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Looking at China by the numbers, mobile marketing should be a thriving business. The country has more mobile-phone users than any other country -- over one billion this year, according to government statistics -- and Chinese are avid users of their devices. Beyond voice communication, phones are constantly used for social networking, shopping, product research and more.
China has 356 million mobile internet users, according to the China Internet Network Information Center (CNNIC), and 69% of total internet users use their mobile devices to access the internet. The country will have up to 250 million 3G subscribers by the end of this year, up from 127.5 million at the end of 2011.
Geography is another indicator. Two neighbors, Japan and South Korea, are among the world's most advanced internet and mobile markets in the world, and Chinese digital, pop culture and entertainment trends often originate in those markets.
Yet marketers barely consider mobile media as a way to build brands in China. The medium's share of total ad spend in China is about 1.5%, according to eMarketer.
"When you look at the amount of time that consumers spend on their mobile devices globally, and you look at the way that marketers are allocating budgets, there's a significant gap between the amount of money being spent against the mobile channel and other channels in the marketing mix," Patrick Moorhead, VP of mobile sales at Catalina Marketing, said on "Thoughtful China," an online marketing-affairs talk show produced in Shanghai.
"A very big disconnect" exists between advertisers and the mobile industry, said Dan Wong, chief operating officer at Madhouse, a leading Chinese mobile ad network. "Almost all the metrics you look at, [such as] user numbers, traffic, cost ROIs, it would seem to you that most advertisers would use a lot more mobile as a marketing channel."
Mr. Wong, a senior executive at Nokia China before he joined Madhouse in May 2010, believes mobile's share of ad spend in China is "less than one percent."
"The future of marketing is integrating multiple media together, particularly using mobile as the core piece that ties it all together, because it's the only device that is always with you 24/7 and ... can get your attention at any time and you respond to it," said Alvin Wang Graylin, CEO and founder of mlnfo Information Technology, a leading provider of mobile search service in Shanghai. Mr. Graylin will be a speaker at Ad Age 's China conference on Building Brands Beyond Tier One http://events.adage.com/china/index.php?page=home on the digital panel, along with Dorcas Lau, Unilever's VP, digital marketing and e-commerce for North Asia, and other digital experts.
Why are advertisers holding back on mobile? Advertisers have some valid reasons: Download speeds in China can be slow and third-party data tracking and analysis services don't exist.
Also, Chinese own about 300 million smartphones, but fewer than 100 million have access to 3G subscription packages. Downloading big mobile apps, videos and other rich content through WiFi is slow and tedious, and lacks the sense of spontaneity that makes using phones fun.
"The problem is that we haven't cracked the real efficiency [of mobile], because we are focusing on the old model ... I think the opportunity here is directly jump in a paid/owned/earned model," said Mykim Chikli, ZenithOptimedia's chief operating officer, China. "The marketing director is dead and long live the content director."
The ad industry in China also lacks experience about how to use phones effectively and maintain the infrastructure needed for mobile-based marketing programs. Mobile experts say agencies and advertisers are ill-equipped to pull various technology and branding platforms together. Smart advertisers should learn to create a super cocktail of location-based services, shopper marketing and mobile advertising.
ABOUT THE AUTHOR
Normandy Madden is senior VP-content development, Asia/Pacific at Thoughtful China, and Ad Age 's former Asia Editor. See earlier episodes of Thoughtful China at www.thoughtfulchina.com.