A Worldwide Look at the State of Digital Marketing

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NEW YORK (AdAge.com) -- Executives at ICOM, a global network of independent ad agencies, were surveyed by Ad Age about the top digital trends and issues facing their markets in 2010. Among the findings: Facebook and Twitter rule the world (except in China and Spain), but digital budgets are still small and, in some countries, mostly reserved for the bravest of marketers. Oh, and don't insult the monarch in Malaysia.


Mike Lau

Account director, Rayken Brand Communications/ICOM, Guangzhou

"The prospect of Google leaving China because of censorship requirements is the most important news in China this year. As one of the biggest search engines in China, Google has many users in bigger cities, most with a higher education. We expect that Baidu, the No. 1 local search engine, would be happy to see Google go. Baidu has been accused of basing rankings on how much money it is paid, and netizens in China are not happy about Google leaving.

"Google's departure is still pending as discussions with the government continue. In January, Google updated its logo with a traditional Chinese window paper cutout design to celebrate the Chinese New Year. According to the instant-messaging site Tencent's web survey, as of Feb. 11, some 9,457 users think Google knows Chinese users better than Baidu, while 9,426 think Baidu does better. The online voting is still going on.

"In China, Facebook, Twitter and YouTube are blocked. Tudou and Ku6 [video-sharing websites], Tencent [instant messaging] and Kaixin [social networking] are doing well. Many marketers are making use of these digital tools. One thing these successful sites have in common is that they are all 'Chinese' versions."


Ariyanto Zainal

President-creative director, MACS909/ICOM, Jakarta

"Internet infrastructure development has been very aggressive, especially in rural areas; the cost of subscriptions is becoming cheaper; high-speed access is gaining greater penetration.

"Even if the users have other accounts at local sites, they still use Facebook as their anchor. The internet has already reached over 25 million users. If we add cellphone internet access, the user population is up to 140 million. ...This is in part because of cheap handsets with Facebook and Messenger access. There is not a great deal of confidence that the internet will help build a sustainable business yet. ...On the other hand, this creates an opportunity for the more innovative marketers. There is not much SEO and SEM understanding to justify internet marketing efforts, and management is not yet willing to devote much of the budget to this medium. However, there are some efforts just starting."


Johanez Tunku

Account service, Krakatua/ICOM, Kuala Lumpur

"Digital media is more frequently included in our communications plans, especially when we target the younger consumer. But it currently stands at only 0.5%-1% of total advertising spending.

"There are only a few websites popular among advertisers, mainly Facebook [used primarily for its viral properties] and Star Online [news]. A number of websites have been blocked by the Malaysian Communication and Multimedia Commission, a regulatory body, because of political sensitivities, and bloggers can be prosecuted [the latest being an incident in which a blogger wrote derogatory remarks against one of our monarchs]."


Delia S. Saguil

VP-media, Adformatix/ MPG/ICOM, Manila

"We forecast inroads of digital books and e-zines as local print publishers adopt the concept and use new business models to survive the downward trend of print.

"Close to 80% of 13-to-29-year-olds are active internet users. In the Philippines, 60.5% of internet users upload videos to a video-sharing website, 90.3% read blogs, 65.8% start their own blog, 45.2% subscribe to an RSS feed and 61.8% download podcasts.

"Amid this landscape, advertisers are waiting for monitoring of internet ads, [but] research companies are waiting for net advertising to hit critical mass."


Annika Avikson

Partner, AD Angels/ICOM, Tallinn

"Marketers see social media as the new magic tool, especially considering that we are still experiencing an economic recession and social media is basically free of charge. However, the majority of marketers seem to treat the internet as a traditional media channel rather than take advantage of its interactive capabilities. ... Orkut is the most popular social network in Estonia at the moment [26% of the population use it regularly]. Twitter is used by 6% and Facebook by 12%. Facebook is the fastest growing. In the spring of 2009, the number of Facebook users was only 40,000, and by the end of 2010, it is predicted that 300,000 or even 400,000 of Estonia's population of 1.3 million will be on Facebook. Most major brands have a Facebook page."


Klaus Kitzm�ller

Managing director, Move Communications/ICOM, Munich

"There was growth in digital advertising in Germany compared to big declines in offline media last year. One phenomenon is relatively slow growth of active participants in social online media compared to other countries in Europe. On the other hand, we see successful online platforms of quite a lot of print media brands and special interest in online formats. Mobile is currently a big topic, though, from our point of view, most advertisers are not really sure how to use it. There is a lot of trial and a lot of errors."


I�igo Muguiro

CEO, Veinte Segundos,/ICOM, Madrid

"In Spain, Tuenti, an invitation-only private social networking website, is very popular. With the under-17-year-olds, it is more popular than Facebook. Because of the invitation aspect, kids think that they cannot be left out. A public visitor counter works like a popularity thermometer, and teenagers change and improve their page to attract visits. In Spain, everybody who's anybody advertises in social networks, and 'community manager' is the most-sought job in the field. One site that is getting very popular is Spotify, a music-based site. Companies such as Coca-Cola and others are offering free subscriptions to the site to their clients."


Sergej Bucciolini

Brand consultant, account & project manager, m.a.d./ICOM, Basel

"For B-to-C companies, Facebook is definitely the leading site because of the various options for creating brand awareness and communication. For B-to-B companies, Xing, a Swiss business networking site, and LinkedIn are widely used."


Meltem G�rler

Co-president, Fikir Merkezi/ICOM, Istanbul

"The Turkish internet population has one of the highest levels of participation in social networking and video viewing. Facebook is the third most-visited website in Turkey after Google and Microsoft. Twitter has also seen very strong growth over the last couple of months and is quickly being adopted as a promotional vehicle by brands and celebrities.

"Middle and lower-middle-class housewives have started to use the internet more every day. The blogs and sites on home decor and with recipes are getting enormous hits daily, and the owners of blogs targeting those women are becoming new targets for many marketers as they become opinion leaders.

"There is much growth opportunity for e-commerce because only 7% of the online population is buying today.

"We are seeing strong growth in digital marketing from the fast-moving consumer goods sector in particular, experimenting with online marketing initiatives, lots of social media marketing and trial of online coupons."


Mauricio Noznica

Planning manager, and Eduardo Coelho, director-Cappuccino digital unit, Rino Com/ICOM, S�o Paulo

"Applications for social networks are getting a lot of attention in Brazil. Two popular ones are a game called 'Colheita Feliz' ['Happy Harvest'] and BuddyPoke, which encourages social interaction. The most-used social networking site in Brazil is Orkut, which is owned and operated by Google.

"Marketers are using digital more and more. For example, T.G.I. Friday's is trying to strengthen its brand in Brazil in a program partnering with Nestl�. To highlight its debut at social networking [using Orkut, Twitter, Facebook and YouTube] and to launch a new milkshake flavor -- chocolate with coconut -- T.G.I. Friday's offered free milkshakes for the first 1,000 people to sign up as its followers on Twitter. That happened within two hours and was considered a great success."


Socializing in the virtual garden

The divide between real and virtual worlds has become smaller for millions of Japanese flocking to social networks started by Gree, DeNA and Mixi. The sites started out like Facebook -- a way to let friends connect online -- but have morphed into social-gaming empires featuring pastimes such as digital gardening. Unsurprisingly, given the advanced nature of Japan's mobile-phone industry, the vast majority of users access the social-networking sites by phone rather than computers. More than 100 million of Japan's total 114 million mobile phone subscriptions are 3G, making it easy for developers to offer advanced apps.

Two of the hottest games for Japanese users involve digital gardening. Gree's Hakoniwa, which means miniature garden, and Mixi's Sunshine Bokujo, or "Sunshine Ranch," let players own and tend to a garden or farm. They can also sell the crops they grow to get new types of plants for their gardens, communicate with other mobile farmers, watch their gardens grow and take care of others' plants.

Social-networking sites "have moved to develop communal activities that replicate a growing trend in recent years for people to be more interested in gardening and farming, a sort of return to agriculture in a small way that is relaxing and practical," said Tokyo-based Dave McCaughan, senior VP-director of strategic planning, Asia/Pacific at McCann WorldGroup. The games are also profitable. Japan's top three social networks generate more than $1 billion in revenue annually, mostly through sales of virtual goods in mobile games.

Advertisers, too, are joining the games. Nissin, for instance, created an eco-campaign to market its instant noodles tied into Gree's Tsuri Star fishing game. Players fished cans from the river and ocean to win virtual prizes.

Digital gardening and fishing are just two of the quirky genres of games attracting millions of Japanese to social networks. Users can also excavate ancient artifacts, flirt with women at a hostess bar, control a cat that has superpowers, and throw chalk at sleepy students in a classroom.

-- Normandy Madden


Twitter is its own top trending topic

Despite lagging most countries in broadband penetration, Brazilians are among the world's most-avid internet users, and 79% of those users hang out on social networks, according to Aegis Group's AgenciaClick. They spend an average of 44 hours a month online.

Portuguese has become the second most-tweeted language on Twitter after English. This is the year marketers are taking social media, especially Twitter, seriously. Ad agencies are rushing to hire social-network experts, who are rapidly becoming celebrities. And companies use mass media to launch products with the goal of achieving trending-topic status on Twitter.

At Carnival, beer marketer Nova Schin launched a line extension to its Devassa brand called Devassa Bem Loura (Bem Loura is Portuguese for a very blonde girl). Nova Schin spread the word Bem Misteriosa on Twitter, along with a website and teaser TV spot. The website featured a keyhole that grew as people tweeted #bemmisteriosa, finally revealing Paris Hilton, a celebrity guest at Carnival.

-- Claudia Penteado


Big Tudou about online video growth

Television is still king in China's ad world, raking in the majority of China's $88 billion in ad expenditure, but even broadcasters are eyeing opportunities in online video.

China's booming online-video industry started with sites such as Youku.com and Tudou.com. Now portals and social-media sites have started their own video services to attract viewers and advertisers. Leading online search giant Baidu.com, for instance, has set up a division to provide ad-supported copyrighted video content including movies, TV series, sporting events and animation.

"As China's internet industry evolves, we have seen increasing demand for high-quality video content on our search platform," said Ren Xuyang, Baidu VP-marketing and business development.

China had 338 million internet users in June 2009 and 222 million online video viewers, according to the China Internet Network Information Center (CNNIC), making it the world's-largest internet market. Broadcasters such as China Central Television (CCTV) and Hunan TV recently set up online video sites in partnership with AdChina, which operates the largest online ad network in China. China's online advertising market size grew 21.2% in 2009 to $3.02 billion, according to iResearch. Multinational marketers such as Procter & Gamble Co., Nestle, Unilever, L'Or�al and PepsiCo love online-video sites because spots that run online are more likely to reach affluent, urban young adults, the target market for most western brands.

-- Normandy Madden


Flirting with giant mobile possibilities

Mobile marketing is likely to be the next digital discipline to break out in Argentina, where there are cellphones galore. In fact, penetration is 120%, according to telecom research company Telecompaper, with more than 40 million cellphones for Argentina's 37 million fast-talking inhabitants. And about 30% of those phones are smartphones, which allow more sophisticated use of mobile marketing.

Until now, privacy rules that don't let marketers send messages to subscribers without their permission, and service providers' own concerns about bombarding customers with ads, have limited mobile marketing mostly to basic text-messaging efforts.

But a few isolated examples have worked well. For instance, local band Babas�nicos launched its album "Mucho" through an agreement with cellphone service provider Personal Mobile and Motorola. Buyers of the Motorokr got to download the new album free on their phones for a month before its release.

-- Aixa Rocca and Valentina Vescovi


Devising new online media measurements

Online video is the hot topic for European marketers and agencies, and the search is on for a way to maximize its potential, both commercially and culturally. According to the Internet Advertising Bureau in the U.K., 95% of video viewed online is still short-form stuff.

Nielsen has teamed up with UKOM (U.K. Online Measurement Company) to create an industry-agreed audience measurement and planning system for online media, which means that advertisers can now use the same targeted reach and frequency measures as they do with TV. This will be the year that planning tools, improved measurement and more-advanced targeting options change the rules for online-video advertising.

Marketers need to extend their campaigns into online video to achieve genuine reach, or at least that's what media owners are hoping. In the U.K., Project Canvas, backed by the BBC; commercial channels ITV and Channel 4; and telecommunications group BT; among others, will launch a set-top box later this year that is connected to broadband, bringing IPTV to the living room. The system will let viewers access the participating broadcasters' video-on-demand offerings, as well as provide access to internet content on TV screens. Project Canvas has said it will spend almost $80 million on advertising and brand development in the first four years, as it fights to establish first-mover advantage.

Across mainland Europe, a group of French and German broadcasters called HbbTV (Hybrid Broadcast Broadband TV) is planning a similar, but pan-European, launch. The challenge for both HbbTV and Project Canvas is to keep down the cost of the boxes and to find a way around bandwidth bottlenecks -- and sell it to advertisers.

-- Emma Hall


Mobile could pick up broadband slack

As one of the few major markets where the newspaper business isn't shrinking, India's ad spending is dominated by TV and print advertising, with 45% and 42% of ad expenditure respectively; digital advertising captures a miniscule 2%, according to Pitch-Madison Ad Outlook.

Digital advertising is forecast to grow this year from just under $100 million to almost $150 million, much faster than the 13% overall increase in ad spending projected for all Indian media. But the lack of measurement tools for digital media holds advertisers back from investing a significant portion of their budgets. The internet is still usually accessed from computers rather than phones, although connections are slow and India has fewer than 8 million broadband subscribers for a population of over one billion. People tend to go online at work, and traffic drops sharply on weekends.

That offers a lot of potential growth for cellphones, owned by fewer than half of India's population.

-- Pradyuman Maheshwari

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