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In China, a rapid jump to mobile advertising

12/22/2014| 10:11:22 AM|

With the largest pool of smartphone users in the world, China has become a petri dish for marketers and technology companies alike to test ways to get consumers to buy both online and off.

HONG KONG — Liu Xuelong, a television and documentary producer in Beijing, hasn’t used his television in years. He gets all of his entertainment on his iPhone 6 Plus, where he also taps a plethora of apps to buy plane tickets, pay bills, talk with clients.

Weixin, a text and messaging app, is among his favorites. “Every morning the first thing I do when I wake up is log onto Weixin to see what new things my friends have shared online overnight,” said Mr. Liu, 25.

Advertisers increasingly want to be part of Mr. Liu’s digital world — and of the other 527 million people in China with smartphones. Next year companies are expected to spend more money on digital advertising than on television campaigns in China.

It is a stark shift from three years ago when nearly half of the advertising dollars went to television and just 14 percent went to digital, according to ZenithOptimedia, an advertising agency. China is also diverging from the United States, where television continues to dominate.

“It’s the first time we’ve had an enormous middle class emerge while being digitally connected,” said Jeff Walters, a partner at the Boston Consulting Group in Beijing. “It sets the stage for why digital advertising is so important.”

With the largest pool of smartphone users in the world, China has become a petri dish for marketers and technology companies alike to test ways to get consumers to buy both online and off.

Homegrown social media platforms in China are at the center of the push. Facebook, YouTube and Twitter are all blocked in China, giving platforms like Tencent’s Weixin — known as WeChat outside the country — and Sina Weibo an advantage.

Coca-Cola tapped into Weixin’s built-in reader for QR codes, two-dimensional bar codes, to start its Lyric Coke campaign in China. Coke bottles there featured famous Chinese lyrics like “Baby, I’m sorry,” and “I love summer.”

Coca-Cola then encouraged consumers to share a 10-second clip of a song with friends through social media by scanning the QR code on the bottle. Since its start in May, the Coke campaign has generated over three billion views, according to Isobar, the company responsible for the campaign.

Five years ago, marketers could get away with simply using the same ads they used globally and just translating the message, said Shaun Rein, the founder and managing director of the China Market Research Group. Today, they have to speak to the Chinese dream.

“What is happening is that Western brands have to create new aspirations that the Chinese consumer wants,” Mr. Rein added.

In its campaign, Coke used contemporary Chinese pop songs. Ads for North Face, the outdoor wear company, featured images of animals from an African safari, in an effort to appeal to the growing legions of Chinese travelers.

As in the United States and Europe, advertisers have to learn to adapt to changes in the digital landscape, which in China can unfold at breakneck speed.

For several years, the microblogging site Weibo was the most popular forum in China. Much like Twitter, the platform allowed users to broadcast information to any user.

But last year in an attempt to quiet public debate, the government cracked down on some of the forum’s most prominent verified commentators, nicknamed the Big Vs, accusing microbloggers of spreading false statementsand detaining them.

This prompted some Weibo users to leave the site. At the same time, Weixin was quickly gaining popularity as free alternative to text messaging.

Weixin is now the most popular forum in China. Weixin and its international version WeChat together have 468 million active users. Weibo has 167 million active users today.

“I’ve been here four years. In that time I’m now on the third dominant social network — first it was Renren, then Weibo and now it’s WeChat,” said Chris Jones, the executive creative director at the ad agency Wunderman in China.

Weixin’s particular quirk — that users communicate only with friends and contacts within their circle — has allowed companies to develop direct relationships with consumers. But it also poses a challenge since users have to first choose to include a brand within their Weixin network.

The fashion house Burberry worked its way into consumers’ circles by giving users a chance to watch its Autumn-Winter 2014 runway show in real time, along with commentary from designers and celebrities watching the show. To get access to the show, users just had to add Burberry’s public account to their Weixin network.

Once Burberry is in their network, the fashion house can target users directly in the future. One interactive feature prompts users to click on “My Burberry” and type out their initials. An image of a monogrammed bottle of perfume then appears, along with details of how to buy it.

Not all digital ad campaigns in China have gone smoothly. One Chinese company called Tidy Laundry recently tried to stir up some attention online with a video posted to Youku Tudou, a Chinese streaming video site. In the video, two young women strip down to their underwear on the Shanghai metro. A man wearing a blue uniform then enters the subway car and hands them a clean set of clothes, which they change into. The Shanghai police fined the company, according to state media.

Televisions and other more traditional advertising venues also play a complementary role in the digital world.

This year, Oreo began Play Together, a campaign that riffed on the idea that children don’t spend enough time with their parents, a subject of debate in China. Collaborating with Weixin, Oreo created an app that allowed parents and their children to take photos and turn them into playful emoticons to send to friends.

The campaign also featured a television ad for the Weixin campaign in which a mother and her daughter play together and share a bag of Oreos. As part of the media blitz, it used celebrity dads from the popular reality television show called “Father, Where Are You Going?” to promote the campaign through their own microblogs.

Television, too, helps bridge the generational gap. Even though Chinese consumers are highly connected, not everybody is getting the messages that brands are sending.

Mr. Liu’s father is one of them. Mr. Liu bought a Samsung smartphone for his father, who lives in Weifang, a city in Shandong Province, and taught him how to use Weixin so that they could video-chat.

But it could be a while before his father gets the hang of Weixin, Mr. Liu said. “I am the only friend in his Weixin contact list, actually.”

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TAGS: smartphone | marketing | mobile
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