China's 3G Revolution

Tech specialist Larry Rinaldi

By Published on .

BEIJING--China’s video revolution is not broadband, but 3G.

The enormous capacity and broadband capabilities of 3G, short for third-generation technology, provide the ability to transfer simultaneously both voice data (a regular telephone call) and non-voice data, such as downloading information, exchanging e-mail, and instant messaging. In marketing 3G services, video telephony has often been used as the killer application for 3G.

Just like in the rest of the world, there is constant talk in China about how YouTube, Yoqoo (the leading online video sharing and distribution platform in China) and the 120 other facsimiles of YouTube in China are devastating traditional media companies, business models and advertising practices. This country is subject to the same hype and conjecture that exist in Hollywood, Silicon Valley and Madison Avenue, but the real paradigm shift will happen very soon.

China Network Information Center, the official statistics provider of the internet, recently stated that China has roughly 140 million internet users and will be the largest internet market in the world by around 2008. But a hailstorm of media ventures and IPOs alongside the galloping growth of what is now the 4th largest-media market in the world is fueling a quiet, no-less-dynamic revolution, 3G telephony.

Although much-delayed, there are rumors going around Beijing that the government will finally start issuing 3G licenses soon, by midsummer at the latest. It’s probably true too; as old-China-hands know, rumors are the most reliable sources of information in China.

While the size of China’s internet market is certainly noteworthy, for marketers, the issuance of 3G licenses is far more important and could bring about a revolution, especially in China. It offers targeted reach, engagement, participation and activation, an all-in-one advertising solution in a video medium in an enormous market where people crave the latest and greatest when it comes to technology, especially mobile phones.

By most accounts, between 500 and 600 million Chinese will have mobile phones by 2010, far more than the number of Chinese who will own a PC or even have access to one on a regular basis. At least 10% or 15% of those--and I think the figure will be far more--will insist on owning the best video-enabled, addressable 3G phones, creating an audience of 50 to 75 million “early and rabid” adopters of mobile video.

As a longtime marketer in China, I’ve been guilty myself of aggressively seeking the “silver bullet,” the one piece of creative or media buy/celebrity/event that could solve multifaceted, complex marketing problems.

Frankly, millions of dollars later, the results were nearly always disappointing. A strategy that worked in Beijing didn’t work in Shanghai or “small” cities like Harbin, with a mere five million metropolitan residents, much less the 500 cities with populations closer to one million.

Rare success stories also didn’t last very long, because China’s complex, convoluted media environment was (and still is) systemically inefficient. Sadly, the most consistently successful and widely accepted tactic for most marketers, including myself, have been mundane “lucky draw” contests.

Usually, the best option was reaching an acceptable average--hardly what marketing is about. The vastness and diversity of China always won though. Like in poker, outside marketers are playing against the house and eventually, the house always wins.

With the degree of media fragmentation out there, rare successes usually are fleeting, so speaking honestly, I’d rather not try. But the times could be changing with the arrival of 3G. Available to so many Chinese, 3G can be used anytime, anywhere with anything, meaning you don’t have to, and with perfect accountablity.

The value of a customer database squares as the cost of distributing a message drops and the targetablity increases. "Cost per message" will decline and the "quality" will increase. Suddenly, a vast slice of Chinese consumers become a ripe marketing data-base for marketers--so all of you that did not build a workable customer database over the years, take heart.

The flexiblity of 3G--and the richness of video--suddenly make database style marketing a real "silver bullet." Now, that’s revolutionary.

Larry Rinaldi is chief operating officer of JoyMedia Group, an independent media company based in Beijing.
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