World's Largest Digital Market? Soon, It Could Be China

At AdAgeChina: Execs From Nokia, Others Say Interactive Spending in Country Set to Soar

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SHANGHAI ( -- With all the advantages of scale, China is on the verge of becoming the world's biggest digital market.
Victor Koo
Photo Credit: Kevin Lee

Youku CEO and keynote speaker Victor Koo.

More Photos from the AdAgeChina Digital Marketing Conference

China has 500 million mobile-phone subscribers and more than 122 broadband users, said speakers at the AdAgeChina Digital Marketing conference today. And even though digital spending still trails in the market, it's growing fast as multinationals try out new interactive programs.

Victor Koo, a keynote speaker and CEO of Youku, a leading YouTube-like video site, said that just a year after launching Youku already has reached 80 million video views per day.

Skewed by local brands
"China will be the No. 1 internet market very quickly, and online advertising will become a significantly higher portion -- 8% to 10% -- of the market," he said. Speakers estimated that digital advertising accounts for only about 5% of all media spending in China today, but they said that figure is skewed by local brands' scant interactive spending.

"For some products in the upscale Nseries, we spend about 25% or 30% [of the budget] or sometimes higher on digital," said Dan Wong, Nokia's VP- multimedia sales and channel management, China, during a panel on mobile marketing. Mobile is more advanced in China than in the U.S. but still faces obstacles ranging from budgets to figuring out how to use a new medium and measure its effectiveness.
Dan Wong
Dan Wong Credit: Kevin Lee

"Typically you have one individual who gets it ... and pushes the [mobile-marketing] program through," said David Turchetti, CEO of 21 Communications, a digital-marketing agency. "Success depends on how involved we can keep that executive. If it's passed off to a midlevel team or to a traditional agency, typically it falls apart."

One of the hits of the conference was a Nokia viral commercial called "MC Farmer," a mock documentary that claimed rap was really invented by a Mongolian farmer. After his panel, Mr. Wong said there is interest in the idea outside China too, with Nokia executives in other countries wondering if they might concoct similar efforts on, for instance, the origin of salsa dancing.

How to measure viral?
Musing on how to evaluate edgy viral efforts, Mr. Wong said, "Is it bringing back the investment, the ROI? You can't measure the halo effect. No one can. Is it building our brand? This could backfire if we're not careful. And by doing a digital campaign, if we then couldn't [afford to] do a product campaign, do we lose sales?"
Harry Hui
Harry Hui Credit: Kevin Lee

Marketers in China have been inspired by "American Idol" and its Chinese reality-show imitators. Doing its own version, Pepsi invited Chinese consumers to submit a 200-word script for a spot that would be shot with a pop star. Harry Hui, chief marketing officer, Greater China, of PepsiCo's Beverage Business Unit, said that 28,000 scripts poured in and 5 million people voted for their favorites. A 28-year-old schoolteacher won, and his spot was filmed and aired.

"It was entirely directed by consumers," Mr. Hui said. "The Pepsi Creative Challenge took the whole concept of meetings and storyboards and turned it inside out and said, 'You guys decide.'"

Lenovo Group turned its sponsorship of the Olympic Games' longest torch relay -- stretching across 31 provinces and 113 cities in China over three months -- into a more earnest version of "American Idol." The marketer partnered with Google to invite people to send in nominations explaining why they should get to carry the torch.
Deepak Advani
Deepak Advani Credit: Kevin Lee

More than 6,000 people entered, said Deepak Advani, Lenovo's chief marketing officer and senior VP of e-commerce. "We picked 18 finalists who posted their videos on YouTube on why they should run the torch." One student lobbied his entire university for votes, he said.

About 230 people attended AdAgeChina's second annual conference, held at Shanghai's Westin Hotel.
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