Marketing A higher degree of fragmentation observed in China online users in the last 10 years • Dramatic increase in the number of websites: The number of China’s Internet websites in 2012 exceeded 2.5 million*, along with a total of 8.73 million domain names. Consequently, Internet users have turned from browsing only several portals to surfing dozens of and more than a hundred websites everyday. • Innovative web content and online channels: In the past, an online user's behavior might be relatively simple, either browsing news or searching for information; today, the activities of users are very diversified. A user may at one moment be enjoying the latest contents of a new channel via his mobile phone, and then contact his friends through social network, share his wonderful daily discoveries with them, and then go shopping for necessities at online stores. Every day, we witness the appearance of all kinds of new media and applications, changing users’ behavior on the Internet. • Popularization of mobile devices: While daily time spent in mobile apps has now surpassed web consumption. Mobile and PC users needs and behavior are also different. *Source: CNNIC, “Internet Development Report, No.30” - 23 -
  25. 25. The 3 Driving Forces of Performance Marketing Advertisers driving the development of Performance Marketing Advertisers used to be able to grasp the majority of their target audiences by simply placing their ads on major portals. Today, advertisers can no longer do that as online users are highly fragmented and scattered among hundreds of websites. With the emergence of RTB, advertisers can now deliver their ads to the most appropriate audiences and at the same time ensure that every marketing dollar is well spent. - 24 -
  26. 26. The 3 Driving Forces of Performance Marketing The rise in advertising costs and changes in user behavior change the strategies of advertisers Advertising Fee (RMB) Homepages of major portals Charged by time of service RMB100,000-500,000 per day First channel pages of major portals Charged by time of service RMB80,000-20,000 per day Homepages of vertical portals Charged by time of service RMB80,000-20,000 per day The price inflation of premium ad placements is driving advertisers to look for other cost effective advertising options: An ad placement on a homepage or a prominent position on a major portal are charged on a daily basis or according to the share of impressions, with average cost ranging from hundreds of thousands to more than millions daily, sometimes costing even more than TV ads. While these premium ad placements help advertisers by attracting a large number of eyeballs, in an uncertain economic environment, advertisers will start paying more attention to ROI as well. The shift from premium to long tail ad placements: As seen above, online users today tend to spend more time scattered across various sites, leading advertisers to now pay attention to long-tail websites. In the past, the long-tail ad was generally regarded by advertisers as part of the media mix, playing a supplementary role in the overall marketing strategy. However, with more advanced targeting technologies, advertisers are now considering long-tail ad placements as an important part of the media mix. According to iResearch, in 2009, the market scale of China’s long-tail ads reached up to RMB940 million. It is estimated that from 2010 to 2012, the annual growth rate of the long-tail ad market will exceed 50% . - 25 -
  27. 27. The 3 Driving Forces of Performance Marketing Publishers driving the development of performance marketing Now that there are millions of websites on the Internet, competition amongst websites to secure advertisers' spending has also intensified. Therefore, many websites have introduced business models that charge advertisers according to results attained ( i.e. CPC, CPA, CPS). Such websites also support RTB to improve marketing results. This allows them to ensure their website incomes, while at the same time increasing marketing efficacy for advertisers, achieving a win-win solution for both parties. - 26 -
  28. 28. The 3 Driving Forces of Performance Marketing Media charges according to performance: a win-win situation for media and advertisers Shares of Different Charging Models of Online Advertising Market in China From 2008 to 2012 Source: iResearch, “2011-2012 Annual Report on Online Advertising Industry in China” The emergence of search engine marketing charged according to CPC has instantly altered the existing business model of charging by CPM in the online advertising market. As search engine marketing became more and more recognized by advertisers, the CPC charging model started to grow slowly in 2008, up to about 50% of total ad revenue in 2011. At the same time, charging models which have higher requirements for performance such as CPA (costper-acquisition) and CPS (cost-persales) have appeared. These two charging models are expected to account for about 7% of the total online ad revenue in 2012. - 27 -
  29. 29. The 3 Driving Forces of Performance Marketing Appearance of Ad Networks and Ad Exchange Platforms: Enhance the value of the long tail advertising placements Market Size of China Ad Networks from 2009-2013 RMB (100 Million) The growing number of websites has led to the emergence of ad networks and other ad exchange platforms. The purpose of these platforms is to integrate scattered online placements, and make them available to different advertisers according to their promotion purposes and targeted audience segments. The redistributing of placements to the most appropriate advertisers helps to improve the value of ad placements as well as reduce resource wastage. iResearch forecasted that in 2012, revenue from ad networks in China would reach a revenue of RMB16.76 billion; with iResearch's rough estimate of RMB80 billion as the total advertising revenue, revenue of ad networks will account for approximately 20%. Source: iResearch, “2011 Development Report on Ad Networks in China” From the growth figures of the advertising network, it can be seen that more and more media owners are willing to put their unsold placements or long-tail placements for sale on ad networks or ad exchange platforms. The increase in placements available also encourages advertisers to promote on such platforms. - 28 -
  30. 30. The 3 Driving Forces of Performance Marketing Influential Portals to build their own Ad Exchange platforms Though facing relatively less competition, in the past few years, major portals primarily managed to achieve revenue growth by increasing advertising fee, especially the premium ad placements on homepages and popular channel pages. However, their tier 3 or 4 pages have less demand from the advertisers. The vacancy rate of ad placements in these major portals is estimated to be as high as 50%. With the emergence of RTB technologies, the market value of these unsold inventories is expected to jump because RTB helps to deliver the ad to the right targeted audience by tracking users’ online behavior instead of just considering the positions of the ad placements. These factors will encourage large portals in China to accelerate their pace in the construction of their own ad exchange platforms, thus participating in the brand new RTB market through pilot operations. - 29 -
  31. 31. Summary Fragmentation of online users Emergence of new media and channels Bring about changes in habits of browsing Advertisers Purchase target audience directly - High vacancy rate for major portals - Long-tail websites seek-integrated platforms to enhance values of ad placements - Media wish to sell ad placements through RTB Demand for competitiveness in the long run results in the search of more effective marketing means The pulling force between media and advertisers give birth to ad exchange platform. Thus a win-win situation is created for both parties in sale and purchase of advertisements As demonstrated by the above presentation, the rapid development of performance marketing is mainly powered by three major forces, each one a vital part of the equation. In future, new kinds of service providers will emerge, similar to how SSP, DMP, and others developed in the United States, helping all parties achieve a situation that benefits everyone. - 30 -
  32. 32. Table of Content • Overview of Online Marketing in China • The Rise of Performance Marketing • The 4 key channels: • • • • Search Display Video Mobile • The 3 Driving Forces of Performance Marketing • Online Users • Advertisers • Publishers • Online Marketing in 2013 and forecasts - 31 -
  33. 33. Online Marketing in 2013 and forecasts 1) Performance-driven marketing is no longer exclusive to search marketing: With the help of advertising technology, performance-driven marketing extends to display ads and other online advertising channels Solid results and lead traffic have always been the key reasons that search marketing has led the race towards performancedriven marketing. This has no longer been the case, since Ad Exchange and RTB technologies were introduced into China in early 2012. RTB significantly enhanced the accuracy of display advertising in terms of achieving comparable results. Since then, display inventory acquired via RTB has become an important source of accessing performance-driven marketing. In China, the Taobao Ad Network Exchange (TANX) was introduced at the end of 2011. Google also launched DoubleClick Ad Exchange in April 2012 Tencent, ready to leap on the bandwagon, also leaked their version of a private exchange platform, MINDX, to the public in August. According to industry reports, SINA is not far behind. However, the coverage of these three key ad exchanges still does not constitute a significant number of inventory. We therefore believe that there is still significant room for RTB growth as more inventories will be available through RTB with greater liquidity, allowing for sustainable growth. We also believe that RTB will lead to exponential growth in mobile advertising. Taking the US market as a point of reference, there is a three-year gap between display RTB and mobile RTB technologies. However, the tremendous growth in mobile uptake can possibly swing matters in its favor, allowing mobile RTB to come out on top in the competition. This is because experience tells us that advertising budgets are dictated by the customers, and the momentum of usage of mobiles and tablets has long overtaken that of desktop computers. However, mobile technology is also currently limited by multi-screen transfers, hence the feasibility of achieving desired returns from advertising expenditure will be determined by whether DSP is able to tap into historical data for optimum results. As such, a popular method in the US is domestic WIFI access to bridge the mobile PC data gap. - 32 -
  34. 34. Online Marketing in 2013 and forecasts 2. More branded advertisers jump on the performance-driven marketing bandwagon as it is adopted by more industries Next to channel development, the ability to change advertisers’ perceptions of performance-driven marketing is also important. While performance-driven marketing used to be popular only with advertisers from industries such as e-commerce, travel, banking and finance, data from the past year indicates that more branded clients will begin to actively seek out performance-driven marketing. We no longer expect to see brand owners pumping cash into advertising, with an extreme example being “crazy ads” placement splashing across front pages to attract attention. Although this could generate a lot of “noise” to complement PR strategies, it is a resource-wasteful approach that is neither economical nor sustainable. In order to effectively enhance brand awareness, a brand owner needs to focus on delivering specific messages to their most valuable users. This is where RTB can satisfy their needs. RTB can accurately segregate users according to specific qualities or preferences. In other words, it can allow advertisers an opportunity for one-on-one brand promotion. Targeted brand promotion means capturing the precise moment to via an appropriate platform to display their products. This can highlight specific brand qualities and increase the possibility of gaining the trust and recognition of a targeted user. For example, a young tech-savvy male consumer would appreciate a specific vehicle’s technological innovations, whereas a young female consumer who is interested in maternity brands would be more drawn to the safety features in the same vehicle. This approach will more effectively convey the brand messages and build greater trust for the brand, regardless of whether the consumer is ready to make a purchase decision at the time of exposure. The beauty of RTB is in its ability to locate the smallest segment amongst users and deliver a message to these people in real-time, gaining users’ recognition through its relevance. Global FMCG heavyweight P&G recently announced the adjustment of its global strategy to significantly reduce spending on traditional marketing, and allocate more substantial resources to Internet marketing. P&G China has supposedly developed a social media game for users to experiment with their products and earn tokens that can redeemed as discounts for Wyeth products at Watson’s. As the largest advertiser in the world, such a significant move in its marketing strategy can have significant implications on the industry. - 33 -
  35. 35. Online Marketing in 2013 and forecasts 3. Data is King: from theory to reality Large data stories became somewhat of an overnight media darling in 2012. So what will be the large data story for 2013’s Internet advertising market? As the industry’s technology and infrastructure matures, we expect to see the launch of large data in application. The industry is now focused on transforming large data concepts into practical actions. To a marketer, this can be applied in three areas: Optimized user groups: excavating high-quality users and overcoming the barrier of finding specific target user groups in a sea of imperfect or inadequate data, making it difficult for advertisers to accurately capture the targeted user group. As real-time technology is developing at an accelerated speed, it is no longer difficult to create one-stop data solutions. Tracking path data, to data collection, storage and processing, to hierarchical classification and analysis of multi-dimensional data, to efficient data mining, even the use of advance technologies for machine learning on valuable derivative data; all of this is now achievable within a blink of an eye, in real-time. Channel optimization: this refers to single-channel and multi-channel optimization. More empirical support means channel optimization with greater precision in single-channel and multi-channel optimization. Previously, channel performance analysis was limited by data availability, putting a cap on the possibility of better channel performance, hence optimization opportunities were not adequately exploited. A simple example is research that has indicated the effect of weather on people’s propensity to shop online. While many may dismiss this finding as unoriginal, the key is how to apply this kind of information to quantify the correlation between people’s online shopping behavior and weather conditions, creating an optimization directive based on the theory. Bid data theories can resolve this issue and broaden potential for outcome optimization. Advertising content and creative optimization: the “right” content for the “right user” at the “right” time. When both user and channel are at an optimum level, the key to the outcome of an advertisement will rely upon the contents of an advertisement. Large data can allow performance-driven marketers to lock down target users and locate the channels where they will be online with greater ease. However, should the user receive irrelevant product messages, the results of the advertisement will not be as definitive. The power of large data is in its ability to identify where a particular user is in the conversion funnel, and decipher relevant advertisements and creative from that point onwards. For example, a new client may see an advertisement with an offer for a free sample, and a returning client will see a special promotion for the same product. 34 -
  36. 36. About iClick
  37. 37. About iClick iClick is the first Buy-side Platform in Asia established to help marketers manage cross-marketplace strategy efficiently, and to maximize ROI through the company’s proprietary optimization platform – XMO, which is built on advanced algorithmic and data technology. iClick has established itself as the trusted partner of a number of Fortune 500 companies and top brands across Asia, designing and managing successful online marketing strategies. iClick maintains a strong presence in the region with offices in Beijing, Shanghai, Shenzhen, Hong Kong, Taiwan, Singapore and Korea. - 35 -
  38. 38. Thank you Website: i-click.cn Weibo: weibo.com/iclickasia Email: sales@i-click. asia - 36 -

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