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China 2016: THOUGHT LEADERSHIP |AGENCY RESPONSE

THE FUTURE ISNOW-HOW ARE MEDIA AGENCIES RESPONDING?

Patrick Xu
CEO
GroupM China
Patrick.Xu@groupm.com
 

The year 2015 saw fierce competition amongst BAT (Baidu, Alibaba, and Tencent). These kingmakers of China’s Internet were shaping the market, changing consumers’ behavior and the media world. But marketers are left feeling somewhat confused. The new media landscape o ers limitless opportunities but also risks in terms of which marketing channels to choose, how to make decisions and how much to spend. The more options available, the more important your investment decision is likely to be.


That makes the role of media agencies in helping manage the complexity even more important than ever before. New-media owners like BAT are extremely knowledgeable, but their data and knowledge comes from within their own ecosystem. Media agencies, like GroupM, by contrast, may not have the same depth of information, but have a much broader perspective. BAT might be part of the answer but not all of it. You cannot consider either Baidu, Tencent, or Alibaba as the single solution to a company’s entire marketing challenge. Therefore, brand owners need to work with those who have a much wider view of all the marketing opportunities out there and who have a more neutral, objective opinion about them.

CONSIDER YOUR OPTIONS

Look beyond BAT and we see how TV stations thrived in 2015 by o ering their variety shows and dramas, with high- quality content and cross-screen interaction. These hot programs have also generated buzz online. Before too long we could see packed cinemas, more Chinese-produced movies and associated advertising opportunities. Meanwhile, it’s worth noting that OOH (Out of Home advertising) grew 15 percent in the first half of 2015 year-on-year.

As marketers, we must look at the full picture of the media landscape to help us figure out effective solutions.

We see the evolution of media agencies toward a more holistic o ering, realizing synergies between data, content, communication planning and trading disciplines. Moreover, bringing these disciplines closer and allowing them to inform one another beyond their usual scope will provide more e ective media solutions. Technology is inevitably the biggest engine with which to drive the process. From a media agency’s perspective, technology represents the way we target and interact with customers, as well as the way we manage data.

GEARING UP

The importance of developing a technology stack for data management cannot be overstated. It’s the key to maximizing advertising performance and pricing. GroupM has developed its own technology to collect, optimize and store data on a proprietary Data Management Platform (DMP) and is rigorous in continuously expanding the stack with new solutions and companies. Soon it will be necessary for all brands to have their own DMPs, combining many data sources that can be accessed in order to know their target audiences better, for example, their socio-demographic, content consumption, interest, media behavior, and purchasing power.

Meanwhile, technology has evolved rapidly towards buying advertising spots across most screens and media types. This e ectual technology has enabled us to deliver dynamic and more personalized creations to di erent audiences, as well as real time optimization in performance. Programmatic buying will greatly enhance the e ciency and e ectiveness of the whole media buying industry. With more premium media inventory coming into the pool, especially from mobile and video, we can expect 2016 to be another boom year for this field, especially PDB (Premium Direct Buying) which allows brands to purchase with media reserved inventory as well as fixed cost. This is despite the challenges in the digital space such as viewability, fraud, measurement and currency, all of which we expect to be solved by market forces.

The only constant is change. Only by analyzing the full media landscape, and using DMPs to gain better data insights, as well as automated trading desks ensuring real time performance, can a marketer be more confident in his/her media investment decision.