Invite colleagues
The year is racing away and it is hard to imagine we are almost at the end of the second calendar quarter. So with a week or so to go, I am reflecting on the past 3 months working within the Chinese digital marketing sector and looking forward to the next quarter.
SinoTech Group is in a very unique position in China as we work with almost every major 4A Agency and on a daily basis I am personally speaking with 1-2 agency’s about what they are seeing and what support from SinoTech Group they require going forward. This not only gives me visibility on what is happening in their client base but also allows me to spot early digital marketing trends and build a ‘what’s hot and what’s not” list for this market.
From my perspective, this past quarter (April-June) has been much more positive in terms of Brand activity than what we saw in Q4, 08′ and Q1 this year. To be frank the revenues will lag for most 4A’s as the activity at this stage has been mostly in the form of client pitches and campaign planning. That said, Q3 looks to me as one where I can see actual advertising revenues coming back into digital and seeing some spend. Many commentators have already said that the budgets have not dropped but have simply be held and this echos what I see… the budgets have been opened again in mid/late Q2 with most actual campaigns due to start in Q3.
Verticals
The sectors that I am most excited about are: FMCG, Travel/hospitality and Fashion/luxury
These are not sectors on the surface seem obvious in a economic downturn but this is where SinoTech Group is doing proposals with the large Agencies, so for us these are the verticals seeing most growth.
Digital Media Services
Most briefs continue to be fairly similar to digital marketing plans of earlier in the year.
Media Buying- Portals/T1 verticals with <5% going into ad networks.
Search Marketing is going to feature more in Q3. Clients are making this almost a default option in most briefs- interestingly SEO getting more attention. (I would suggest that SEM is 65% and SEO 35% as a generalization for Search Marketing spend in Q3)
Social Media Marketing is definitely in the ” hot list” … Almost every agency is getting questions from their clients on this.. but given the lack of understanding and clear evaluation/execution of SMM campaign, I see the interest in Q3 but the revenue being later in the year as Agencies adopt methodologies to sell more integrated plans. There are some well known brands ‘putting toes in the social marketing water’ but we have yet to see significant spend here. Although I believe that this will change.
Creative- Not something we see much difference in. Clients continue to push for ‘free’ creatives with their media buying … ends up being discounted to the Agency who in turn roll this up into their service fees.
Technology
Gaining interest for Q3- definitely Online Media Monitoring and Web Analytics. I think that China has just woken up to the fact we need measurements and metrics for our Brands. This not only marks a new trend but a new period in Chinese digital marketing.
Pricing
Media buying is holding steady, still predominately cost per day (CPD) buys. Some CPM but limited mostly to T2 sites. Baidu keyword buying is slightly more expensive.
Anyway, this is just what SinoTech Group is seeing in the Chinese market. Would be great to hear what you are seeing and let me know if this is radically different from your perspectives. Also if you are not in China, how does this compare to your market?
Written on Wednesday, 02 September 2009 15:19 by Matt McDougall
