Ad china 2012 china digital media scene_en


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Ad china 2012 china digital media scene_en

  1. 1. 2012 CHINA DIGITALMEDIA SCENEBrought to you by AdChinaJanuary Microblog: @AdChina易传媒
  2. 2. Dear Partners, We start off the year 2012 with great excitement. In the past five years, the category of technology-driven internet advertising has grown from 0% to 8% of the total internetIntroduction advertising spending in China. We estimate this number to double in 2012. Our confidence is based on the daily work we do for our clients, who are the largest 1,000 advertisers on the China market. Last year we upgraded several of our products, such as the cross-media planning system eTV2.0, and our clients’ satisfaction has risen dramatically. They have responded by increasing their project requests exponentially. An important agenda of AdChina in the past two years has been to expand our advertising operating platform both to the supply-side (media) as well as to the demand-side (agency and advertisers) of the value chain in China. Today, 200 online and mobile internet publishers are using our supply-side platform ASP, and 4 of the 6 largest international 4A media agencies in China are using our demand-side platform ADP to manage their advertising operations. We’re launching this 2012 Digital Media Scene Report with the aim to provide a practical digital outlook for the coming year for our clients: what are the new digital media trends in China and around the globe? What are the investment opportunities that no one should miss? Jing Pan During the process of preparing this report, we referenced a lot of domestic and overseas research reports, interviewed our clients and overseas collaborators. We also sponsored a VP of Marketing, AdChina Harvard Business School project on “the Future of China’s Technology-driven Advertising” in Sina Microblog: @Jing潘静 Q4, 2011. All in all, we hope you’ll find this report useful. Last but not least, we wish you and your loved ones a happy Lunar New Year and prosperous Year of the Dragon. May you find great health, happiness and success! Yours, AdChina Team 2
  3. 3. AdChina is the leading technology-driven integrated internetadvertising platform in China The core advertising operating Supply-side Demand-side system Ad operating system For PC and mobile internet Ad operating system for for publishers agencies / advertisers A P d u A v b - Processing 1 billion requests / day g - Advertising placement on 400 PC e l -Workflow mgmt e publishers and 10,000 mobile r i -Publisher advertising mgmt -workflow mgmt n -Data mgmt publishers daily t s - Matching the right ads with the c i h most appropriate audience i - Media planning/buying s e - Automated company workflow e mgmt - Cross-media planning e r s - Generating financial reporting data r s for mgmt decision-making s - Data collection - Report & analysis - 100 premium online - 200 additional campaigns - 4 of the top 6 international publishers are using ASP per month 4A groups in China are - 80 mainstream mobile - 300 campaigns at any using ADP publishers are using ASP given time - 4000 historical campaignsAdChina is China‘s leading integrated internet advertising platform. A leader in online advertising space in China, AdChina provides thetechnology platform and creates the marketplace for publishers, agencies/advertisers, as well as other third party players with acomprehensive range of digital advertising technologies, online user data solutions, and audience management systems. By end of Q32011, on a monthly basis, AdChina platforms have access to over 457 million or ~90% of total Chinese internet users across PC internetand mobile internet. AdChina was founded in Silicon Valley in 2007. 3
  4. 4. [ PART 1 ]2011-2012 Digital Media Outlook - Chinese internet population exceeded 500 million in Jan. 2012. Driven by government policies,[ 1.1 ] General short term growth comes from urban and long term from rural markets. - Chinese internet advertising budget as percentage of total is ½ of that of the developed market. We estimate dramatic growth in 2012. - 20% of the display ads to be placed through 3rd party platforms by 2014 in China. Dramatic[ 1.2 ] Display Ads growth to happen in 2012 driven by client confidence based on proven result and cautious economic outlook.[ 1.3 ] Mobile internet - Internet visitation through mobile devices accounts for 1% of the non-search & eCommerce total. - APP marketing to become mainstream and LBS commercialization at the inflection point.[ 1.4 ] Video - Online video to grow significantly. TV and internet overlap exceeds 50% in the top 60 China cities.[ 1.5 ] Social Media - Social media user growth to slow down. Social media marketing approaches and measurement metrics to diversify. - Coming soon: AdChina “Microblog Marketing Manual: Today & Future”[ PART 2 ]2012 New Digital Technology OutlookSoLoMo, HTML5, Augmented Reality, NFC, QR code, Open Platform, Interest Graph 4
  5. 5. [ PART 1 ]2011-2012 Digital Media Outlook[ 1.1 ] General: Winning on internet = winning the current & future consumers[ 1.2 ] Display Advertising[ 1.3 ] Mobile internet[ 1.4 ] Video[ 1.5 ] Social Media[ PART 2 ]2012 New Digital Technology OutlookSoLoMo, HTML5 , Augmented Reality, NFC, QRcode, Open Platform, Interest Graph 5
  6. 6. Users(millions) PC internet Mobile internet Rural Data source: CNNIC China Internet Statistics2009-2012China internet population exceeded 500 million; rural growth drives long term outlook- Government policies are the main drivers. “The National 12th 5-year Plan” indicates that information technology construction for the rural areas is the main focus of rural development in China in 2011-2015.- The urbanization process also accelerates the progress.Bandwidth upgrade and 3-screen development brings opportunities for new internetapplications, hence drives urban internet growth in near term- “Broadband China” strategy is part of “The National 12th 5-year Plan”. The internet bandwidth in urban cities will be upgraded and the prices will drop dramatically. “3-screen project ”will continue to be important.- Online video, cloud services, and internet TV will proliferate accordingly and change urban internet users’ behaviors. 6
  7. 7. Social media continues growth, mobile to drive social- Growth for traditional social networking and microblogs will slow down. User fatigue starts to appear.- Mobile social isto take off. Weixin* as the killer APP, will lead the next social networking tide. Social media coverage Social media and online video are not yet saturated Online video coverage China data source: CNNIC29th China US data source:Online video to take the lead in digital advertising Internet Statistics comScore Nov. 2011 Jan. 2012- Consumer online video usage will increase dramatically in 2012, driven by: 1. higher speed and lower price of broadband; 2. the Bureau of Radio & TV’s administrative order to limit certain entertainment content on TV.- Advertisers will shift significant advertising budget from TV to internet video. However the online video sites may not be able to absorb all the additional budget because most advertisers only command the traffic from tier 1 and 2 cities, which only accounts for 30%** of the total online video sites’ traffic. 3rd party display advertising platforms which are able to offer solid cross-channel media planning and data solutions will thrive with the opportunity * Weixin is the mobile instant messaging application offered by Tencent ** AdChina platform data, Jan. 2012 7
  8. 8. avg. time spent China’s netizens spend almost as much time on internet as on TV hours/day TV Internet Broadcast Newspaper Magazine CMMS Summer 2007 – Summer 2011Winning on internet = winning current & future consumers 28% of internet users are below 20 years; Younger users (age: 13-45) spend more time on internet than on 30% are 20-30 TV, especially in Tier 3 & 4 cities avg. time spent hours/day (age:13-45) Internet TV CNNIC 29th China Internet Statistics Report Jan 2012 StarcomMediaVest Group “China Yangtze Study: Oct. 2011 8
  9. 9. Internet advertising is under-invested in China- Most Chinese advertisers think that internet marketing is a high priority. Their investment decision is held back by the fact that there are not enough reliable digital marketing partners who can offer measurable services as on TV.- The mature internet advertisers are increasing their budget significantly in 2012 to occupy resources and build customer assets on internet before more competition comes in.- The London Olympics, proliferation of smart phones, and internet’s expansion to the smaller cities and rural areas will bring new opportunities to internet marketing in 2012. China’s internet ad spending as % of the total media budget is ½ of that in the US China data source : GroupM “This Year, Next Year, China Media Forecasters” , Sep. 2010; U.S. data source : eMarketer 2010 data, published in Mar. 2011 9
  10. 10. [ PART 1 ]2011-2012 Digital Media Outlook[ 1.1 ] General[ 1.2 ] Display Advertising : Ad placement through 3rd party platforms to become mainstream[ 1.3 ] Mobile internet[ 1.4 ] Video[ 1.5 ] Social Media[ PART 2 ]2012 New Digital Technology OutlookSoLoMo, HTML5 , Augmented Reality, NFC, QRcode, Open Platform, Interest Graph 10
  11. 11. China display ad as % to total digital spending will grow to 43% in 2014 eMarketer Nov. 2011Display ads to become highest priority for Chinese advertisersGlobal perspectives:-Google to increase investment in display advertising, especially in 4 areas: - Technology to simplify media buying and ad placement - Ad space engagement capabilities - Advertising evaluation mechanism - Advertising operations system for media owners to effectively manage traffic monetization and media planningChina scene:-After the rise and fall of eCommerce fever in 2011, advertisers now have a clearer perception on budget allocation andKPI setting for brand advertising and performance-based advertising.-After trial and testing, the Chinese advertisers have become used to looking beyond PV and clicks to evaluate digitaladvertising. Branding lift and target audience coverage efficiency are to become standard metrics.-Advertisers request display ads to be better combined with social media marketing. 11
  12. 12. 43% advertisers plan to spend more than 25% of their digital Ad placement through 3rd partybudgets in / through? ad networks platforms is a top choice for US advertisers - US advertisers widely recognize the value of ad networks, DSPs*, and ad exchanges for delivering better results and saving budget. - The generally low economic outlook further promoted advertisers’ adoption of 3rd party platforms. - DSP is still in its starting stage in China.25% of advertisers planned to increase their ad network budget - AdChina DSP is probably the only DSP developed for China market with world- class standards. - 4 of the top 6 international 4A media agencies in China adopted AdChina DSP to manage their advertising operations in the past 2 years. We estimate significant growth in China’s DSP business in 2012. AdChina platform ad placement is widely recognized by Chinese advertisers ValueClick “Advertiser Survey 2011” - On average, every client has placed more based on 400+ senior U.S. advertiser than 4 ads with AdChina. Feb. 2011 - We estimate that at least 20% of the internet ads will be placed through 3rd party platforms in China by 2014. *A DSP(Demand Side Platform) is a system that allows digital advertisers to manage multiple ads through one interface. Utilizing a DSP, marketers can manage their bids for the ad space, the pricing, and the data that they are layering on to target their audiences. 12
  13. 13. China branding ad network market will double every year till 2013 iResearch 2010-2011China ad network development report May. 2011Chinese advertisers utilize 3rd party display ad platforms mainly for branding - The Chinese advertisers need the platforms to deliver ads to massive audiences and across hundreds of websites easily. Publisher quality is a high priority.The Harvard Business School research students provided the following POV: - It’s a massive offline market in China. Advertisers recognize 3rd party platforms’ abilities to maximize the reach to consumers, collect data and conduct eCRM to drive offline sales - The Chinese digital market is sophisticated but not complex. Advertisers are good at prioritization. That’s why it’s hard for the market space to support multiple types of 3rd party platforms to develop. Chinese advertisers prefer platforms that can provide to them practical solutions and proven track records. Harvard Business School“China’s Technology-driven Advertising Study”, Dec. 2011 13
  14. 14. The top 3 factors in The top factors in choosing a media partnerchoosing a media partner:- Performance/ROI- Audience targeting- PriceUS advertisers value Behavioral targeting (66%) is believed to be one of the most important types of audience targetingdata-driven advertisingcapabilities- The ROI from behavioral targeting may vary significantly depending on the technological capabilities to process large-scale data and conduct multi-dimensional analysis ValueClick “Advertiser Survey 2011” Based on 400+ senior US advertiser Feb. 2011 Harvard Business School“China’s Technology-driven Advertising Study”, Dec. 2011 14
  15. 15. [ PART 1 ]2011-2012 Digital Media Outlook[ 1.1 ] General[ 1.2 ] Display Advertising[ 1.3 ] Mobile internet : It’s a war. And it’s starting now.[ 1.4 ] Video[ 1.5 ] Social Media[ PART 2 ]2012 New Digital Technology OutlookSoLoMo, HTML5 , Augmented Reality, NFC, QRcode, Open Platform, Interest Graph 15
  16. 16. Mobile advertising has great potential. Tablets are the future stars- Mobile internet user growth CAGR is much higher than PC internet in the comparable period. Smart phone proliferation and decrease in telecom fees are the main drivers.- Tablet computer growth was significant in 2011 and provides new marketing opportunities in the next few years.- 1% of the AdChina online platform visitation (non-search and eCommerce) are from mobile devices at the end of 2011. While the according number from the previous year was only 0.04%. 44.5% of the mobile devices’ traffic are from iPads at the end of 2011. End of 2011 356MM CAGR 48% 2007 50MM *Base: mobile internet users AdChina “2011China mobile internet research report” Jul. 2011 CNNIC 29th China Internet Statistics Report Smart phone changing the world Jan. 2012 - AdChina research indicates that 58% of the mobile users are using smart phones. - 74% of mobile internet users access internet everyday using smart phone and 87% use installed mobile internet applications 16
  17. 17. 55% of app users use apps longer than 1 hour/day 9% heavy users use apps more than 5 hours/day APPs are already among the most important consumer touch points - Consumers use APPs as time fillers and on a frequent basisAPPs are highly fragmented 55% mobile users use more than 5 apps, up by 31% YOY- Number of apps on the global market : App Store & Android Market Dec. 2011 AdChina “2011China mobile internet research report” Jul. 2011 17
  18. 18. 42% of mobile users use LBS* because of convenience Convenience LBS: it’s beyond check- Social needs in and sharing Fashion - As user needs change, new marketing opportunities around Coupons LBS will emerge. Enfodesk Dec. 2011LBS might be the next killer marketing applicationIn 2011a lot of major digital media owners (Sina, Jiepang, Shanda, Tencent, Dianping, etc.) upgraded theirLBS services. New applications include:-Coupon downloads-eCommerce-Location-based social networking-Quick response (QR) code scanning *A location-based service (LBS) is an information or entertainment service which is accessible with mobile devices through the mobile network and which uses information on the geographical position of the mobile device. 18
  19. 19. Chinese mobile internetusers are more willing toreceive mobile ads thanthe US counterparts Awareness of mobile ads Statements- 61% of Chinese mobile users are willing to receive ads for rewards or freebies.- 53% of the Chinese mobile users used a mobile coupon to purchase a product offline. *Base: smart phone owners Actions after noticing a mobile ad *Base: smart phone owners who have noticed advertising on their smartphones Google/IPSOS/MMA (Mobile Marketing Association) Our Mobile Planet Nov.2011 19
  20. 20. [ PART 1 ]2011-2012 Digital Media Outlook[ 1.1 ] General[ 1.2 ] Display Advertising[ 1.3 ] Mobile internet[ 1.4 ] Video : Cross-screen is the gold mine for digital marketing[ 1.5 ] Social Media[ PART 2 ]2012 New Digital Technology OutlookSoLoMo, HTML5 , Augmented Reality, NFC, QRcode, Open Platform, Interest Graph 20
  21. 21. 67% online video users are below 30 Online video user base continues to grow - User composition of online video is much younger than the general internet. End of 2011 325MM CNNIC 29th China Internet Statistics Report CAGR 15% Jan.20122007160MM CNNIC 29th China Internet Statistics Report Jan-Nov. 2011 Jan. 2012 Online video monthly time spent increased 57% Online video is an addictive medium - According to data from (the largest online video website in China), the online video users’ time spent on TV decreased by 63.3%, frequency dropped by 56.4% after they started to watch video online. - The longer a user uses online video, the more the media behavior changes. iResearch iUserTracker Jan-Nov. 2011 21
  22. 22. Cross-screen usage increases year by year TV & internet user overlap is above 50% TV & internet overlap reached 63% in tier 1 cities TV only users decreased year on year China National Resident Survey, 2008-2010 CC11SUAC Mar. 2011 60 top Chinese cities, sample age: 15-60TV and internet complement each other well in terms of reach Internet complements TV reach during day time TV complements internet reach during the night time CMMS2009A~CMMS2010A 22
  23. 23. Pre-roll Interactive pre-rollInteractive pre-rollis coming comScore Data for in-stream Video Advertising Jul. 2011- Interactive pre-roll works well with long video content and to engage young audiences.- Interactive pre-roll is a hot new format on the US market in 2011. AdChina introduced the format to China in Q4 2011 after collecting enough data to prove its value to Chinese advertisers. 23
  24. 24. [ PART 1 ]2011-2012Digital Media Outlook[ 1.1 ] General[ 1.2 ] Display Advertising[ 1.3 ] Mobile internet[ 1.4 ] Video[ 1.5 ] Social Media : The market is looking for a practical social media marketing book[ PART 2 ]2012 New Digital Technology OutlookSoLoMo, HTML5 , Augmented Reality, NFC, QRcode, Open Platform, Interest Graph 24
  25. 25. Online social media user growth slowed down- Mobile social networking is reaching its critical mass. Weixin active users reached 30 million. Nov. 2011 390MM iResearch iUserTracker Jan-Nov. 2011 2011.10 350MMSocial media marketing is at itsearly stage in China- Less than half of the advertisers use social media for marketing purposes in usage of social media marketing China while 80% do so in the US.- Social media marketing is heavily reason of social media under-invested in China. marketing Grant Thornton Booz &Co Buddy Media “International Business Report” Campaigns to Capabilities Nov. 2011 Social Media &Marketing Oct. 2011 25
  26. 26. Social media marketing metrics US advertisers are mostconcerned about Chinese advertisers’ urging question: How to effectively do micro-blog marketing Coming soon: AdChina “Micro-blog Marketing Manual: Chief Marketer Today and Future” “2011 Social Marketing Survey” Oct. 2011 - Limited by the availability of technology and tools, social media marketing is mainly evaluated by the number of followers and forwards currently 26
  27. 27. US advertisers widely use social media for brand building Booz & Co Buddy Media Campaigns to Capabilities Social Media & Marketing Oct. 2011Planning out of the box to unleash the power of social media marketing - Advertisers need to build the strategy and working process to utilize social media to engage with customers, conduct CRM, building word-of-mouth, and collect market insights 27
  28. 28. [ PART 1 ]2011-2012Digital Media Outlook[ 1.1 ] General[ 1.2 ] Display Advertising[ 1.3 ] Mobile internet[ 1.4 ] Video[ 1.5 ] Social Media[ PART 2 ]2012 New Digital Technology OutlookSoLoMo, HTML5 , Augmented Reality, NFC, QRcode, Open Platform, Interest Graph 28
  30. 30. SoLoMo: connecting the digital and real world So-Mo: Connecting with the consumers at real time More and more consumers are using mobile devices accessing social media, checking out micro- blogs and checking in to share their thoughts and activities with friends. Social Where word-of- mouth and viral content fly Mobile ConnectingLo-So: creating word-of-mouth O2O online with offlineConsumers todayare eager to expressthemselves. Socialmedia is their stage. Local Mo-Lo: driving consumers to the stores GeneratingPosting pictures and sales and LBS to directchecking-in to share shopping consumers to theshopping experiences nearby stores andexperiences are outdoor.common activities. 30
  31. 31. Two-dimensional code/quick response code:scan it, and you’ll knowConsumers are scanning every code they can access Newspapers Product Webpages Fliers Outdoor TV Postcards packagingQR code scan enables Sharing Check-in Accessing APP on social product download media informationOnline/Mobile Mobile Coupon Shopping payment download Please try and scan the QR code above : ) 31
  32. 32. Augmented reality: adding new possibilities tomarketing ideas Combining with QR codes: bringing life to the creative - Through scanning the QR codes on magazines, packages or other Combining QR media, the users will be presented with animated content. scanning with LBS - Through scanning the QR code at the store front or outdoor ads, users can see virtual content added to the environment they are in.Augmented reality marketing is not widely adopted yet in China- There are limited mobile applications in China with augmented reality functions.- The market is expecting the big fanfare event. AdChina targets to be the clients’ technology enabler. 32
  33. 33. Near Field Communication: the future star Fast and safe data exchange without touch or connection line -The latest Android 4.0 system includes the Near Field Communication (NFC) technology named Android Beam. Users can easily exchange webpages, maps, and game data at near range with each other. - The NFC technology creates new creative possibilities to APP marketing and enables new interactive experiences for consumers. 33
  34. 34. HTML5: an upgrade to user experiences HTML5 will dramatically enhance mobile experiences: faster, bringing more powerful functions, and better compatibility - According to AT&T, 85% of all smart phones being sold in 2016 will support HTML5 - HTML5 can help marketers to deploy the same creative or campaign easily on mobile devices with different operating systems 34
  35. 35. Open platform: integration & fragmentationIntegration Fragmentation- Through open platform, the user can utilize multiple - Open platform decreased the entry barrier forservices through one single platform, i.e. sharing video developing applications, services, and websites.content to social media, and doing shopping on social A lot of new players will come into the market andmedia. provide more choices to the users. 35
  36. 36. Interest graph: the next hot thing Vertical social networking: based on interest - Through interest graph, users can get to know people beyond “6 degrees of separation” Augmented social networking: stronger media influence - Media based on interest graph push content to users according to their interest. Such content could be highly valuable and attract loyal users. - Fashion industry could be the first one to adopt this technology for marketing. 36
  37. 37. Please follow us on Sina microblog:@AdChina 易传媒 @ 易传媒 ASP @ 易传媒 App 营销方案 @ 易传媒 LBS 营销平台 @ 易传媒 Solutions @ 易传媒 CircleA @ 闫方军 Alan @ 郑靖伟 @ 程华奕 @ 易传媒 -celia @Jing 潘静 @ 王帅民 易传媒 CEO 易传媒 COO 易传媒 CTO 易传媒 CMO 易传媒市场营销副总裁 易传媒媒体副总裁 Our World Class Advisory Board David Rosenblatt Michael Galgon Rick Thompson William A. Sahlman -CEO, Double Click -Principal Advertising -Founder, Playdom -Senior Associate -President, Google Strategist, Microsoft -CEO, Adify &Flycast Dean, Harvard Display Ads -Founder, aQuantive Business School -Board member, Twitter 37