Top Biz News
Advertising industry optimistic about 2010
By Yu Tianyu (China Daily)
Updated: 2009-12-14 08:04
A digital world
Brien said the financial downturn has put pressure on all advertising agencies to demonstrate better value to their clients. "In that way, the professional standards of the advertisement industry have improved, which is a good thing," he said.
Zha Wei, vice president of FilMore Media, said technology has also transformed the advertising industry. Consumers have experienced tremendous lifestyle changes, as they spend more time with the Internet than with television and newspapers.
With the continuous growth of digital media and emerging technologies, consumers, especially younger generations, are changing the way they think about the media, Brien said.
Brien said companies will take their advertising money out of traditional TV commercials and direct their spending to website advertisements. Or they will abandon a newspaper ad campaign to spend on targeted text ads on mobile phones, he said.
Neil Ducray, managing director of Touchmedia, China's largest in-taxi interactive media company, said there are fewer advertising dollars in the market, and most advertisers are looking for a measurable return on investment (ROI).
"It is a huge opportunity for Touchmedia, since everything consumers do with their screens can be precisely measured," Ducray said.
In Beijing, Shanghai, Guangzhou and Shenzhen, cities in which Touchmedia operates, there are more than 10 million taxi passengers a day. About 89 percent of those passengers are interested in their backseat screens, according to the company's surveys.
"So in tough times, when advertisers were feeling harder hit and reducing their budgets, we had more clients, and they were spending a higher percentage of their budget with us," Ducray said.
The new media landscape is going to redefine marketing, Brien said, adding that with booming business from the Internet search engines and social media, advertising agencies are embracing a digital world.
Analysts estimated that the digital media market in China will grow between 30 percent and 40 percent during each of the next three years to surpass 300 billion yuan by 2012.
Since 2008, companies like Coca-Cola, Procter & Gamble (P&G) and China Mobile have been investing more advertising money in digital media advertising platforms, said Zhou Haiquan, a senior analyst with Analysys International.
"We're striving to invest in new technologies, because this is where you will find our clients and also where our clients can find consumers," Brien of Mediabrands said.
"The key for advertising agencies to survive or succeed depends on how they operate in a digital world," he said.
In February, subway digital media operator Digital Media Group attracted $30 million in investments from the Shanghai-based Gobi Fund and the international investment group Oaktree Capital Management LLC. In April, ToWoNa, the country's largest bus digital media operator, successfully attracted a third round of investments from private equity firms.
Xu Weifeng, president of PPS, the world's largest Interactive Personality TV provider, said that PPS's advertising income is expected to increase fivefold this year.
Additionally, "62 percent of Internet users are actively involved in social networks", Brien said.
"The power of social media and social marketing must be understood and should be integrated into the branding strategies we provide to our clients."
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"The information channel has become more personal with the emergence of social media. The way promotion and advertising works is going to be more about a conversation. So we require our advertising products to be more engaging and create a relationship with the consumers," he said.
"We are also developing activities, including promotional concerts, fashion shows and sports events, to ensure the brands or products we promote can be represented in a surprising and creative way," Brien said.
Li Yifei, chairwoman of Vivaki of Publicis Groupe Greater China, predicted that China's advertising spending will maintain 10 percent year-on-year growth in 2010, exceeding the average growth rate internationally.
Li said she believes that advertising investments in television will increase 10 percent, and that there will be an 8 percent increase in spending on outdoor media.
