Digital advertising in China set to get interesting
Despite Google’s likely shutdown of its Chinese-language Google.cn search engine, marketers and their agencies should not disregard the significant business opportunities available on the mainland.
Negotiations between the international search giant and Chinese officials to allow Google.cn to both remain in China and stop censoring search results for sensitive topics such as human rights appear deadlocked. Yet, even in the light of this digital crackdown, many brands are still recognising the potential in China.
Yes, Google’s departure will likely lower the competitiveness of China’s search industry – even if temporarily – and will certainly affect the search site’s partners. The prospect of higher search ad rates will no doubt worry marketers too. But, for both Baidu’s and Google’s rivals in China, the development will represent a strong call-to-action. Baidu is unlikely to remain unchallenged for very long.
China’s internet is also at a far earlier stage of development that in the US, meaning that online habits are still in their formative stages. Beyond search, there are plenty of opportunities for advertisers looking to leverage digital media. Even now, according to a report in Advertising Age this week, “few focus on search ads, veering instead toward Tencent’s QQ.com portal, social-networking sites such as Renren.com and online retail stores connected with Alibaba Corp.’s Taobao.com e-commerce platform.”
Multinationals may not find China an easy place in which to operate, yet for many the challenges can be overcome with plenty of local knowledge. The depth of required regional and local knowledge isn’t putting serious marketers off, either. Zenith Optimedia reports that ad spending in China jumped 19% in 2009. It expects China to become the fourth-largest global ad market this year.
China is already the world’s biggest market for cars and mobile phones, while in other product categories, sales are growing fast. According to the Advertising Age report, “Unilever, China’s second-largest advertiser after Procter & Gamble, is counting on a 20% jump in its China sales this year. Similarly, No.3 advertiser L’Oreal Group has wracked up nine straight years of double-digit growth in China, with 2009 sales of $1.2 billion, up 17.6% year-on year.”
Tags: Global Brand
