Put More Ad Dollars in New Media

There is no doubt that new media, including internet, mobile phone/WAP, LED/LCD in buildings or on public transportation vehicles, is becoming more and more important. By the end of 2009, the number of internet users in China was said to be 384 million, including 120 million mobile phone WAP/web users, and globally the number of internet users surpassed the 1.5 billion mark at the end of 2008. By 2010 it is predicted that globally there will be 5 billion mobile phone users and about 15% (740 million) will reside in China.

In any office building or new apartment building located in China’s Tier 1 and Tier 2 cities, you will find LED/LCD displays from Focus Media broadcasting commercials. You will likely see similar sights on any public transportation vehicle in China. Those LEDs/LCDs attract lots of attention, as watching them is actually better than doing nothing while waiting for a lift or vehicle to come, or riding in the vehicle.

Furthermore, we know that people, particularly young people, spend more and more of their time interacting with new media, watching TV programs/movies on the internet instead of TV, exchanging their opinions and thoughts on brands/products within on-line communities, communicating via SMS, Email or mobile phone, and viewing ads on LED/LCD displays when they are commuting or waiting is unavoidable.

However, the ad dollars obtained by new media is much less than what the traditional media got, particularly in emerging markets like China. Group M estimated that in 2009, the total ad spending on the various media in China reached up to 255 billion RMB; with 63% on TV, 3% on Radio, 10% in Newspapers, 2% on Magazines, 12% on outdoor, 8% on internet, and 3% on other digital media including LED/LCD.

From the growth rate perspective, the ad spending on the Internet saw 20% growth and the spending on other digital media grew by 10%. However, ad spending on TV also increased by 6%, and radio by 15%. This indicates the traditional media still very much dominate the ad spending market in China, not to mention enjoy very healthy growth.

Obviously, advertisers are still reluctant to put their money into new media. There are two probable barriers. One, of course, is the inertial force that traditional media still holds. The more influential barrier, in my opinion, comes from that fact that as of now new media’s measurement or evaluation system is not yet well-established. Advertisers need more solid information to tell them how well the spending on new media could promote their brands and boost sales.

Agencies, researchers and the advertiser must work together to build solid platforms, allowing the advertiser to feel comfortable when investing their advertising dollars in new media. We need to help advertisers understand where (from which media) the consumers actually get information, how (the effectiveness of different media) they are impacted by commercials and with whom (through which media) the consumers share their appraisal and complaints on brands.

For advertisers, while waiting for a solid evaluating system to emerge, being a little bit more brave and forward-thinking could be more rewarding than they might think.

March 16, 2010