Cashing in on China's hand-held revolution

The mainland's one billion-plus mobile phone users will propel the nation to the top of the world's digital advertising ranks in a decade

PUBLISHED : Saturday, 09 February, 2013, 12:00am
UPDATED : Saturday, 09 February, 2013, 4:51am


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The widespread use of mobile devices in China will enable it to overtake the United States as the world's biggest spender in digital marketing in seven to 10 years, according to Laura Desmond, chief executive of Starcom MediaVest Group, the world's biggest media buyer and planner.

Digital marketing covers promotions through electronic devices like mobile phones, tablets, laptop computers, and digital billboards, as well as through the internet and microblogs.

"It's inevitable that China will overtake the United States in digital marketing, probably in seven to 10 years. China has more mobile and internet users than any other country," Desmond said.

At current rates of growth, China will leapfrog Britain and Japan next year to become the world's second-biggest spender on digital advertising, with total spending of US$11.78 billion, according to New York research firm eMarketer.

This year, the US will spend the most on digital advertising, outlaying US$46.5 billion, according to eMarketer. Behind it will be Japan on US$10.46 billion; Britain on US$9.51 billion; and China on US$9.43 billion.

"What you see in the US, Britain and France is highly developed digital markets, where the first screen is still the TV at home. What you see in China is the first screen is the mobile phone. Chinese consumers are more willing to spend time with their mobile devices than other markets," Desmond said.

By the first quarter of last year, China had one billion mobile phone users, Shanghai Daily reported. And by the middle of last year, the country had 538 million internet users, according to IDG News Service.

A survey by Starcom, a subsidiary of French advertising and public relations giant Publicis Groupe, found digital marketing ranked a close third behind outdoor advertising and television in reaching Chinese consumers. Starcom's study found Chinese consumers spent on average 1.76 hours per day watching video clips on computers.

"What we are witnessing is the biggest digital evolution on earth taking place in China. There is a growing population of 'netizens' who do not even have a TV and instead are choosing to watch most of their TV content online," said Jeffrey Tan, national research and insights director at Starcom China.

Desmond said that as the world's biggest market for mobile devices, China was going to teach the rest of the globe how to integrate different media marketing channels.

For example, Starcom client Coca-Cola used the Beijing Olympics in 2008 to market itself across multiple channels, including stadium displays and recycling programmes.

"What Coca-Cola did for China set the stage for what they did in the London Olympics last year," Desmond said.

Starcom has 15.8 per cent of China's media market, according to a company spokesman. The firm planned to buy US$32 billion of media space for clients like Procter & Gamble globally this year, Desmond said.

"We doubled our staff in China in the last five years. We'll continue to see that kind of staff growth," she said. Starcom has 700 staff in China.