Mediasmith Anvil


	Mediasmith Anvil
	Volume 4, Issue 9 December 22, 2005

A Letter from Shanghai Part II

By David L. Smith

Mediasmith's President and CEO continues his report on a "mind boggling" journey to ad:tech Shanghai where search, consumer generated media, ad serving, metrics and more are discussed.Click here to see the previous piece.

Search
There is no question that search is a major factor in China, but it has not evidenced itself in the trade show as yet relative to SEM and SEO companies.

According to Kevin Ryan’s panel, there are 300 million searches a day in China and growing. That’s compared to 400 million a day in the U.S. and the U.S. has flattened out in growth while the China market is rapidly growing. In addition to the major multi-national search companies/portals (Google, Yahoo!, and MSN) there is a strong local entity - Zhongsou (roughly translated as China Search). So, unlike the U.S. where search took some time to grow, search is already a major factor in Chinese internet usage.

As mentioned in Part I, IM, especially wireless IM is massive in China. The consumer market seems to be taking a different shape here versus the U.S. and Europe. The youth market combined with the third screen phenomenon means that the “web anywhere” will be a large factor as the Chinese and the rest of the Asian market grows.

Mediasmith Morsel
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Search creative does exist! See how your site stacks up against its competitors’ Search creative as well as “Organic” and “Paid” Search listings. Email Bob Heyman, our Chief Search Officer, at bheyman@mediasmith.com to take us up on our offer and find out more about our Search Consulting Practice.

Blogs and BBS
Consumer generated media was another important topic on Wednesday’s panels. The use of BBS (message boards) has also emerged as a huge factor in China. By one estimate, there are 40 million message boards in China with 35 million visitors a day. The conversations going on each day are in the millions. A major form for the BBS forums is on portals where there is a lot of discussion about products and corporations. For example, the historical conflicts between China and Japan result in a significant backlash towards autos and other Japanese products sold in China on BBS forums. The products still sell, but the issue is a lively one. As this medium grows, it will be a major PR problem or opportunity for those doing business in China.

Mediasmith Morsel
Streaming Media Consumption is Driven by Mature Audiences
comScore recently published findings, which appeared in Mediapost that adults 35-54 consume 45% of streaming video content. Users in this age bracket are 20% more likely to use streaming video than the average Internet user. Erin Hunter, Senior VP of comScore Networks Media and Entertainment Solutions noted that these findings “run contrary to public perception,” and that “it's not just 'college kids' or 'bleeding edge' Internet users who are streaming videos.” Ms Hunter claims that “This creates a fantastic opportunity for advertisers to capitalize on what is now a mainstream audience."

Metrics
The discussion of metrics took many forms, both through the panels and in offline individual conversations. One major barrier to companies like comScore and Netratings successfully documenting the real size and actual usage patterns in China are governmental issues with the permission to recruit panels. This also affects the ability of companies like Dynamic Logic and Insight Express to perform awareness research.

The use of third party ad serving (3PAS) is also not a major factor in Asia which limits the ability to track and optimize campaigns. One panelist pointed out that Yahoo! in Japan only allows one creative change per campaign. For China, the different views from the multi-national companies and Chinese companies are interesting and important. Much of the interactive advertising purchased on Chinese portals and other major sites is time, rather than impression based. There is a push by multi-national agencies to move to a CPM model and to embed “web bugs” that would permit tracking and optimization. To date, the Chinese publishers resist this move to a more accountable and more flexible purchasing pattern. One of the major factors in Chinese Web advertising is the ability for top management on the client side to see their advertising, thus the preference for the time based selling model. In addition, there is distrust of the research and 3PAS based data. There is much more inclination to trust the advice of one’s peers on the effectiveness of a campaign. This mistrust will need to be overcome if the multi-national methodologies of performance-based advertising are to take hold.

Mediasmith Morsel
Golden Girls Make Comeback
Marketers continue to turn a blind eye to what Mediaweek calls the “Golden Bull’s-eye”, women aged 50+. According to the U.S. Census Bureau, this demographic is growing in size, with total adults aged 50+ projected to increase 72% by 2020. What is even more attractive about this demo is that they are responsible for 80% of household spending. Additionally, per capita spending is 2.5 times the national average in households 50+.

This first edition of ad:tech in China was definitely bi-polar. From one side, the Westerners served an important and necessary role in showing the Chinese market our methods, routes to success and case studies. From that standpoint, many in the Chinese audience approached the conference as an advanced study course. From the other side, there were glimpses of issues such as usage patterns, sales methodologies and metrics that are unique to China. Nowhere in this forum was there an opportunity for some “Chinese only” panels to vet their issues. While such open discussion may be counter to Chinese culture, it is clear to many observers that panels dominated by Chinese rather than Westerners will be an important component for the future. While it would be a mistake to swing all the way in that direction, a more balanced approach may be beneficial in the future.

A version of this article originally appeared in iMedia Connection.

David L. Smith is President and CEO of Mediasmith , an Integrated Media Agency based in San Francisco. He speaks regularly at industry events including ad:tech, iMedia and OMMA.

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