The Tencent and Alibaba mobile commerce war will continue to heat up and there will be a new competitor for Baidu in China and beyond.
2014 is shaping up to be an interesting time for online video, search marketing, and mobile commerce in China. Below are five digital media buying trends marketers should take note of:
1. Online TV Channels Focus All Firepower on Content Exclusivity
Online TV (OTV) is the fastest-growing channel in China both in terms of traffic and ad spending. In order to acquire new users and retain their current fan base, the OTV channels have been relentless in content acquisition. We’ve seen this in 2013 when Sohu acquired the online exclusive broadcasting rights for The Voice of China. According to latest data from Sohu, the number of concurrent users watching online topped 10 million during the initial broadcast. Tencent on the other hand, acquired the exclusive broadcasting rights of popular show The Song of China, as well as the 2014 World Cup. iQiyi went as far as hiring the formal CCTV host Ma Dong as their new chief content officer. From a media-buying perspective, brands can ride on the show’s popularity via content to target their pre-rolls. It will be more cost effective than buying them on CCTV or the popular provincial TVs.
2. 360 Search Engine Grows in Market Share and Sees Increasing Advertiser Adoption
The latest market data from Q4 2013 shows 360 search’s market share at around 20 percent, while Baidu dropped from 67 percent in early 2013 to 60 percent. From an ad product offering perspective, 360 "copied" nearly all commercial products from Baidu, even down to the look and feel. But since lots of advertisers haven’t started investing in 360 yet, we’re seeing lower cost per clicks (CPC) in 360 across all categories compared to Baidu. Now if 360 search gains more market share in 2014, we could be seeing an end to the Baidu monopoly in China.
3. Mobile Commerce War Heats Up as Tencent and Alibaba Go Head to Head
2013 was an amazing year for Tencent WeChat, which gained more than 600 million users in China. Its next step is leveraging WeChat’s huge user base to gain a foothold in the growing m-commerce sector. However, Tencent is facing competition from e-commerce giant Alibaba. Alibaba is the dominant company in e-commerce with Alipay and Taobao. Hence their natural expansion is to go mobile. The first battle between the two giants has already started in taxi m-commerce. Alipay partnered with taxi app Kuaide and WeChat did the same with the Didi app. As competition widens, we can only expect m-commerce capabilities to extend into other categories. From a media buying perspective, many brands are already investing in CRM activities on WeChat, but currently WeChat doesn’t offer payment APIs for WeChat brand accounts. It’s only a matter of time until functionality will be added and when it does, we could be seeing a shift in consumer purchase behavior from PC e-commerce to mobile commerce.
4. Ad Tech Vendors Try to Control DSP Budgets by Providing DMP Offerings
Demand side platform (DSP) is another rising trend in China, with iResearch estimating a 116 percent growth in ad spending this year. In 2013, many DSPs were just establishing themselves in the market and the big shift was from ad network to DSP. But with increasing advertiser adoption, various ad tech vendors are attempting to lock down their clients via a first-party demand management platform (DMP) offering because they know in the end, whoever controls the data will control the budget. However, brands should definitely weigh the pros and cons of letting a third-party DSP handle consumer cookie data. The benefits of a DSP-owned brand DMP is that they’ll minimize loss from having to cookie map with a tracking vendor or agency trading desk (ATD). But the cons are transparency and vendor lock-in.
5. Media Channels Reluctantly Accept Ad Serving but Only to Big Advertisers
The lack of ad serving has always been a pain point in China. Without it, we cannot analyze advance metrics like viewable impressions. However, many brands with big budgets are demanding accountability. So some Chinese media are starting to allow ad serving vendors from Sizmek (formerly Mediamind) and Miaozhen. The first adopters of ad serving are big budget channels like portals and OTV. Sizmek has also secured a partnership with Tencent last year. However, ad serving will not be the standard here in China. It’s only available upon request by the biggest spenders.
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Currently digital director for Mindshare Beijing, Charlie has over five years of experience covering both IT consulting and ad agency industries. He was previously technical director at Tribal DDB Hong Kong, where he led the implementation of analytics and technical innovation across digital campaigns. His previous experiences include data analytics director at Bizcom Consulting in Beijing, and business intelligence analyst at Deloitte Consulting in the U.S. Charlie's project portfolio includes digital analytics, digital campaign production, marketing data integration, as well as large scale data warehouse implementations. He has worked on numerous digital accounts including: McDonald's, Manulife, Wrigley's, Smart Communications, Financial Times, and Friso.
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