Adtech Shanghai Conference Highlights

Ad-Tech Shanghai 2005 Conference (Nov 15-17th) Highlights
While the theme of the 1st time Ad-Tech in China conference, was “Digital Marketing- Where we are and where we are growing,” to my surprise, there didn’t seem to be much written about what went on during the conference after the event was over.

Although there were some disappointments like the BabyFace Networking party being cancelled and the lack of energy and somewhat serious tone of the first day’s keynote (its common Chinese business protocol to have local Chinese government officials give an address and kick things off), things did liven up by Wednesday evening for the adhoc drinks at Jin Mao Tower in the Hyatt Hotel thankfully due to Susan Cendara’s spontaneous corralling!

So for those of you who were not in attendance, but are craving and searching for the shortened low down on who was there, what went on, secrets revealed and deals made in between track sessions, here is my 2 cents on the conference highlights and the most memorable musings from not only the speakers but the audience members as well!

Keep in mind, the state of the China advertising market is changing significantly at this time, especially considering that Advertising as an industry has only arrived in China roughly 10 years ago. With that being said, many agencies here in China and Shanghai were very interested in what issues and topics a first conference for ‘Digital Marketing’ in China would discuss and who among industry leaders would gather for networking and collaboration.

Needless to say, the conference drew over 600 attendee’s and a strong cast of industry leaders from both local Chinese companies to global Mutli-National Companies from the US and Europe including: Yahoo China!, Microsoft, Google, Zhongsou, NetEase, Tom Online, TenCent (QQ), Ogilvy One Worldwide, CBS Digital Media, Ave A/ Razorfish, eBay, Alibaba and many other local Chinese agencies covering Research, Mobile Marketing, Search Marketing, Interactive Media and even VC Funding.While there was simultaneous translation services available via headsets, the audience itself as well as the panelists did seem to lack a stronger local voice and representation from Chinese agencies and marketers.

There was one session which comes to mind that did convey a global representation of both markets: Online Media Reporting and Optimization US and Asia Comparisons, which included panelists Hiroshi Momota from Japan, Ruth Stubbs covering the AP region, and Young Bean Song from the US.

So now for the Top 10 Insights from the conference:

1. With over 130 Million internet users in China, and that being just 8% of China’s internet population, the potential for the internet market in China is tremendous. The internet as a marketing channel is only 6% of advertising spend, signifying the huge growth opportunity to develop this market here in China.

2. Search and the marketplace are converging and the potential to capitalize on the value of Search Marketing is growing fast Because Search marketing as an industry is growing from a far less critical mass (as compared to the US), in China, it therefore seems like its growing even faster. Today, its estimated there are 300 Million searches a day and by 2006, that number will grow to 600 Million searches /day.

3. Search however is still in its very early stages in China. It is only when you can add the intelligence (relevancy) into search results will the opportunity arise. Today, many people do not find what they want when doing a search online in the search engines. Not to mention, ecommerce is very much in its infancy as well with online payment solutions still trying to gain wide acceptance in a historically, very cash-based society very weary of security online.

4. Broadband is transforming media and the move toward digital convergence is steadily approaching. We can see a direct correlation of broadband and the way you use media online. Consumers are changing habits of consumption while Marketing as an industry is moving too slow to meet their needs.

5. The consumers are fast becoming the content provider, producer and distributor, resulting in a ‘My Media’ generation where people demand and access media on their terms.

6. The biggest opportunity in monetizing the blog as a marketing channel is in product recommendations based on the fact that the strongest influencer for consumers is word of mouth through friends or referral. To capitalize advertising through blogs would only work if it was based on particular user habits or preferences, leading to the significant discussion on behavioral targeting as the next wave of targeted ad serving.

7. There is a rise in interactive forms of entertainment and especially among MSN users in China where they are sharing their entertainment experiences with their friends online. Instant Messaging is will fast become the new carrier for advertisers. However the IM industry will need to balance relevancy with function so as to avoid ‘annoying’ IM users with useless advertisements and messages that may steer users away.

8. There is a real opportunity for Loyalty Programs in China. This type of customer retention and customer data collection program is far a few between in China but could do massively well in a population as large as it is (1.3 billion) The next phase in CRM is really customer retention after all the efforts made to get them!

9. Standards are lacking in China for media buying, in particular for adserving. There is a lot of good data available but in China it is not used very much or in the same fashion that other agencies outside China would use. In China, clients here do not use 3rd party adserving. Therefore when clients in China don’t see the reports from their agency, it is creating large discrepancies in pricing and the industry must come to an agreed value on adserving. In the US, the commissions typically can be from 3-5% whereas in China it can be as high as 50% which is diminishing the integrity and reputation of this service. There is a need for greater transparency and collaboration among the agencies and there are some discussion going on now as we speak to bring a level of consistency and standard to this area of service. Only by sharing and being honest with the data and performance from adserving can agencies have legitimate metrics in which to show value to clients and better negotiate for contracts.

10. In terms of the ‘hottest’ area for growth, it seems to be that the next digital medium on the horizon, or what industry pundits loosely refer to as “the 3rd screen” (with tv being the 1st screen and the PC the 2nd screen) will be in PDA, Mobile, and the iPod. Taking all the messaging and cool technology of the internet and tv and transporting it all into one tiny little ‘something you can put into your pocket.’ While we all certainly know that in China, one simply isn’t a real person without their mobile, more and more we are enticed by the latest versions of mobile phones or smart phones where you can watch movies, personalize and create ringtones, pictures, or whatever to the point where your mobile becomes truly a ‘mini-me’of you that you can hold in the palm of your hand and share with all the world!

Certainly there is more that happened both on stage and offline (like the after parties and the gossiping after one moderator seemed to piss off one of the Google panelists during one of the sessions…but we won’t get into that here) and a lot that was discussed during the 3 day conference. However this is just a round up of the most poignant statements and discussions that went on here in Shanghai, in the vastly changing, advertising market of China, in my humble opinion.

PS: Another important note that was brought up about the best way to effectively market here in China, is to always hire the locals who know the specific nuances and particular details of doing things here in Shanghai or the particular city you are targeting. Making that button red and closer to the top or smaller with a different local word in Mandarin are the small but important stuff that make the difference. For foreigners, it will take 3 times as long (or more) to figure this stuff out! If you look to even Yahoo, who finally buckeled and sold its Yahoo China business to Alibaba, a local ecommerce player here (very close) in Shanghai, you will realize that it better to ‘go local’ and let them run it their way here and save yourself the headache of trying to force a process or standards that just may not be accepted here!

So remember, when in China, go local, go local!
Signing off for now...your i4shanghai correspondent,
--Ahnee