GroupM releases 2016 media trend report

By Yang Lan Source:Global Times Published: 2016/10/23 18:08:39

GroupM, a leading media investment management group, released its 2016 media trend report titled "Shan Hai Jin" in October 2016. The report surveyed 20,000 individuals from 278 cities in China. After analyzing their media usage, lifestyles, consumption habits and attitudes toward brands, the report offers valuable market guidance and advice regarding communication opportunities, channels and content across China, especially in third-tier and fourth-tier cities.

Advertising plays a significant effect on consumer behavior. The secret of effective advertising is how and where to advertise especially after the appearance of new media channels that has disrupted the traditional ways of media usage.

According to "Shan Hai Jin," 59 percent of consumers in China's first-tier cities believe that their choice of brands are greatly influenced by advertisements, while 49 percent do not trust products that have not been advertised.

Fifty-five percent of them consider the brands advertised in more media platforms more trustworthy. Meanwhile, 49 percent think that they cannot fully rely on brands that only advertise through Internet. Over 60 percent find TV ads more impressive than online video ads.

The reach of an integrated marketing plan that includes product placement, advertisements in television, online videos, variety shows and other media platforms could be as high as 98 percent. However, the situation varies slightly in third-tier and fourth-tier cities.

(From left) Rycan Di, managing director of GroupM Trading, Michelle Jiang, talent director of Mindshare China, Mickey Zhang, CEO of programmatic businesses, GroupM China, Benjamin Wei, managing director of GroupM Mobile, Zod Fang, head of GroupM Knowledge, at a discussion Photos: Courtesy of GroupM

(From left) Rycan Di, managing director of GroupM Trading, Michelle Jiang, talent director of Mindshare China, Mickey Zhang, CEO of programmatic businesses, GroupM China, Benjamin Wei, managing director of GroupM Mobile, Zod Fang, head of GroupM Knowledge, at a discussion Photos: Courtesy of GroupM





Third-tier and fourth-tier growth

Recent years have seen a positive shift in the income level and consumption pattern due to urbanization and industrial migration from coastal to inland areas. China's third- and fourth-tier cities are quickly catching up with Internet usage, and have been impacted by ads in different ways.

As Internet usage spreads to China's third- and fourth-tier cities, the percentage of net users among people 15 to 45 years old is only 9 percent lower than in first-tier cities. About 40 percent of consumers watch videos online 70 minutes every day on average.

The reach of advertisement in movies increased 50 percent in third-tier and fourth-tier cities because of the emergence of shopping malls equipped with movie theaters. Since there are not many other entertainment options, the frequency of movie viewing in these cities is higher than first-tier cities.

There is market potential for out-of-home media in third-tier and fourth-tier cities. Out-of-home faces a lot of challenges in first-tier cities as the market becomes saturated and residents prefer to stay at home. Instead, the reach of out-of-home ads will be greatly increased in third-tier and fourth-tier cities.

As car sales rise in third-tier and fourth-tier cities, the daily reach of radio programs also increased 78 percent. Regarding content, residents from third-tier and fourth-tier cities prefer local content that they are familiar with. Foreign content is less attractive.

China's third-tier and fourth-tier cities boast of a population that accounts for two-thirds of the country's total, and their consumption is over a half of urban China. These third-tier and fourth-tier cities are becoming huge markets for brands.

"In the world of media and advertising, our job is to manage constant change. We believe that there is great space for growth of the channels mentioned above in third-tier and fourth-tier cities, and we do notice that many brands have been paying close attention to these cities," said Patrick Xu, CEO of GroupM China at the 2016 ROI Festival, a four day inspiring event for those working in the creative communications, advertising and related fields. "We need to provide our clients a full picture of China's media landscape, as well as tailor-made communication plans. That's one of the reasons that we keep investing in various research."

Patrick Xu, CEO of GroupM China

Patrick Xu, CEO of GroupM China





The best and worst times

"In media and marketing industries, we are driven by two strong forces: digitization and content," said Rycan Di, managing director of GroupM Trading.

Digitization has enabled marketers to track consumers' behaviors through data collected on digital platforms. Regarding new data technologies, Zod Fang, head of GroupM Knowledge, believes that it is both the best of times and the worst of times for marketers.

"Now there is a lot of data available for us to do marketing planning. In the past, we had to 'grope the stones to cross the river.' But now, we have the data to lead our way," Fang said.

But the situation will soon get more difficult, as the speed in producing data has outpaced people's capability of processing data. "Marketers' roles changed from collecting data to analyzing and integrating data," he added.

Mickey Zhang, CEO of programmatic businesses, GroupM China, explained the three phases of using data. Collecting data is the first phase, where marketers dig through voluminous data and find the most effective, timely and meaningful data points. During data processing in the second phase, marketers transform data into information through analysis and use it to support their decisions.

"It is not enough to just transform data into information, as we need to also make the information our knowledge, and use it in our marketing strategies," said Zhang. "When the marketing strategies are carried out, when we solve the problems in marketing and when we predict the future with the knowledge, we will have finished the third phase."

Future of programmatic buying

GroupM has invested a lot in data mining since it began accumulating experiences in data technology eight years ago, and it has invested a lot in data mining. The new generation data management platform Turbine created by Xaxis, the world's largest programmatic audience company, has processed and saved over 250 trillion pieces of data.

Every second, Turbine collects and analyzes 200,000 consumer data points. With over 650 partners worldwide, the platform is matching 10 billion pieces of equipment to collect data; the accuracy of Xaxis' prediction is 20 percent higher than other third-party platforms, according to comScore.

Benjamin Wei, managing director of GroupM Mobile, believes that data technology represents the future of programmatic buying. His team launched GroupM Humming Bird, a one-stop solution for mobile marketing. The platform integrates firsthand data from online and offline sources, using the data to help advertisers understand customer behaviors and assists in developing media and communication strategies. "We do not produce data, but we are the processor of accurate data," he said.

"Only retaining and attracting great talents can we handle all these changes and challenges," said Michelle Jiang, talent director of Mindshare China, "If you are creative thinking, passionate, fast learning, curious, and most importantly, embracing changes, we want to meet you!"
Newspaper headline: Embracing the changing new era


Posted in: METRO SHANGHAI

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