China is P&G learning lab

China's largest advertiser is expanding its online media presence to reach consumers where they live

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GUANGZHOU--Procter & Gamble Co. is China’s largest advertiser but hasn’t been a trailblazer in digital media. Just a sliver of the marketer's media investments have strayed beyond traditional media, namely television.

But that’s changing quickly. As P&G finetunes its use of marketing dollars from wide sweeps using national or provincial TV to narrower channels such as the internet and mobile phones, the result is a network of deals that connect P&G brands with stars like martial arts hero Jackie Chan.

“The battleground now is branded entertainment and media innovation,” said Alfonso de Dios, P&G’s Guangzhou-based associate director for media in Greater China. “Globally, we are focusing on digital marketing to build long term and meaningful consumer relationships. We’ve escalated the spending and the quality of what we do online.”

That means going beyond web pages to internet protocol TV, known as IPTV, as well as mobile phones, social networks, search marketing and other high-tech applications. China has become a “learning lab in an ecosystem of providers and platforms," he said. "We're following a directive set by [P&G's Global Marketing Officer] Jim Stengel, who wants the company to go beyond telling and selling, i.e. the 30" spot, and go towards building more meaningful consumer relationships."

The lab mindset in China extends to P&G's media partners, from local TV stations to media agencies like Publicis Groupe's Starcom MediaVest and MediaCom's ESP division. ESP is an an entertainment, sports, events and sponsorship shop within WPP Group’s GroupM.

"Fortunately, we're all starting from the same point here and they’re open-minded and want to learn in the process," said Mr. de Dios. He declined to specify how much of P&G's media budget he is moving from traditional ad buys into new media and branded content deals, but said there is "a noticeable shift in investment" this year.

Interactive campaigns are nothing new for hip advertisers like PepsiCo, Nike and Adidas. P&G was slower to go online in the mainland because consumers of detergents, diapers and cosmetics were not early adopters of the internet either, and the move wasn't ordered by the company's global headquarters in Cincinnati, Ohio.

That dynamic has changed. China had 210 million internet users at the end of 2007, barely surpassing the U.S. as the largest internet market in the world, according to Beijing-based research firm BDA. In the first quarter of 2008, China was home to 574 million cell phone users, about 44% of the population, according to the Ministry of Industry and Information.

Digital media is taking control of entertainment in the mainland as well. Chinese are the world's most avid mobile music listeners and China's online games market will exceed $3 billion in 2010. That means it’s not just teens and young office workers in China’s first-tier cities who are seeking news, information and entertainment online.

Expectant mothers in China, for example, are “very net-savvy,” said Mr. de Dios, so the internet is a breeding ground for campaigns promoting brands like Pampers and Olay.

The majority of P&G’s budget remains on TV, but even there strategy is being revamped, said Mr. De Dios. He has created several shows with some of the country’s largest and most innovative broadcasters, such as state-run giant China Central Television, or CCTV, and Hunan Satellite TV and Beijing TV.

To promote the Gillette Mach 3, for example, P&G’s is sponsoring “The Disciple,” a Chinese reality show to find the next martial arts star. Jackie Chan created and stars in the show, which is jointly produced by Beijing TV, JCE Entertainment, China Film Group and Emperor Entertainment Group.

"The Disciple" debuted on Beijing TV in April and will run through the fall. The winner will play the lead role in a film written by the martial arts superstar, and the finalists will become members of the Jackie Chan Stunt Team. More than 100,000 fans signed up to try out for the reality TV show.

P&G’s involvement began last month when the series narrowed to ten finalists. The show is tied into a Chinese video blog site,, co-branded with Gillette, where consumers can upload photos and videos that convey how they overcame a challenge. Mr. Chan picks a winner each week from the online submissions and shares his own championship moments. Given Mr. Chan’s widespread appeal, the series is likely to run in other markets around the world as well.

“A digital world has been built around the show. These things can take on a life of their own and create great ROI for P&G,” said Mr. de Dios. By catering to a male audience, the show is "a good equity fit for Gillette. The theme, overcoming challenges and becoming the best you can be, is similar to Gillette's commercial slogan in the West: 'The best a man can get'."

P&G localized its feminine hygiene brand Whisper with a six-month online blog program that launched last fall. It lets women create and post their own manifesto to celebrate their cycle. Nearly 100,000 women participated and read blogs posted by celebrities recruited by P&G about how they have an uplifting period.

In one of its most unusual moves in China, the company allied with Shanghai Media Group (SMG), China’s second largest broadcaster after CCTV, to sponsor about two dozen lifestyle and fashion IPTV channels in Shanghai, one of China's most sophisticated markets. Each channel is associated with a specific P&G brand, such as Olay, Whispers, Vidal Sassoon, Head and Shoulders, Pantene, Gillette, and Herbal Essences, and programmed accordingly with content that fits the target market.

The IPTV network, called i-channel, operates "in a very competitive market. Our Shanghai consumer is bombarded by a larger number of media ads than people in other parts of China. It’s like a pull because it’s a subscription model, not a push where the channels are free-to-air or through cable, which is really cheap in China," said Mr. de Dios. "The fact that they opt in means they have a higher level of interest in this media, so we leveraged that and customize the content and programming mix."

P&G doesn't get any of the subscription revenue, but does run advertising on each channel as part of the deal and has blocked other advertisers from appearing on P&G-themed channels, which account for about one-quarter of the total number of IPTV channels available to Shanghai viewers.

It's the first time a brand has had its own channel in China, with programs focused on P&G’s target market’s behavior and interests "in order to avoid too much commercialization in the channels,” said Shanghai-based Violet Wang, a spokeswoman for Click to See, a video advertising network in China that has partnered with SMG. “It's the new mass platform for the brand to make the communication more interactive with consumers.”

Nike and Coca-Cola have also used SMG's IPTV network on a smaller scale.

China is not P&G’s only digital marketing testing ground. The company is talking about dramatically shifting funds from traditional media to digital in other markets, starting with Canada.

Tim Penner, P&G's president in Canada, has vowed to boost online spending from 3% to as much as 20% of the media budget for the company's fiscal year starting July 1, 2008. His promise, first reported on the Canadian Marketing Blog, was confirmed last month by a P&G spokeswoman, who noted that the proportion would likely vary from brand to brand.

Contributing: Ad Age reporter Jack Neff
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