Consider these five factors when planning and buying online ads in China.
2012 planning and budgeting is around the corner. With more global clients visiting China trying to understand this unique marketplace, I reckon to start my first column introducing some of the uniqueness of China, being one of the fastest growing Internet ad spend markets.
1. China is a seller's market. Inventory runs out fast. In China, we have the top 20 sites capturing 75 percent of display revenue in general. The main portal sites are adjusting advertising rate cards on a quarterly basis, around 15 to 25 percent on premium or demanding positions. Video sites are expected to have 50 to 100 percent inflation on pre-roll formats entering 2012. Yet, inventories on individual markets and specific formats are tight and advertisers are asked to commit as early as six to nine months in advance to guarantee good positions.
2. Publishers control the delivery. Third-party ad serving is not welcomed here in the China Internet market. Interestingly, back in 2000 to 2002, big portal sites like Sina or Netease did accept ad serving. However, with the governing bureaus holding sites accountable for improper creative or illegal copy on served ads, sites wanted to be in control of the creative and therefore rejected third-party tags. By 2011 we have noticed some sites are starting to allow ad serving tags but limited to huge spenders and reputable brands only. If you are planning a China buy, make sure you check with sites in advance if they even allow third-party impression tracking. DoubleClick and Mediamind (previously Eyeblaster) are working very closely with various Chinese sites to get internal testing done and white-listed as approved tracking partners. However, it doesn't come as default to be applied on all campaigns. Sites like Sina actually require special approval on impression tracking per campaign basis.
3. Visual proof of advertisement required. Could you imagine marketers keep refreshing computer screens looking for their own ad on sites? Well, it happens when they are buying ad on a CPM basis. I have worked with so many brands requesting for visual proof of advertisements before approving payments. Third-party delivery reports are not provided as default by sites so most advertisers found it difficult to be convinced on the delivery and have to make sure they have a screen capture in record as proof. This partially pushed most sites switching from CPM to CPD (cost per day) ad selling model. It's like newspaper -you place an ad today, the 24 hours' inventory is all yours. Sites selling their inventory at CPM model always have my full respect but there aren't many these days except international sites or special formats in very few sites. Very recently Qunar, a travel search engine, announced to switch its ad selling model from CPM to CPD and frankly, what a disappointment!
4. IAB doesn't really exist here. If your production house charges you per banner format even with slightly different dimensions, say you will be charged twice with one 728x90 and another 728x120 banners, it's time to negotiate a better deal. IAB is in a very difficult position in China to facilitate standardized formats among the sites. Each site has their own list of ad formats and it's not even consistent among different content channels. I have counted more than 10 different banner sizes on QQ. There is no industry guideline regarding ad rate card or format standardization. Advertisers or agencies have to request rate cards and material specifications individually site by site to determine what formats to buy and produce.
5. Ad networks have a tough job here. I started my Internet advertising career at Real Media (currently known as Real Media 24/7) back in 2000 so am always a big fan of ad networks when it comes to online display. Ad network buy is cost efficient and allows different sort of targeting opportunities from geographical, time-specific, contextual, and sometimes even behavioral, etc. Five years ago at ad:tech Shanghai I was talking to a representative from a behavioral targeting company exploring the China market and we both agreed an ad network is not going to explode in this market. Exclusive representation is not a common practice in China and most sites have their own sales force selling the same inventory. Ad networks secure display inventory from sites and resell at rich media formats to allow profit margin so it's not surprised to see ad network CPM are generally higher than result of buying from individual sites. That said, with more targeting applied and relevant messaging in place, we do see better conversion with ad network buys.
Five down, more to go.
Don't get me wrong - the China Internet advertising scene is improving. Video sites and portals are selling pre-roll video formats at CPM basis and allow geo-targeting with a time-specific buy. We see more brand advertisers also asking for better conversion results to transactions or campaign participations therefore sites are more willing to support in identifying the right channel and the right placement, at the right cost.
See you next month for more sharing on the uniqueness of the China Internet advertising scene.
What's New for 2015?
You spoke, we listened! ClickZ Live New York (Mar 30-Apr 1) is back with a brand new streamlined agenda. Don't miss the latest digital marketing tips, tricks and tools that will make you re-think your strategy and revolutionize your marketing campaigns. Super Saver Rates are available now. Register today!
Karen Ho is the head of MEC Interaction China. Karen is charged with leading MEC Interaction, MEC's digital, social, and direct specialism. Karen graduated from the University of Toronto with a Bachelor of Commerce in 1999. She began her career with online media owner, Real Media Limited, in Hong Kong in 2000, where she managed website and business partnerships. Her digital planning career took off at Tom.com and in 2006 Karen moved to Shanghai to lead media strategy and innovations at Isobar-linked company, wwwins Consulting, working on clients such as Coca Cola and Xintiandi. In 2008, Karen returned to Beijing where she was digital director, planning and ad ops/analytics for OMD. There she built and managed media teams for clients such as Intel, GE, and Apple and started the first ever ad operations and analytics department for OMG. Karen has deep knowledge of CRM, media planning, and strategy, and a wide experience of ad serving, social, and other digital tools.
Singapore, 3-4 November
Hong Kong, 8-9 December
Hong Kong, 8-9 December
Google My Business Listings Demystified
To help brands control how they appear online, Google has developed a new offering: Google My Business Locations. This whitepaper helps marketers understand how to use this powerful new tool.
5 Ways to Personalize Beyond the Subject Line
82 percent of shoppers say they would buy more items from a brand if the emails they sent were more personalized. This white paper offer five tactics that will personalize your email beyond the subject line and drive real business growth.