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ZenithOptimedia - China Media & Digital Scene 2014

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ZenithOptimedia - China Media & Digital Scene 2014

  1. 1. CHINA ECONOMIC OVERVIEW
  2. 2. CHINA GDP STEADIES UNDER RE-BALANCING While GDP growth has decelerated as expected, it has tracked neatly to the official target of 7.5% Source: National Bureau of Statistics –July 2014 Less dependence on investment in infrastructure and capital-intensive industries means a greater focus on domestic consumption. FROM BUILDINGS, INFRASTRUCTURE, & MANUFACTURING… …TO CONSUMPTION AND SERVICES 9.5% 9.1% 8.9% 8.1% 7.6% 7.4% 7.9% 7.7% 7.5% 7.8% 7.7% 7.4% 7.5% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% Q22011 Q3 Q4 Q12012 Q2 Q3 Q4 Q12013 Q2 Q3 Q4 Q12014 Q2 CHINA'S GDP GROWTH YEAR-ON-YEAR 2
  3. 3. GDP PER CAPITA GDP per capita rises, but plenty of room to grow at just 29% of the global average. Source: National Bureau of Statistics -2014 Q2 Household consumption rate* is ultra-low at roughly 34%. Some economists think that China’s consumption rate is lower than the U.S.’s ever was in its entire history. *Household final consumption expenditure (formerly private consumption) is the market value of all goods and services, including durable products (such as cars, washing machines, and home computers), purchased by households. It excludes purchases of dwellings but includes imputed rent for owner-occupied dwellings. It also includes payments and fees to governments to obtain permits and licenses. Source: World Bank National Accounts data and OECD National Accounts data files -2014 RMB 22,077(USD $3583) 2014 GDP Per Capita -China USD$12,356 2014 GDP Per Capita –Global Average 1,565 1,731 1,940 2,203 2,403 2,611 2,870 3,122 3,345 3,583 0.0 500.0 1000.0 1500.0 2000.0 2500.0 3000.0 3500.0 4000.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 GDP PER CAPITA (USD) +7% YOY VS. 34% 69% 58% 52% 3
  4. 4. CONSUMER SENTIMENT RECOVERY Source: BCG China Consumer Sentiment Survey 2011-2014 36% 38% 33% 25% 40% 29% 40% 44% 24% 33% 27% 31% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2011 2012 2013 2014 MIDDLE-CLASS AND AFFLUENT CONSUMER INTENTION TO SPEND -COMPARED TO LAST YEAR Plan to spend more Plan to spend about the same Plan to spend less Compared to the performance of the past two years, consumer sentiment has made a recovery, with 75% planning to spend at least as much as last year. 75% 67% 62% 64% 4
  5. 5. LOWER-TIER GROWTH DRIVERS However, it’s not upper tier consumers, but rather lower tier consumers, who are responsible for the overall improvement in consumer sentiment. Source: BCG China Consumer Sentiment Survey 2011-2014 35% 36% 31% 26% 28% 34% 0% 5% 10% 15% 20% 25% 30% 35% 40% Big Cities Small Cities % OF MIDDLE-CLASS AND AFFLUENT CONSUMERS WHO PLAN TO SPEND MORE THAN LAST YEAR 2012 2013 2014 -3% PY -7% P2Y +8% PY 5
  6. 6. SIX MEGATRENDS DRIVING CHINA 1. URBANIZING A BILLION PEOPLE 2. HUGE MANUFACTURING SCALE 3. RISING CHINESE CONSUMERS Source: McKinsey April 2014 300 million have moved to cities already and 350 million more are on the way. The manufacturing base has increased more than 18-fold in the past 30 years and is worth $2.2 trillion annually in value added. An additional 200 million people will enter the middle class by 2026, joining 300 million who have done so in the past 30 years. 4. MONEY –AND LOTS OF IT 5. THE BRAINPOWER BEHEMOTH 6. THE CHINESE INTERNET The country has more than $15 trillion in bank deposits, growing by $2 trillion a year. Spending on education has doubled, and the number of college graduates has increased more than 7-fold since 1998. Even though penetration is comparatively low, China still has more internet users than other country and it’s still exploding. 6
  7. 7. CHINA ADVERTISING OVERVIEW
  8. 8. TOTAL MONITORED AD INVESTMENT Media: TV/Radio/Newspaper/Magazine/Outdoor/internet, exclude all no-cost items & Hong Kong TV Media, (Total monitoring Ad Investment include new added media, while growth rate exclude new added media) 8.0% 6.5% 6.4% 5.2% 6.6% 10.9% 9.9% 2.7% -1.3% 0.6% 3.0% 5.8% -0.2% -2% 0% 2% 4% 6% 8% 10% 12% 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 Jun. 2013 Jul Aug Sep Oct Nov Dec Jan. 2014 Feb Mar Apr May Jun Ad Investment YOY Growth TOTAL MONITORED AD INVESTMENT (JUN YTD 2014): RMB 554,963 MILLION RMB: Million Source: CTR AdEx Power 2013-2014; iResearch 2014 Growth in monitored advertising spend for this year has not been as aggressive, averaging in at just 2% for YTD 2014 compared to 7.6% in the second half 2013. June YTD 2014 2.0% YOY Growth H2 2013 7.6% YOY Growth 8
  9. 9. ZENITHOPTIMEDIA ADFORECAST 4% 4% 4% 4% 4% 4% 2% 2% 2% 2% 1% 1% 13% 14% 14% 15% 14% 14% 22% 19% 16% 12% 10% 8% 43% 41% 39% 36% 33% 30% 14% 19% 25% 31% 37% 43% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2011 2012 2013 2014e 2015e 2016e ZENITHOPTIMEDIA AD FORECAST Radio Magazine Outdoor Newspaper TV Internet Source: ZenithOptimediaAdForecast-Q2 2014 Digital continues to draw advertising investment on TV and Newspaper, hitting nearly one-third of total spending for 2014. +6 pts. -3 pts. -4% pts. 9
  10. 10. TOTAL MONITORED AD INVESTMENT BY SECTORS (JUNE 2014 YTD) RMB: Million -4% 5% -1% 10% 8% 10% -1% -3% -24% -21% -30% -25% -20% -15% -10% -5% 0% 5% 10% 15% 0 5000 10000 15000 20000 25000 30000 35000 40000 45000 50000 Food and Drink Business and Service Toiletries Pharmaceuticals Automobiles Real Estate & ConstructionIndustry Leisure Post & Communication Finance & Investment Personal Items Ad Investment YOY Growth Media: TV/Radio/Newspaper/Magazine/Outdoor/internet, exclude all no-cost items & Hong Kong TV Media, (Total monitoring Ad Investment include new added media, while growth rate exclude new added media) Source: CTR AdEx Power 2013-2014; iResearch 2014 MONITORED AD INVESTMENT BY CATEGORY Key drivers of growth come mainly from Pharmaceuticals, Automobile, and the Real Estate & Construction industries. 10
  11. 11. OVERALL MEDIA LANDSCAPE
  12. 12. MEDIA SHARE OF TIME SPENT Digital will soon reach half of all time spent on media, up from just a third of time spent two years ago. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2012 2013 2014 Radio Newspaper Magazine TV Internet Mobile Internet 32% digital 37% digital 44% digital 68% traditional 63% traditional 56% traditional SHARE OF TIME SPENT 2012-2014 Source: CMMS Summer 2014 12
  13. 13. DIFFERENT TIERS ANALYSIS 0.3 0.2 0.2 0.2 0.2 0.1 0.2 0.2 0.2 0.6 0.5 0.5 0.4 0.4 0.4 0.4 0.4 0.4 0.1 0.1 0.1 0.0 0.0 0.0 0.1 0.1 0.1 3.2 3.0 3.0 2.7 2.6 2.4 2.3 2.3 2.2 1.9 2.1 2.6 1.3 1.4 1.8 1.5 1.5 1.7 0.2 0.3 0.6 0.1 0.3 0.5 0.4 0.4 0.6 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 2012 2013 2014 2012 2013 2014 2012 2013 2014 Tier 1 Tier 2 Tier 3 TIME SPENT ON MEDIA PER DAY, BY CITY TIER 2012-2014 Mobile Internet Internet TV Magazine Newspaper Radio Source: CMMS Summer 2012-2014 34% digital 39% digital 45% digital 30% digital 34% digital 43% digital 38% digital 40% digital 45% digital While lower tiers spend slightly less time overall on media, the trend of increasing time spent on digital is true across all tiers. 13
  14. 14. MEDIA CONSUMPTION BY AGE 0.2 0.1 0.1 0.2 0.2 0.2 0.2 0.4 0.2 0.3 0.4 0.4 0.4 0.5 0.1 0.1 0.1 0.1 0.1 0.1 0.0 2.5 1.9 1.9 2.1 2.3 2.4 3.1 2.0 2.1 3.0 3.1 2.8 2.4 0.8 0.5 0.7 1.0 0.9 0.7 0.5 0.1 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 Total Population 15-19 20-24 25-29 30-34 35-39 40+ Mobile Internet Internet TV Magazine Newspaper Radio 56% digital 62% digital 59% digital 54% digital 48% digital 20% digital TIME SPENT ON MEDIA PER DAY, BY AGE GROUP 2014 Digital has in fact already become dominant for the post-80s and post-90s generation at nearly 60% of all time spent. 44% digital Source: CMMS Summer 2014 14
  15. 15. CHINA DIGITAL LANDSCAPE
  16. 16. TOTAL POPULATION 28% 72% OF NETIZENS URBAN RURAL INTERNET PENETRATION 7% YOY 46% OF TOTAL POPULATION 632,000,000 NETIZENS 527,000,000 83% OF NETIZENS MOBILE WEB MOBILE NETIZENS 18% YOY Nearly half the population has internet access, a 7% increase YOY. Sources: National Bureau of Statistics of China July 2013; CNNIC July 2014 DIGITAL LANDSCAPE1,364,655,000 16
  17. 17. TOTAL INTERNET POPULATION 2010-2014 DIGITAL AD SPENDING BY FORMAT 13% 21% 29% 31% 34% 35% 35% 28% 28% 27% 26% 26% 26% 26% 37% 30% 24% 23% 21% 21% 20% 5% 6% 7% 8% 8% 9% 9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2011 2012 2013 2014e 2015e 2016e 2017e Other Email Classifieds Text Link Rich Media Video Display/Banner Search Vertical Search Source: 2014 China Online Advertising Report -iResearch -May 2014 SHARE OF DIGITAL AD SPENDING IN CHINA BY FORMAT Search and E-commerce take the lion’s share of digital spending, while video maintains its growth and display is in steady decline 88% 87% 85% 83% 17 (e-commerce sites, travel sites etc.)
  18. 18. DIGITAL CHANNELS SPENDING GROWTH Search Advertising WeChat Industry Verticals Microblogs Video Advertising Mobile Advertising (Mobile Phone) Social Networks Real-Time Bidding (RTB) Mobile Advertising (Tablet) Portal 89% 70% 59% 52% 43% 41% 35% 29% 22% 22% Large/Slight Increase Source: 2014 China Digital Media Survey –R3 Worldwide and Admaster 72% 50% 48% 41% 43% 41% 24% 22% 15% 22% 17% 20% 11% 11% 0% 0% 11% 7% 7% 0% -80% -60% -40% -20% 0% 20% 40% 60% 80% 100% ADVERTISER’S DIGITAL MEDIA SPENDING CHANGE FOR 2014 Growth for Search and WeChat advertising are claimed to have the biggest gains, despite limited advertising possibilities still in WeChat. 18
  19. 19. TOTAL INTERNET POPULATION 2010-2014 338 384 420 457 485 538 564 591 618 632 233 277 303 318 356 388 420 464 500 527 0 100 200 300 400 500 600 700 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Total Internet Mobile Million Users Source: CNNIC 2010-Jul 2014 Growth of total internet users is correlated with the growth of mobile netizens. MOBILE NETIZENS 19
  20. 20. MEDIA CONSUMPTION ON PC On PC, most categories remained stable, with the exception of social platforms dropping in both coverage and time spent. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% MONTHLY COVERAGE BY CATEGORY Jun-13 Jun-14 -4.4% reach Source: iUserTracker Jun 2013-2014, coverage don’t include software on PC (might affect video category) 34% 35% 18% 14% 10% 10% 8% 8% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Jun-13 Jun-14 SHARE OF TIME SPENT Video Social Search E-commerce News Game Entertaining Finance Others -4 pts. 20
  21. 21. MEDIA CONSUMPTION ON MOBILE 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% MONTHLY COVERAGE BY CATEGORY Jun-13 Jun-14 -11% Source: mUserTracker Jun 2013-2014, mobile applications only, does not include mobile sites +18% -12% -13% -11% +9% 10% 23% 20% 22% 12% 10% 12% 10% 7% 5% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Jun-13 Jun-14 SHARE OF TIME SPENT Video Instant Messaging E-Reading Browser Game Social E-commerce Music Others +13 pts. -3 pts. VIDEO SOCIAL On mobile, consumer attention has shifted away from traditional social, game and even music, towards video, IM and payments. 21
  22. 22. MOBILE
  23. 23. INTERNET PENETRATION BY DEVICE 2010-2014 83% 80% 82% 79% 78% 71% 71% 70% 70% 70% 69% 72% 72% 70% 73% 72% 74% 79% 81% 83% 35% 40% 50% 49% 49% 45% 46% 47% 44% 44% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Desktop Mobile Laptop -0.1% -3% +5% reach Source: CNNIC 2010-Jul 2014 Mobile internet reach continues to grow while older devices of desktop and laptop begin to dip. REACH BY DEVICE 23
  24. 24. SHARE OF MOBILE ADVERTISING Sources: PWC Mobile Advertising in China –May 2014 Mobile continues to gain share within digital ad investment. 4,710 6,500 9,294 12,563 16,761 21,021 25,750 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 2011 2012 2013 2014e 2015e 2016e 2017e MOBILE AND NON-MOBILE DIGITAL ADVERTISING (MILLION RMB) Mobile Internet Advertising Non-Mobile Internet Advertising 10% 9% 11% 12% 13% 14% 16% 24
  25. 25. 2.0 2.1 3.0 3.1 2.8 2.4 0.8 0.5 0.7 1.0 0.9 0.7 0.5 0.1 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 Total Population 15-19 20-24 25-29 30-34 35-39 40+ Internet Mobile Internet TIME SPENT ON MOBILE VS. DESKTOP TIME SPENT ON MOBILE INTERNET VS. DESKTOP INTERNET Sources: CMMS Summer 2014 25% of a user’s time on digital is now directly on mobile phone. 25
  26. 26. SMARTPHONE PENETRATION Source: eMarketerJune 2014 353 446.8 521.7 574.1 621.8 666.5 709.9 69% 27% 17% 10% 8% 7% 7% 26% 33% 39% 42% 46% 49% 52% 0% 10% 20% 30% 40% 50% 60% 70% 80% 0 100 200 300 400 500 600 700 800 2012 2013 2014e 2015e 2016e 2017e 2018e SMARTPHONE USERS (MILLIONS) Smartphone Owners % Change % of Population Smartphone growth continues, while at a slower pace than previous years given that 39% of the population are already owners. 26
  27. 27. TABLET PENETRATION Tablet ownership in China among netizensranks among the highest in the entire world, ahead of more developed nations such as the UK and the US. Source: eMarketer, Global WebIndex–July 2014 41% 41% 39% 36% 36% 33% 34% 35% 36% 37% 38% 39% 40% 41% 42% Singapore China United Kingdom United States Hong Kong % PENETRATION AMONG NETIZENS 27 Note: It is likely that China numbers are inflated due to sample bias towards more affluent consumers
  28. 28. MOBILE CARRIERS 41% of all mobile netizens have high speed mobile access, with some 20 million early adopters already making the move to 4G (still limited in geographical access). 760.1 532.2 152.6 75.3 488.9 240.9 143.3 104.7 20.4 20.4 0.0 200.0 400.0 600.0 800.0 1,000.0 1,200.0 1,400.0 Total China Mobile China Unicom China Telecom MOBILE SUBSCRIBERS BY CARRIER (MILLIONS) Other Subscribers 3G users 4G users 47 87 128 181 234 325 417 489 20 0 100 200 300 400 500 600 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 TOTAL 3G AND 4G SUBSCRIBERS IN CHINA (MILLIONS) 3G Subscribers 4G Subscribers Source: Mobile Provider Claimed Data 28
  29. 29. Xiaomi and Samsung together make up nearly half of all new phones sold through May 2014. Source: Kantar Worldpanel -July 2014 30% 13% 16% 17% 20% 5% XIAOMI BUYERS PREVIOUS PHONES OWNED YTD 2014 First Time Smartphone Buyer Repeat Buyer of Xiaomi Switch from Samsung Switch from Nokia Switch from Domestic Brands (Huawaei, Lenovo, OPPO, ZTE, Coolpad) iPhone Xiaomi rakes in a significant number of first- time smartphone buyers. 23% 21% 16% 10% 6% 6% 3% 2% 1% 11% 0% 5% 10% 15% 20% 25% % OF SMARTPHONES SOLD YTD 2014 % of Smartphones Sold SMARTPHONE MANUFACTURERS Other 29
  30. 30. SMARTPHONE OS Source: Baidu –Q2 2014 Report 13% 79% 3% 5% 2014 Q2 SMARTPHONE SALES iPhone Android Windows Others Android continues to dominate new phone sales, with Apple and Windows phones trailing. 30
  31. 31. HOUSEHOLD INCOME BY SMARTPHONE OPERATING SYSTEM MEDIAN HOUSEHOLD INCOME BY SMARTPHONE OPERATING SYSTEM 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 Android iOS Windows Phone Other OS 7,508 RMB 14,217 RMB 7,229 RMB 6580 RMB Source: CMMS Summer 2014 iPhone users have significantly higher income than other phone users. 31
  32. 32. DIGITAL USAGE BY OS 2.5 3.1 2.3 1.3 0.8 1.0 0.7 0.3 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 Android iOS Windows Phone Other OS Mobile Internet Internet Source: CMMS Summer 2014 iOS users spend 20% more time on mobile and 25% more time on other digital channels. SMARTPHONE USERS TIME SPENT ON DIGITAL MEDIA 32
  33. 33. ADVERTISING FORMATS ON MOBILE 46% 26% 20% 8% MOBILE ADS ON TABLET 2013 Video Ads Banner/display Ads Interactive Ads Text Link Ads Source: eMarketer2014 48% 39% 7% 6% MOBILE ADS 2013 Search Banner/display Ads Video Ads Other Mobile advertising, while dominated by banner and search overall, skews heavily to video ads, especially on tablets. 33
  34. 34. FORMATS & CASES
  35. 35. MOBILE ADS FORMAT VIDEO ADS IMPACT DISPLAY PLACEMENT/ IMPLANTATION REGULAR DISPLAY INTERACTIVE DISPLAY CONTENT COOPERATION 35
  36. 36. TWO WAYS OF BUYING ADS IN MOBILE AD NETWORKS HERO APP COOPERATION 36
  37. 37. MOBILE BANNERS TARGET PHONE COMPETITORS LG G2 mobile banner ad campaign deftly pokes fun at the competitor phones on which they appear, using device recognition. “Tired of charging your HTC One?” “Hard to read this on your iPhone?” “Waiting for your Galaxy to catch up?” The banners gained a click rate up to 830% higher than average. After only five days, the banners had been picked up by 7,130 blogs, tech forums and newspapers worldwide, earning an estimated 184 million impressions from earned PR value alone. 37
  38. 38. VIEWPOINT ON MOBILE Mobile advertising should be at least 10% of a brand’s digital presence. Display ad network and video sites are now wide reaching enough to effectively complement awareness driven campaigns. 1. Of all targeting options, iOS device targeting remains one of the safest way to focus on higher spending consumers; at the same time, don’t forget to include more expensive devices from Android platforms. 2. Tablet advertising is reaching maturity, especially for higher tier cities and proves valuable for premium brands. Beware however of current inflation rates, that value is being priced by video sites and costs per reach are highest of all. 3. Beware of focusing only on WeChat. Advertising options are still limited and WoM can be harder to generate than on traditional Weibo platforms, especially if you don’t provide a WeChat tailored experience. 4. 38
  39. 39. TV & OTV
  40. 40. TV & OTV COVERAGE Source: CMMS, IMMS Summer 2014 48% watch OTV 95% watch TV 37% 39% 41% 40% 37% 35% 32% 63% 61% 59% 60% 63% 65% 68% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Total Age 15-19 Age 20-24 Age 25-29 Age 30-34 Age 35-39 Age 40+ SHARE OF TIME SPENT ACROSS OTV AND TV FOR OTV VIEWERS OTV Percentage TV Percentage On average, TV makes up two-thirds of video viewing time. 43% watch both 5% watch OTV only Of the total population: 52% watch TV only 44
  41. 41. Impression per episode('000) TV* OTV 我是歌手第二季 I’m a Singer 31,837 44,623 最强大脑 The Brain 12,245 41,333 笑傲江湖 Laughing 4,898 31,747 花儿与少年 DivasHit the Road 13,470 31,355 PROGRAM IMPRESSIONS PER SEASON (‘000) TV* Online Video HIT SHOWS ON OTV Especially for some hit shows, the OTV audience easily rivals or surpasses that of TV. Source: TV from CSM national rating & TV population, OTV from top 11 sites 1STAIR RATING 1STWEEK VIEWS 41
  42. 42. FIGHT FOR COPYRIGHT The fight goes beyond video sites, as TV stations feel the pressure to likewise make some significant rights acquisitions. … HNTV: exclusive broadcasting right for own site imgo.tv CCTV: exclusive broadcasting right for own site CNTV 46
  43. 43. 2014OTV EXCLUSIVE COPYRIGHT FOR ENTERTAINMENT PROGRAMS China’s Got Talent 5th season 中国达人秀第五季 The Voice of China 3rd season 中国好声音第三季 I’m the Singer 3rdSeason 我是歌手第三季 Happy Camp 快乐大本营 Day Dayup 天天向上 Your Face Sounds Familiar 百变大咖秀 Where are we going, Dad? 2ndseason 爸爸去哪儿第二季 Kangxi 康熙来了 You Are The One 非诚勿扰 43
  44. 44. DEVICES FOR VIDEO LETV C1S LETV SUPER TV x60 PPTV AND SUNING IQIYI AND SKYWORTH MEDIA PC LAPTOP PHONE TVBOX SMARTTV YOUKU √ √ √ √ - TUDOU √ √ √ - - IQIYI √ √ √ √ √ PPS √ √ √ - - PPTV √ √ √ √ - SOHU VIDEO √ √ √ √ - TENCENT VIDEO √ √ √ - - LETV √ √ √ √ √ FUSHION √ √ √ - - XUNLEI √ √ √ √ - BAOFENG √ √ √ - - At the same time, video players are all building their multi-screen strategy with devices expanding to TV. IQIYI AND TCL 48
  45. 45. TV
  46. 46. MONITORED TV ADVERTISING Media: TV, exclude all no-cost items & Hong Kong TV Media, (Total monitoring Ad Investment include new added media, while growthrate exclude new added media) Source: CTR AdEx Power 2013-2014 RMB: Million TOTAL MONITORED TV AD INVESTMENT (JAN –JUN.2014): RMB 466,142 MILLION 1.1% 9.1% 8.7% 5.4% 8.0% 12.6% 12.9% 1.3% -1.3% 0.5% 2.9% 5.6% -1.3% -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 0 20,000 40,000 60,000 80,000 100,000 120,000 Jun. 2013 Jul Aug Sep Oct Nov Dec Jan. 2014 Feb Mar Apr May Jun Ad Investment YOY Growth June YTD 2014 1.7% YOY Growth H2 2013 9.5% YOY Growth TV growth slowed down to just 1.7%, compared to the highs of the second half of 2013. 46
  47. 47. PRIME TIME TV AD INVESTMENT RMB: Million Media: TV, exclude all no-cost items & Hong Kong TV Media, (Total monitoring Ad Investment include new added media, while growthrate exclude new added media) Source: CTR AdEx Power 2013-2014 TOTAL MONITORED TV IN PRIME TIME (17:00-24:00) AD INVESTMENT (JAN -JUN.2014): RMB 302,301 MILLION 12.5% 6.3% 9.5% 4.0% 5.7% 10.6% 10.1% 2.6% -0.1% 2.7% 4.8% 5.7% 0.5% -2% 0% 2% 4% 6% 8% 10% 12% 14% 0 10,000 20,000 30,000 40,000 50,000 60,000 Jun. 2013 Jul Aug Sep Oct Nov Dec Jan. 2014 Feb Mar Apr May Jun Ad Investment YOY Growth Prime time ad investment was similar, at 2.7% YOY for the first half of this year. June YTD 2014 1.7% YOY Growth H2 2013 7.7% YOY Growth 47
  48. 48. TV AD INVESTMENT BY CATEGORY Media: TV, exclude all no-cost items & Hong Kong TV Media, (Total monitoring Ad Investment include new added media, while growthrate exclude new added media) Source: CTR AdEx Power 2013-2014 RMB: Million TV MONITORED AD INVESTMENT BY SECTORS (JUN.2014) 4.5% -19.3% 22.0% 67.3% 8.6% -7.1% -18.7% 0.2% 26.1% -27.6% 58.9% 3.1% 22.5% -54.2% -6.2% -69.1% -35.0% -13.7% -44.6% -10.1% -79.8% -100% -80% -60% -40% -20% 0% 20% 40% 60% 80% 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 Ad Investment YOY Growth Some key categories pushed strongly on TV advertising, particularly pharmaceuticals and household at over 50% growth. 48
  49. 49. SPENDING SHARE FOR CCTV/SATELLITE/LTV 21% 18% 21% 25% 35% 36% 54% 47% 43% 0% 20% 40% 60% 80% 100% Y 2012 Y 2013 2014 YTD CCTV Satellite TV Local TV Source: VivakiExchange SHARE OF SPEND ACROSS TV PLATFORMS *CCTV’s exclusive broadcast rights of the 2014 World Cup were a key reason behind the 3% share of spend increase on CCTV this year. +3%* +1% -4% The spending share of Local TV continues to drop as pressure mounts primarily from Satellite TV. 49
  50. 50. China Blue Zhejiang PSTV 2013:387 mil RMB 2014:497 mil RMB JinyingDrama Hunan PSTV 2013:239 mil RMB 2014:523 mil RMB I’m a Singer Hunan PSTV 2014:636 mil RMB Happy Camp Hunan PSTV 2014:286 mil RMB Day DayUp Hunan PSTV 2014:35 mil RMB Dad, where are we going Hunan PSTV 2014:1,005 mil RMB Chinese Idol Dragon PSTV 2014:235 mil RMB Voice of China Zhejiang PSTV 2013:1,040 mil RMB 2014:1,273 mil RMB BIDDING WARS ON PSTV Note:Y2013<Happy Camp>+<Day DayUP>239 mil RMB PSTV vie for top media properties by ramping up bidding in 2014. 50
  51. 51. THE LARGEST SPONSORSHIPS FROM HUNAN & ZHEJIANG SATELLITE TV SPONSORSHIP: YILI310 MILLION SPONSORSHIP: LIBY 230 MILLION SPONSORSHIP: JDB250 MILLION Source: Publicly Available Bidding Result 51
  52. 52. BIG SHOWS IN Q4 Channel: Dragon Satellite TV On air time: Saturday 2100, Nov.1, 2014 Program type: Outdoor Reality Show Channel: Zhejiang Satellite TV On air time: Friday 2100, Oct.10, 2014 Program type: Reality Show Channel: Jiangsu Satellite TV On air time: Friday 2100, Sep, 2014 Program type: Star Reality Show 52
  53. 53. SARFT REGULATION Drama Limitations On Satellite Channels in 2015: Channel •Drama cannot be on more than two satellite channels during prime time Drama series •The same drama on must not exceed 2 episodes in the prime time slot on each specific satellite channel OUR VIEWPOINT 1.Expect increase in cost of drama 2.The gap between each satellite channel’s coverage will widen 3.Video websites will benefit the most from the policy, though themselves also subject to ongoing updates to regulations 53
  54. 54. SARFT REGULATION Online TV BOX •Installing unaudited online TV boxes is forbidden in Shanghai & Zhejiang. Wasu, BesTV •Required to rectify their content –cannot continue using other video providers’ content such as Youku or IQIYI OUR VIEW 1.Online TV box can continue to supply the content from Wasu/BesTV, but not from other unaudited content. 2.Wasu/BesTVare required rectify their current offering, which will reduce their content significantly. 3.iQiyi/LeTV/PPTV continue to operate their boxes products in cooperation with their licensed partners. 4.Potential effect on those boxes that own no copyright content of their own, such as Millet box. Tightening policy for video via TV boxes since late June 2014 54
  55. 55. OTV
  56. 56. 438*MILLION USERS 69% REACH AMONG ALL NETIZENS 9 DAYS PER MONTH 48 MINUTES PER USAGE DAY PC MOBILE 56% REACH AMONG ALL NETIZENS 11DAYS PER MONTH 48 MINUTES PER USAGE DAY Source: Reach from CNNIC, days and time spent from iUserTracker& mUserTrackerJun 2014; Total user number only includes PC ONLINE VIDEO OVERVIEW 56
  57. 57. MEDIA SHARE OF TIME SPENT ON PC AND MOBILE 32% 5% 20% 16% 8% 7% 5% 5% 2% 15% 9% 13% 4% 12% 11% 10% 10% 4% 3% 10% IQIYI PPS YOUKU TUDOU PPTV LETV SOHU TENCENT VIDEO CNTV FUSHION Others TIME SPENT BY MEDIA Media evenly take share of consumers’ time on PC while top players are more dominant on mobile, especially for the two merged groups. PC MOBILE -4% +4% +5% -7% +7% -7% -3% +3% -3% 4% Source: iUserTracker& mUserTrackerJun 2013-2014 61
  58. 58. Drama •Japanese TV Series •Korean TV series Variety •Kangxi Talk Show (康熙来了) Sport •USOpenTennisChampionships Self-produced Program EXCLUSIVE SHOWS IN IQIYI IQIYI Exclusive shows 58
  59. 59. Source: Claimed Publisher Data VIDEO VIEWS BY DEVICE Mobile and Pad viewers make up as much as 55% of online video views depending on the platform. 65% 53% 59% 57% 45% 60% 65% 70% 90% 76% 28% 34% 35% 33% 35% 25% 27% 30% 10% 24% 7% 13% 6% 10% 20% 15% 8% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Youku&Tudou Sohu Video iQiyi PPS PPTV LeTV Tencent Baofeng Xunlei Fengxing VIDEO VIEW % BY DEVICE PC PHONE PAD 59
  60. 60. ONLINE VIDEO ADVERTISING REVENUE Source: iResearch –2014 China Mobile Video Report Mobile video advertising revenue takes up an increasing share of all video advertising, up from just 5% in 2013 to 19% in 2014. 0.19 0.48 2.51 5.32 9.06 13 6.4 9.1 11.0 12.7 13.9 15.2 2.9% 5.0% 18.6% 29.5% 39.5% 46.1% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 0 5 10 15 20 25 30 2012 2013 2014e 2015e 2016e 2017e ADVERTISING REVENUE FOR ONLINE VIDEO (MOBILE AND PC) 2012-2017 Mobile Video Advertising Revenue (Billion RMB) Non-Mobile Advertising Revenue Share of Online Advertising Revenue 60
  61. 61. The Rise Of An Online Video Influencer Meet Queenie, a self -taught creator whose first video was launched in October 2013. After reaching over one million views in January 2014, Queenie was approached by Tudou to launch a fresh show. From that time to present, a total of 39 videos have been created, with the new concept hitting a record 8 million views for the month of August. Brands such as Green Tree Hotels and Huawei have partnered with and been directly featured in the show. RISE OF VLOGGERS 232 536 624 1,104 553 457 689 751 1,217 4,698 8,337 - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Monthly Views ('000s) * 8M+ views per month (Aug 2014 est.) contributed by Source: TMG Originals and Thoughtful Media Group 61
  62. 62. POPULAR UGC CONTENT Wu Fei’sfairy trip 100 thousand black humor Self written song “I’m legend” 1 mil views 227 mil views on Youku 6.65 mil views Humor Music Innovation 十万个冷笑话 62
  63. 63. SARFT REGULATION:OTV In its latest rulings on video websites, SARFT has made it clear that overseas television programs will be restricted in both content and number. On Sept 5 SARFT announced that overseas movies and TV series that don't obtain a public screening and distribution license cannot be streamed on video websites. Such sites are required to register details of their ongoing programs before March 31 2015; starting on April 1 all unregistered shows should be removed. The policy came after a series of progressive restriction policies regarding Internet-based programs. OTV, formerly relatively free from the limitations of content on TV, has been under pressure to fall in line with regulation. In March, the administration required that online content be examined by at least three government trained specialists. Programs should be removed immediately if they include inappropriate content, such as promoting superstition or glamorizing violence, sex or gambling. In late April, it required four popular American TV series, including The Good Wife and The Big Bang Theory, be removed from video websites without giving specific reasons. 63
  64. 64. FORMATS & CASES
  65. 65. NEWPAID ADVERTISING OPPORTUNITIES ON OTV Youku, Tudou and Sohuprovide mid-roll on PC iQiYioffers up to 5 spots, 75 seconds pre-roll LeTVseeks advertising potential on its branded TV sets with start picture ads 65
  66. 66. THE ROLE OF VIDEO & INVESTMENT AWARENESS FORMAT: PRE-ROLL, DISPLAY & SPECIAL KPI: TA REACH (%), COST PER TA REACH AWARENESS FORMAT:SPONSORSED PROGRAMS/PAGE KPI: COST PER THOUSAND IMPRESSION, TA REACH(%) PRE-ROLL SPONSORSHIP DISPLAY SOMETIMES SPONSORSHIP MAY BE COUNTED AS DISPLAY 66
  67. 67. 请填写以下信息获取赠品机会 姓名 邮箱 手机号码 OTHER FORMAT SUGGESTION BRANDED CONTENT INTERACTIVE PRE-ROLL & DISPLAY HEALTH TEST CLICK TO BUY EXERCISE SOCIAL TOPICS (Nutrilite) (Durex) 67
  68. 68. VIEWPOINT ON VIDEO & OTV Sponsorship of hot shows, while wide reaching, is an increasingly expensive battlefield. And as TV stations try to reclaim ownership of online views, negotiations will likely be more centralized, increasing the chance of bidding wars for key shows. 1. New regulations will likely drive up the cost of drama on TV and international content on OTV, possibly creating new dynamics for cross TV advertising. 2. The continuous increase of slot duration in OTV –now planned to expand to 90 seconds break –could impact ad effectiveness and needs to be closely monitored. 3. UGC content begins to catch up with Western trends, and will grow as video sites implement revenue share policies for content creators. This can provide reach and authenticity to marketing efforts that want to become part of consumers’ conversations. 4. 68
  69. 69. SOCIAL
  70. 70. SOCIAL PLATFORMS ACROSS DEVICES 39.5% 16% 11% 5% 5% 3% 2% 1% 1% 16% Sina Weibo Baidu Tieba Qzone Qiushi Baike Momo Renren Tecent Weibo Douban Group Weishi Others -3.5% +8.6% +2% -1.2% Desktop/Laptop Mobile/Pad 1,424,677,000hours 69% on Social (non IM) 653,593,638 hours 31% on Social (non IM) 91%reach 51% reach +11% YTD +68% YTD -11% YTD -8% YTD While the vast majority of netizens still access social platforms via desktop and laptop, they have significantly shifted their use onto mobile devices. SNS, WEIBO, OTHERS 33.8% 15.3% 7.6% 3.1% 1.3% 1.0% 37.8% Qzone Sina Weibo Baidu Tieba Sina Blog Tecent Weibo Douban Others +1.3% -7.1% +5.1% +0.6% Source: iUsertracker, mUsertracker–Jun 2014 -3.1% -5.7% +1.2% 70
  71. 71. SOCIAL PLATFORMS ON PC Source: iUsertracker, mUsertracker–Jun 2014 DESKTOP/LAPTOP –SOCIAL WEBSITE REACH (%) Sina Weibo is the only platform on desktop to maintain coverage. 0 10 20 30 40 50 60 70 80 90 100 Qzone Renren Sina Weibo Tencent Weibo On Mobile, Weibo and traditional SNS continue losing monthly users. WEIBO AND SNS –SOCIAL APP REACH (%) 0% 10% 20% 30% 40% 50% 60% 70% 80% Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 QZONE Sina Weibo Baidu Tieba Sinal Blog Tencent Weibo Douban Tianya Renren -5% 0% -5% -7% -13% -2% -1% -7% CHANGE IN REACH 71
  72. 72. NICHE SOCIAL APPS Source: mUsertracker–June 2014 0 1 2 3 4 5 6 7 8 9 10 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Baidu Tieba Momo Qiushi Baike WeiShi Dianshi Chengjin Baihe Hunlian Instagram Zhihu Outside the top four apps, the next most popular social apps individually have a limited following, with none reaching over 9% of mobile netizens. SOCIAL COMMUNITIES MONTHLY REACH (%) 76
  73. 73. 30% 40% 50% 60% 70% 80% 90% REACH OF WECHAT AND SINA WEIBO, SINA WEIBO APP Sina Weibo (site) Sina Weibo (app) WeChat The decline of Sina Weibo on app can be directly tied to user’s migration to WeChat, where checking “Moments” has replaced Weibo feed on mobile. Source: iUsertracker, mUsertracker–Jun 2014; CNNIC –Jun 2014 USERS SHIFTING SOCIAL PREFERENCES 77 77% OF WECHAT USERS ARE ACTIVE ON MOMENTS
  74. 74. TOP INSTANT MESSAGING PLATFORMS 0 10 20 30 40 50 60 70 80 90 100 IM App Monthly Reach (%) WeChat QQ Wangxin Yixin Laiwang QQ Light Line IM ON DESKTOP IM ON MOBILE 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% IM Software Monthly Reach (%) QQ Ali Wang Wang 阿里旺 Fetion 飞信 QT 语音 YY 语音 Sina Weibo 微博 RTXC 腾讯通 Skype Outside the top 3 chat apps, other apps have less than 5% reach, QQ dominant. On Mobile WeChat eclipses QQ. Source: iUsertracker, mUsertracker–Jun 2014 74
  75. 75. WECHAT BREAKING RECORDS 5.8 million WeChat public accounts 15,000new public accounts every day 67,000 apps connected to WeChat 400 apps connect on average daily basis Shopping Flight Check-In Movie Tickets XiamiMusic Youku Sina Weibo One-Click Login Video Content Youku Meipai 75
  76. 76. EVOLUTION OF QR CODES
  77. 77. QR CODE INNOVATION …even video …to animated gifs + = QR Codes have evolved… …from pictures 77
  78. 78. Visual QR codes can be unique to each channel used by brands, thus giving channel-specific metrics on engagement for each campaign. Offline Magazines, Packages, Stickers Digital TV, Out-Of-Home Online Website to Mobile, Online Video CHANNEL SPECIFIC QR CODES 78
  79. 79. FORMATS & CASES
  80. 80. DISPLAY ADVERTISING ADVERTISING FORMATS OPENING PAGE AD UMS: Target IDs – Fans & Competitive Fans 3rdPost in feed FANS HEADLINES: Target Fans 1stPost in feed for 24 hrs BRAND EXPRESS: Target based on demographics 3rdPost in feed. Shared to user fanbase DISPLAY ON MOBILE & PC IN-FEED ADVERTISING ON MOBILE & PC 80
  81. 81. NEW FORMATS & OPPORTUNITIES HOT TOPICS mobile & pc LOCATION BASED ADVERTISING TO PUSH OFFLINE EVENTS mobile only E-COM VIA ALIPAY mobile & pc SUGGESTED SEARCH (NOT BRAND) mobile & pc 81
  82. 82. ADVERTISING FORMATS TEXT & TAB ADVERTISING IN MESSAGES FROM PUBLIC ACCOUNTS WECHAT DAILY NEWS DISPLAY 82
  83. 83. WECHAT ADDS CLICKABLE BANNER ADS WeChat Ad Formats Text Link vs. Banner Image Tencent’s WeChat launched its advertising platform in late June 2014 and started with text link ads, connecting WeChat Public Accounts with advertisers. This update allows advertisers to use image banners of fixed width 582px and height of 166px, no bigger than 50K. Four image formats are supported including bmp, png, jpeg, jpg and gif. In addition, the update of WeChat Ad Platform in August now allows advertisers to drive WeChat traffic to an external site. To become a WeChat publisher sharing ad revenue with Public Accounts, the minimum required number of following users is 100,000. 83
  84. 84. BURBERRY PARTNERSHIP WITH TENCENT & WECHAT “London in Shanghai” campaign launched on WeChat to win a ticket to the offline SH Grand Opening. Online -WeChat Interaction Offline -SH flagship store opening Online –Experience the Event 360 event scenes, including interactive hotspots to discover extra content. PRE LAUNCH POST Burberry has established a special partnership with Tencent at the highest levels of management which has yielded first-to-market experiences on WeChat. 84
  85. 85. INTEGRATING WECHAT INTO OFFLINE EXPERIENCES Scan QR code at the entry Receive Gamification Follow the Guide Receive present when finishing the tour TAG drives consumer engagement at La Maison Exhibition through WeChat functionality. 85
  86. 86. ESTEE LAUDER’S CRM APPROACH TO WECHAT 1. Skin test 2. Customize beauty plan 3. Collect personal sample set offline Estee Lauder has a membership section in their WeChat Service account which provides users with latest skin care tips, personalized beauty plans, sampling etc. 86
  87. 87. MOMO ADVERTISING Popular location-based dating app Momo lets users see nearby strangers filtered by distance –a mechanism that’s easily translatable to helping retail business attract traffic to their stores. This is particularly true for the post-90s generation with whom the app is more popular. Purchasing a placement can even be completed without a computer, as ad buying is in fact fully executable via smartphone. The cost to reach each user starts at RMB 10 cents. Momo will estimate the total number of reached users and charge accordingly after retailers specify the geographic range and time period for the ad placement. As of June 2014,Momo’s total number of registered users reached 148 million; with 52.43 million monthly active users. Dating APP Momo leverages its location based competency to help drive traffic to retail stores. 87
  88. 88. VIEWPOINT ON SOCIAL Whether planning your campaign on Wechat or Weibo, it has become the norm to think of social as a mobile channel. Any content that is not tailored for mobile has much less chance to spread through social media. 1. Don’t just think platforms, also think content creators. Working with talents who make the most of emerging social platforms is a powerful way to stay current without having to make heavy investments in your own social pages. 3. Advanced WeChat brand tie-ins using interactivity and O2O –for example, in-store redemption of QR coupons – is becoming the standard 4. Value for the consumers is still mostly driven by lucky draws, competitions and special offers, making it even more important to tie your e-commerce activities with social media gratification. 5. 88 Recognize that different platforms are optimized for different user behaviors. For instance Weibo is shifting more toward users looking for information, and thus can serve as a broadcast platform to increase visibility. On the other hand WeChat is more about one-on-one interaction and rewarding the customer relationship. 2.
  89. 89. MAGAZINE AND NEWSPAPER
  90. 90. PRINT MEDIA OVERVIEW 34% 75% 61% 21% 19% 95% 31% 68% 63% 31% 16% 95% 30% 64% 67% 46% 16% 96% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Magazine Reach NewspaperReach Internet Reach Mobile InternetReach Radio Reach TV Reach 2012-2014 Reach of Print Media Series1 Series2 Series3 Source: CMMS Summer 2012-2014 Print media has a steadily declining readership. 14.4 minutes on magazine 37.2 minutes on newspaper However among the remaining readers, the average daily time spent has been stable. 90
  91. 91. NEWSPAPER AD INVESTMENT Media: Newspaper, exclude all no-cost items & Hong Kong TV Media, (Total monitoring Ad Investment include new added media, whilegrowth rate exclude new added media) Source: CTR AdExPower 2013-2014 -15.4% -11.1% -11.0% -10.8% -3.1% -5.2% -4.8% -13.7% 7.6% -14.2% -7.3% -6.0% -7.5% -20% -15% -10% -5% 0% 5% 10% 0 2,000 4,000 6,000 8,000 10,000 12,000 Jun. 2013 Jul Aug Sep Oct Nov Dec Jan. 2014 Feb Mar Apr May Jun Ad Investment YOY Growth Total Monitored NP Ad Investment (Jan -Jun.2014): RMB 38,246 Million RMB: Million Spending on newspaper continues to be the biggest loser among traditional media to digital, though it still has a seasonal role to play during Chinese New Year. 91
  92. 92. NEWSPAPER AD INVESTMENT BY INDUSTRY Media: Newspaper, exclude all no-cost items & Hong Kong TV Media, (Total monitoring Ad Investment include new added media, whilegrowth rate exclude new added media) Source: CTR AdExPower 2013-2014 NP Monitored Ad Investment By Sectors (Jun.2014) -19.0% -9.8% -2.0% 22.5% -40.6% -1.3% 244.8% 163.1% 7.4% 10.4% -8.5% -1.1% -21.1% -21.9% -44.9% 43.9% -3.9% -31.5% 20.4% 38.3% 37.5% -100% -50% 0% 50% 100% 150% 200% 250% 300% 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Ad Investment YOY Growth Real Estate & Construction and Business & Services dominate newspaper ad investment; Pharmaceuticals and Foodstuffs see a bit of a resurgence. 92
  93. 93. MAGAZINE AD INVESTMENT Total Monitored MG Ad Investment (Jan -Jun. 2014): RMB 8,831 Million -9.3% -0.9% -2.2% -5.8% -5.6% -4.6% -4.8% 12.0% -1.1% -1.9% -5.1% -7.6% -6.2% -15% -10% -5% 0% 5% 10% 15% 0 500 1,000 1,500 2,000 2,500 Jun. 2013 Jul Aug Sep Oct Nov Dec Jan. 2014 Feb Mar Apr May May Ad Investment YOY Growth RMB: Million Media: Magazine, exclude all no-cost items & Hong Kong TV Media, (Total monitoring Ad Investment include new added media, while growth rate exclude new added media) Source: CTR AdExPower 2013-2014 Magazine investment has steadily declined for nearly every month in the past year; Chinese New Year again is a key exception where spend on print persists. 93
  94. 94. Toiletries maintain the lead on magazine investment. Media: Magazine, exclude all no-cost items & Hong Kong TV Media, (Total monitoring Ad Investment include new added media, while growth rate exclude new added media) Source: CTR AdExPower 2013-2014 MG Monitored Ad Investment By Sectors (Jun.2014) -6.9% -6.2% -10.4% -0.9% 16.7% -8.1% 20.0% 2.0% -27.1% 35.1% 9.0% -17.5% -16.4% -36.0% -41.8% -5.7% 65.9% -20.6% -35.1% -76.6% -100% -80% -60% -40% -20% 0% 20% 40% 60% 80% 0 50 100 150 200 250 300 350 400 Ad Investment YOY Growth RMB: Million MAGAZINE AD INVESTMENT BY INDUSTRY 94
  95. 95. REALITY OF DECLINING PRINT MEDIA People's reading habits are steadily changing, and era of traditional print titles is in the past. Publishers are faced with plummeting subscribers, falling advertising investment. Young people especially have migrated towards new digital media to access information; print readership is facing a huge loss. Faced with the challenges of new technology and new media, many brands are implementing cross-media strategy and hastening the implementation of digital channels. Official websites that provides free online reading electronic newspapers, mobile phone value-added services are among the many avenues that are being pursued The shift away from print toward digital media is inevitable, publishers must embrace multiple media channels and services to stay relevant in the market. iPhone & Android iPad TotalDownloads:7,395,310 DailyUniqueVisitors:258,835 TotalDownloads:3,089,835 DailyUniqueVisitors:163,143 + Paper (11 Titles in Total) Digital (9 Apps in Total) CROSS-MEDIA EXAMPLE WITH MODERN MEDIA Example: Modern Weekly Total Circulation: 930,000 Example:iWeekly TotalDownloads:22million 95
  96. 96. Many fashion titles have issued tablet platforms in recent years, many of which feature exclusive digital content on top of select print content. DIGITAL MAGAZINE ADS WILL BECOME A NEW GROWTH POINT Advertisers are generally more willing to pay the higher cost for Tablet than networks, due to the quality of the audience as well as high-end device interface. Media IOS/Andriod Launch date Average monthly download Total Download Content Difference Compare To Traditional Cosmopolitan IOS 2011-07-21 1,227,384 30,836,450 60% selected from print Bazaar Men IOS/Andriod 2014-06-01 800,000 / 60% selected from print Esquire IOS/Andriod 2011-05-01 520,000 20,535,457 30% selected from print Bazaar IOS 2011-07-28 495,642 23,375,456 Competely different content with print, weekly updated Caijing IOS/Andriod 2011-08-01 300,000 1,606,819 No big difference with print SELF IOS 2013-07-25 200,000 / No big difference with print Elle China IOS/Andriod 2013-03-08 150,000 450,000 10% selected from print Marie Claire IOS 2011-02-15 120,000 900,000 No big difference with print GQ IOS 2012-12-15 110,000 510,000 No big difference with print Elle Men IOS/Andriod 2011-03-01 82,800 467,000 60% selected from print Rayli EF IOS 2011-09-01 50,000 1,350,000 No big difference with print Men's Uno IOS 2013-01-01 20,000 240,000 60% selected from print Grazia IOS 2013-02-06 9,900 72,000 No big difference with print 96
  97. 97. FORMATS & CASES
  98. 98. CROSS-MEDIA USING PRINT Extending traditional print media exposure to digital GQ The Beijing News Advertorial Integration of newspaper ads and advertorial with radio 98
  99. 99. VIEWPOINT ON PRINT For most industries print media’s relevance continues to decline; key exceptions for fashion and luxury brands for which magazine continues to be respected and influential. 1. Magazine investment has become more focused; focusing on fewer, higher quality titles to optimize advertiser’s spend on print. 2. Cross-media titles, often offering custom digital-only content on mobile and tablet, are a viable medium as they span across digital and traditional channels. 3. Building strategic partnerships in print can help straddle the balance between global and localized content for luxury brands, building and maintaining brand equity while optimizing content for local nuances. 4. 99
  100. 100. RADIO
  101. 101. RADIO OVERVIEW Source: CMMS Summer 2012-2014 Despite the supposed decline of radio, it is actually growing listenership among car owners. 1 hour 5 minutes on radio Daily listening among car owners is also steady compared to the total population. -3.5% YOY Car Owners Non Car-Owners 19% 47% 16% 16% 48% 13% 16% 49% 10% 0% 10% 20% 30% 40% 50% 60% Total Population Car Owners Car Non-Owners REACH OF RADIO 2012-2014 BY CAR OWNERSHIP 2012 2013 2014 1 hour 4 minutes on radio 1 hour 7 minutes on radio Total Population unchanged YOY -3.5% YOY 101
  102. 102. RADIO AD INVESTMENT Media: Radio, exclude all no-cost items & Hong Kong TV Media, (Total monitoring Ad Investment include new added media, while growth rate exclude new added media) Source: CTR AdExPower 2013-2014 TOTAL MONITORED RD AD INVESTMENT (JAN -JUN.2014): RMB 15,986 MILLION 11.5% 18.6% 20.6% 22.2% 26.8% 29.3% 28.5% 25.9% 20.5% 25.8% 28.1% 30.6% 29.9% 0% 5% 10% 15% 20% 25% 30% 35% 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Jun. 2013 Jul Aug Sep Oct Nov Dec Jan. 2014 Feb Feb Apr May June Ad Investment YOY Growth RMB: Million In June, radio advertising grew by 29.9% YOY. 102
  103. 103. Media: Radio, exclude all no-cost items & Hong Kong TV Media, (Total monitoring Ad Investment include new added media, while growth rate exclude new added media) Source: CTR AdExPower 2013-2014 RD MONITORED AD INVESTMENT BY SECTORS (JUN.2014) 29.9% 29.3% 38.9% 45.6% -4.8% 28.3% 109.6% 61.7% -6.0% 4.5% 79.3% 67.4% 59.2% -9.6% 22.6% 90.5% -31.7% -27.0% 1.9% 2.6% -26.3% -60% -40% -20% 0% 20% 40% 60% 80% 100% 120% 0 50 100 150 200 250 300 350 400 450 500 Ad Investment YOY Growth RMB: Million Business & Services lead radio advertising, while Alcohol more than doubles. RADIO AD INVESTMENT BY CATEGORY 103
  104. 104. FORMATS & CASES
  105. 105. RADIO INNOVATIONS CASE: SH Oriental Broadcasting Center Optimizing programming FM101 targeting people aged at 15-35, whose commuting time are 7:30-9:30 16:30-19:30 FM103 targeting people aged at 35-45, whose commuting time are 9:00-11:00 20:00-22:00 Targeting Elite(25-44) To better cater to elite’s lifestyle and taste, the station cut a third of medicine-related ads which were seen as an irritating addition to the radio program by listeners. Integrate Online & Offline resources Case: Bright Dairy Spring Outing Execution: Produced different ads version respond to different TA and broadcast them in daily prime time intensively to boost the concept of health. Audience can win a outing ticket by interacting with the Radio program or scanning the QR code. 105
  106. 106. BUDWEISER HIT FM CASE STUDY Broadcast road show features Top DJs from all over the world such as Armin ban Buuren, Tiesto, Nicky Romero and Paul Oakenfold. Hit FM Dance on Saturday is a special episode called ”Hit FM Dance Countdown” which features a selection of the best Electronic Dance Music that week. CASE: Customized Programs for Budweiser—Hit FM Dance (Starting May 24 2014 Mon.-Sat. 10pm-12pm) Budweiser Integration into the program Announcement of program holders Announced as in hourly news report Discussion about party topics and brand to encourage interaction with audience Broadcasting promotion clips New Program Hit FM LIVE broadcasts live Budweiser’s live concertor events. 106
  107. 107. VIEWPOINT ON RADIO Radio’s decline is misleading in the context of strong listenership among car owners, and therefore a worthwhile channel to reach China’s middle and upper classes. 1. Integration with live is a natural connection between new technology and radio audiences, and including radio in your brand activations can be a powerful way to boost awareness of your events. 3. 107
  108. 108. OOH
  109. 109. OOH AD INVESTMENT Media: Outdoor, exclude all no-cost items & Hong Kong TV Media, (Total monitoring Ad Investment include new added media, while growth rate exclude new added media) Source: CTR AdExPower 2013-2014 TOTAL MONITORED OOH AD INVESTMENT (JAN -JUN.2014): RMB 21,210 MILLION 7.4% -9.4% -3.2% -4.1% 2.9% 8.9% 7.5% 54.6% 3.0% 8.3% 10.5% 17.0% 11.4% -20% -10% 0% 10% 20% 30% 40% 50% 60% 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Jun. 2013 Jul Aug Sep Oct Nov Dec Jan. 2014 Feb Mar Apr May Jun Ad Investment YOY Growth RMB: Million In June, OOH advertising increased by 11.4% YOY, again with a strong peak over the holiday season. 109
  110. 110. OOH AD INVESTMENT BY INDUSTRY Media: Outdoor, exclude all no-cost items & Hong Kong TV Media, (Total monitoring Ad Investment include new added media, while growth rate exclude new added media) Source: CTR AdExPower 2013-2014 OOH Monitored Ad Investment By Sectors (Jun.2014) 37.4% 5.4% 35.2% 19.1% 6.5% -4.9% 6.5% -1.9% -18.0% 12.2% 18.7% -0.7% -6.9% -21.4% 1.3% 17.9% -11.2% -13.8% 7.9% -49.6% -27.9% -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 0 100 200 300 400 500 600 Ad Investment YOY Growth RMB: Million Real Estate & Construction was the leader in OOH advertising, growing by 37.4% YOY. 110
  111. 111. OOH SPENDING Except for conventional billboard and some low-end network media, most of OOH spending shows growth, especially from airport and metro. Source:CODC 2004.01.01~2013.12.31 29,678 11,219 9,765 5,669 5,335 4,041 1,447 579 1,080 31,640 15,451 9,258 7,029 5,685 4,293 1,388 630 3,025 Screen OOH Metros Unipole Airport Bus Body Bus Shelter Netwrok Media Railway Metros Screen 2012 2013 180% Description: Growth rate calculation is not include Metros Electronic Screen. 13,700 16,440 20,550 26,715 34,730 39,939 49,924 59,909 67,733 68,634 0 10000 20000 30000 40000 50000 60000 70000 80000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 OOH SPEND (MILLION RMB) 7% 38% -5% 24% 7% 6% -4% 9% 3% 3% -6% 10% -5% -1% -4% 0% Growth% Net Growth% OOH SPEND BY TYPE (MILLION RMB) 111
  112. 112. OOH FORMATS %SHARE Metros20% Unipole12% Airport9% Bus Body7% Bus Shelter5% Network2% Railway1% Building LCD20% LED12% Metros Screen4% Metros TV4% Bus LCD4% Video LCD 43% Screen OOH takes up almost half of total OOH spending, followed by standard Metro OOH. Sources:CODC 2004.01.01~2013.12.31 OOH SPEND BY TYPE (MILLION RMB) 112
  113. 113. VIDO LCD OOH OOHType 2012 2013 Growth% Net Growth% Building LCDs 12,641 16,140 28% 19% LEDs 7,349 9,674 32% -3% MetrosTVs 5,943 2,926 -51% -7% Bus LCDs 3,745 2,900 -23% -10% Metros LCDs 1,080 3,025 180% - Total 30,758 34,665 13% 3% Unit:RMB Million Source:CODC 2004.01.01~2013.12.31 Amongst Screen OOH Media, only Building LCDs show big increases while others are in decline. 113
  114. 114. Measurement of OOH in China has faced the barrier of industry fragmentation and lack of measurement. 114 Vendors cannot invest in good data Vendors use own data or use no data Skeptical customers Price pressure, slow growth OOH industry is (still) fragmented, many small vendors OOH CHALLENGES
  115. 115. NEW TOOLS FOR OOH EVALUATION Map API Billboard GPS Travel Paths Transport choices Daily OOH contact data Start point End point Big data analysis can tap sample audience’s travel records via GPS opportunities to optimize OOH spots. Start point End point 115
  116. 116. APPLBOXTM MAP Cross referencing travel routes against OOH spot locationsprovides tangible measurement of reach and frequency. Sources: All Media Count and Ipsos, 2014 116
  117. 117. FORMATS & CASES
  118. 118. METRO OOH EXPANDS More Metro OOH is directly tied to more cities with new metros and continued expansion of existing lines in major cities. MayKunming Line 1, 2 (Shenzhen Press Group) Aug Harbin Line 1 (Local Metros Co.) DecZhengzhou Line 1 (Asiaray) Dec Guangzhou Line 6 (Fundamental Media) NEW LINES IN 2013: May Changsha Line 2 (Hunan Press Group) Jun Ningbo Line 2 (Asiaray) NEW LINES IN 2014: 118
  119. 119. INNOVATIVE OOH FORMATS Cadillac used an innovative OOH display for its CTS “ 凌波微步” campaign,giving the illusion of floating above water in Shanghai’s Xintiandi Buzz on Sina Weibo >60,000 Shares >4,000 Comments 119
  120. 120. VIEWPOINT ON OOH OOH innovations gives added possibilities to reach the commuting audience. 1. Analytics combining user locations and OOH give actionable insights via big data, providing advertisers new sets of KPIs to evaluate the performance of their OOH campaign. 2. OOH still has the ability to generate organic buzz if executed well, while new technologies offer chances to directly tie OOH formats with direct conversions to a store or online visit. 3. Interactivity in OOH –such as peel-off coupons, magnets, iBeacons, and souvenirs which can be redeemed for prizes or discounts –is a rising trend and effective in high-traffic areas. 4. 120
  121. 121. E-COMMERCE
  122. 122. 331*MILLION USERS 53% REACH AMONG ALL NETIZENS 7 DAYS PER MONTH 15 MINUTES PER USAGE DAY PC MOBILE 39% REACH AMONG ALL NETIZENS 13DAYS PER MONTH 7 MINUTES PER USAGE DAY Source: Reach from CNNIC, days and time spent from iUserTracker& mUserTrackerJun 2014; *Total user number only includes PC E-COMMERCE OVERVIEW 122
  123. 123. ONLINE SHOPPING OVERVIEW 216.55 260.42 287.45 422.37 363.71 427.41 461.67 639.71 525.09 628.76 -40.0% -20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 0 100 200 300 400 500 600 700 Q12012 Q22012 Q32012 Q42012 Q12013 Q22013 Q32013 Q42013 Q12014 Q22014e CHINA ONLINE SHOPPING MARKET Q1 2012 -Q2 2014 Total Transactions (Billion RMB) QoQ Growth Rate YoY Growth Rate 461 785 1187 1892 2760 3780 4772 5634 0.0% 20.0% 40.0% 60.0% 80.0% 0 1000 2000 3000 4000 5000 6000 2010 2011 2012 2013 2014e 2015e 2016e 2017e CHINA ONLINE SHOPPING MARKET 2010- 2017E Total Online Shopping Transactions (Billion RMB) Growth Rate % of Total Retail Transactions Source: iResearch July 2014 YOY growth holds steady above 40%, as online shopping reaches over 10% of total retail transactions by year’s end. 123
  124. 124. MEDIA SHARE OF TIME SPENT ON PC AND MOBILE 52% 22% 4% 8% 10% TAOBAO TMALL JUHUASUAN (GB) JD.COM VIP.COM YIXUN MEITUAN (GB) WOWO (GB) Others 56% 7% 3% 9% 5% 2% 2% 16% E-COMMERCE PLATFORMS SHARE Alibaba dominates EC market on group level, although competitors such as Jingdong see increases in share. Source: iUserTracker& mUserTrackerJun 2013-2014 +4% -4% PC MOBILE +2% -9% +8% *TMALL products can also be purchased through TAOBAO APP. 124
  125. 125. PRODUCT CATEGORY ONLINE SHOPPERS VIA MOBILE DEVICES AND SOCIAL MEDIA Source: CNNIC Online Shopping Report Online shopping has grown for most categories in the last year, notably even among virtual goods. 18% 22% 23% 26% 31% 33% 35% 43% 45% 76% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Cultural & Sports Facilities Food & Health Products Household Appliances Books & DVDs Cosmetics Bags & Suitcases Virtual Products Electronic Products Groceries Apparel & Accessories +8% +14% +14% +18% +20% +15% 125
  126. 126. B2C VS. C2C 13.7% 25.3% 34.6% 40.4% 48.0% 54.1% 58.1% 60.5% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 100.00% 2010 2011 2012 2013 2014e 2015e 2016e 2017e ONLINE SHOPPING MARKET B2C VS. C2C BY TOTAL TRANSACTIONS B2C C2C Source: iResearch July 2014 B2C continues to rise as consumers see at is more reliable source for significant purchases, making up almost half of all transactions. 57.4% 21.2% 3.5% 2.8% 1.9% 1.5% 1.5% 1.4% 1.4% 7.4% CHINA TOP B2C WEBSITES MARKET SHARE BY TOTAL TRANSACTIONS Q2 2014 TMALL JD.com Suning.com VIP.com Gome.com.cn Amazon Dangdang Yixun.com yhd.com 126
  127. 127. BRANDS EMBRACE B2C More and more big brands cross all categories opened their official stores in B2C market in past year. 127
  128. 128. MOBILE E-COMMERCE SURGES 5.0% 5.9% 7.4% 10.5% 11.9% 14.3% 18.7% 25.7% 26.8% 95.0% 94.1% 92.6% 89.5% 88.1% 85.7% 81.3% 74.3% 73.2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 SHOPPING TRANSACTIONS -MOBILE VS. PC Mobile PC Source: iResearch July 2014 One out of four transactions now take place over mobile phones. 13.1 18.1 31.2 38.1 50.7 65.8 119.4 135.1 168.4 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2e 2014 CHINA MOBILE SHOPPING MARKET Total Transactions (Billion RMB) QoQ Growth Rate 128
  129. 129. JD AND TENCENT PARTNERSHIP Jingdong and Tencent reach a strategic e-commerce alliance. As of March 2014, Jindongacquired 100% of Tencent’s e-commerce operations. This includes Tencent’s B2C platform QQ WangGou, as well as its PaiPaiC2C platforms. JD also acquired a partial stake in Yixun, coupled with the option for a complete buyout at a later date. In return Tencent acquires a 15% stake in JD, with the option for an additional 5% when Jingdong files for its IPO. 129
  130. 130. E-COMMERCE ON CHAT PLATFORMS WECHAT QQ Jingdong announced they will give away RMB1 billion Hong Baomoney to users on mobile QQ.. JD brings e-commerce to Tencent’s WeChat and mobile QQ, with a strong emphasis on limited time offers and group deals. JD is currently deploying its WeChat shop among select users in Beijing in Shanghai with WeChat version 5.3 130
  131. 131. FORMATS & CASES
  132. 132. FORMAT & SUGGESTIONS SEARCH RTB DISPLAY ADVERTORIAL REGULAR DISPLAY 132
  133. 133. THE ROLE OF E-COMMERCE AWARENESS EVALUATION PURCHASE FORMAT: DISPLAY ADS KPI: TA REACH (%), COST PER TA REACH FORMAT: ADVERTORIAL KPI: COST PER VISIT, TIME SPENT(IF IT’S TRACKABLE) FORMAT: SEARCH, RTB DISPLAY BANNERS KPI: SALES REVENUE, ROI 133
  134. 134. VIEWPOINT ON E-COMMERCE Expect further consolidation and partnerships to bring opportunities for e-commerce. 1. Official brand stores will continue to gain momentum as more brands sign on to B2C, following the likes of Estee Lauder and Burberry. 2. E-commerce dedicated search is becoming an important battlefield, with relatively new players like mobile-focused sm.cn, as well as in house search engines (e.g. on JD.com) breaking new ground. 3. Mobile e-commerce is rising fast and definitely warrants planning for a mobile experience of your owned e-commerce channels. 4. 134
  135. 135. SEARCH
  136. 136. 507MILLION USERS 80% REACH AMONG ALL NETIZENS 12 DAYS PER MONTH 9 MINUTES PER USAGE DAY PC MOBILE 77% REACH AMONG ALL NETIZENS 11DAYS PER MONTH 11 MINUTES PER USAGE DAY Source: Reach from CNNIC, days and time spent from iUserTracker& mUserTrackerJun 2014; Total user number only includes PC, mobile data refer to site SEARCH OVERVIEW 136
  137. 137. Though people mostly search on PC, mobile is catching up -though mostly quicker searches compared to PC. On mobile, search via browser dominates vs. APPs Source: iUserTracker& mUserTrackerJun 2013-2014 SEARCH ACROSS DEVICES 92% 76% 6% 15% 2% 9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Jan-13 Jan-14 SHARE OF TIME SPENT ON SEARCH PC Site Mobile Site Mobile App 137
  138. 138. SEARCH –SHARE OF QUERIES ON PC AND MOBILE Search remains dominated by Baidu, but it’s losing share to different players across PC and mobile devices. 360 search continues to rise and on mobile SM.cn makes a move. Source: CNZZ, China Mobile –August 2014 SHARE OF SEARCH 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 2013Jan 2013Feb 2013Mar 2013Apr 2013May 2013Jun 2013Jul 2013Aug 2013Sept 2013Oct 2013Nov 2013Dec 2014Jan 2014Feb 2014Mar 2014Apr 2014May 2014Jun 2014Jul 2014Aug Baidu Qihoo 360 Sogou Google Soso Bing Youdao Other New Sogou PC SEARCH MARKET SHARE (% QUERIES) MOBILE SEARCH MARKET SHARE (% QUERIES) 79.7% 9.7% 7.4% 1.7% 0.9% 0.8% Baidu SM.cn Sogou Google Easou Other 138
  139. 139. A NEW MOBILE SEARCH ENGINE Mobile-friendly e-commerce search engine sm.cn rockets to second place. 139
  140. 140. SOGOU AND WECHAT SEARCH WeChat public accounts are now searchable via Sogou as of June 2014; recall that Tencent had acquired a 36.5% stake in Sogou in late 2013. 140
  141. 141. ALIBABA SEARCH TECHNOLOGY OpenSearch is based on Alibaba’s self developed large- scale distributed search engine platform, which powers major digital e-commerce properties including such as Taobao and Tmall. With OpenSearch, developers can implement on-site search functionality for their websites and even build a professional search engine. Aliyun currently released OpenSearch to its users for free during public testing phase via its cloud computing platform. Aliyun,Alibaba Group’s cloud computing services company, announced it is opening up search to public developers via OpenSearch. 141
  142. 142. FORMATS & CASES
  143. 143. THE ROLE OF SEARCH & INVESTMENT & FORMAT EVALUATION FORMAT: KEYWORDS SEARCH, BRAND ZONE KPI: CPV, TIME SPENT AWARENESS FORMAT: SPECIAL SEARCH FORMAT (NOT COMMON) KPI: IMPRESSION, REACH BRANDZONE PAID SEARCH MINI ZONE MOBILE ZONE 143
  144. 144. PROGRAMATIC BUYING
  145. 145. VOLUME OF PROGRAMMTIC BUYING Programmatic buying from DSP is projected to double by year’s end 2014, hitting an estimated 3.3 billion RMB. 550 1,530 3,300 6,370 11,230 17,220 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 2012 2013 2014e 2015e 2016e 2017e MARKET SCALE OF DSP DISPLAY AD IN CHINA 2012-2017 (MILLION RMB) Source: iResearch China DSP Market Trends Report +115% YOY 145
  146. 146. GLOBAL GIANTS COMMIT TO PROGRAMMATIC BUYING It’s a bold move given that P&G ranks as the world’s biggest media spender, committing roughly $235 million to online display last year. Until now it has been speculated that P&G’s use of programmatic buying has been mainly limited to relatively small tests. The move has significant implications from brand advertisers, given an industry where until now more direct-response focused advertisers like AMEX have been more eager to embrace programmatic buys. AMEX, the U.S. based financial services company, in fact recently stated an intention to go 100% programmatic. Consumer goods giant P&G announces plans to buy 70% to 75% of its U.S. digital media programmatically by the end of this year. Source: WARC June 2014 146
  147. 147. ACCESS TO 12 BILLION IMPRESSIONS PER DAY 80% COVERAGE OF CHINA’S TOTAL RTB INVENTORY Audience On Demand (AOD), Vivaki’s trading desk for programmatic buying, allows tremendous access to scale via search keyword cookies. SEARCH KEYWORDS ON BAIDU AOD TARGETING USING SEARCH KEYWORD COOKIES 147
  148. 148. DISPLAY ADS AOD AUDIENCE TARGETING WITH OTV AND DISPLAY exclusive to ZenithOptimedia OTV ADS AOD is able to reach a hyper-relevant audience on both OTV and display, coupled with frequency capping for even greater efficiency. 148
  149. 149. EXTENDING OUR PROGRAMMATIC FOOTPRINT Remarketing Look-Alike Targeting A B C Extended Key Words EXTENDED KEYWORDS RETARGETING LOOK-ALIKE TARGETING Optimization of programmatic via keyword extension, retargeting, and look-alike targeting further maximize relevance and effective reach. 149
  150. 150. VIEWPOINT ON SEARCH & PROGRAMMATIC BUYING Take advantage of powerful targeting abilities of programmatic buying via search cookies, through platforms like Vivaki’s Audience on Demand. 1. Use search and programmatic buying as a key source of insights and campaign optimization: test creative materials in real time and identify key consumer groups. 2. Start integrating your databases (site, e-commerce, advertising cookies) to reach optimal retargeting and look-alike targeting campaigns. 3. Don’t just look at the last click conversion! Invest in attribution modelling solutions to better understand the business drivers in your campaign 4. 150
  151. 151. QUESTIONS: DAVID.CHU@ZENITHOPTIMEDIA.COM.CN

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