Digital Marketing Trends: A View From Hong Kong

Hong Kong- This past week, ClickZ’s Asia bureau editor Adaline Lau introduced me to more than a dozen digital marketing experts from global creative agencies and small and mid-sized consultancies in Hong Kong. They outlined challenges they’re encountering in this city of 7 million and opportunities they see in mainland China and beyond.

In Hong Kong, some agencies have moved into new offices better suited to meet growing demand, while others are cramming additional workspaces into their buildings’ floor plans. By all accounts, they are fiercely competing to recruit talent to fill positions such as account executives, creative directors, and analytics specialists.

Despite the optimism, agency executives remain grounded. In conversation after conversation, they evinced a modest approach to ramping up their businesses.

One theory: executives here possess a healthy cynicism after living through the severe economic downturn during the 1990s and the dot-com bust that followed.

Hong Kong: Playing Catch Up?

To a first-time visitor, Hong Kong seems ripe for digital marketing, especially mobile and local advertising.

At every turn, there’s another boutique, from designer brands such as Gucci and Prada to lesser-known local designers. In addition, restaurants are scattered throughout the city, including some hard-to-find eateries located many floors above ground level in non-descript office buildings.

In Hong Kong, there’s an average of more than 1.7 mobile devices per person, according to Hong Kong’s Office of Telecommunications Authority. Thus, connecting with people on the go – without spamming them – seems like a logical channel for marketers.

Not quite.

Hong Kong lags other Asia-Pacific cities in the adoption of digital media and advertising, say digital marketing executives.

“There’s a tendency not to be risk takers,” said one marketing executive. As a result, brand marketers have little incentive to test new channels and instead opt for tried-and-true approaches such as splashy out-of-home ads.

Keep in mind, Hong Kong has two official languages – English and Cantonese – while the majority of people living on mainland China speak Mandarin, adding complexity to messaging for such a diverse audience.

Others point out that shopping thrives as a popular pastime and real-life social experience. Because friends flock together to shop, advertisers are bypassing digital channels, instead relying on (paper) loyalty cards to offer discounts to customers and maintaining vibrant storefronts to lure passersby. So while an online group buying service, such as Groupon, may thrive in the United States, a similar service here would need to offer another twist – and be designed for people on the go.

But there’s a community of digital marketers looking to bring about change. The most visible signs are grassroots networking and educational groups catering to digital marketers. For instance, Napoleon Biggs, SVP and head of digital integration at Fleishman Hillard, organizes Web Wednesday Hong Kong, a monthly gathering featuring discussions with industry leaders such as social media expert Jeremiah Owyang. And Kenneth Kwok runs Hong Kong Web Analytics Wednesday, a monthly meeting designed to educate marketers about best practices in digital marketing analytics.

So, will there be a watershed development that prompts audiences to change their behavior and embrace a particular digital media, comparable to Facebook’s decision to open its network to a wider audience beyond college students, or the arrival of the iPhone in the United States? Or will there be a gradual shift in media consumption and communication habits that will affect advertising and marketing?

It’s anybody’s guess.

Instead, mainland China has captured the attention of digital marketers for several reasons: it offers access to larger audiences (Beijing has 22 million residents and Shanghai has 19 million compared to Hong Kong’s 7 million), and localized alternatives to U.S.-based websites and networks are winning audiences.

Consider search engine Baidu’s ability to capture 68 percent marketshare in China compared to Google’s 29 percent – a wakeup call to anyone who had assumed that Google or any other online business – could take its business model and easily replicate it in other countries.

Related reading

Overhead view of a row of four business people interviewing a young male applicant.