#02 How does China’s advertisement market work? (Part 2 of "China's internet and creation") - SupChina
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#02 How does China’s advertisement market work? (Part 2 of “China’s internet and creation”)

This episode is the second part of a two-part series about how the internet changed the way to consume and create content. Last time, the panel comprised people who earn a living by creating only on the Chinese internet, but today we meet the other side of the fence, the more “capitalistic” one: those who make, sell, or deal with advertisements.

Featuring:

Kenneth Cheung: Data and branding consultant

Kenneth’s LinkedIn

Tera Fang: Fashion influencer

Tera’s Instagram |  Tera’s Weibo

Eloi Gerard: CEO and Founder of CrowsNest

Eloi’s LinkedIn

And, as usual, your host, Aladin

Aladin’s LinkedIn |  Aladin’s Twitter |  Aladin’s Instagram

Four takeaways from this interview:

1) Forget about TV advertisements.

In 2012: 20 percent of advertisement spending was on the internet.

In 2017: 57 percent of advertisement spending was on the internet, and only 31 percent on TV.

The online advertising market represented $47 billion in 2016, and will increase to around $90 billion in 2020. As a comparison, it’s more than the film industry at $7 billion, but less than the tobacco industry at $160 billion. The main reason online advertising is booming in China compared with in Western countries is because the television channels there are all state-owned and don’t really have an agenda about a specific type of audience they want to attract.

2) Without data, you are nothing.

The “BAT” companies (Baidu, Alibaba, Tencent) have much more data about their users than Facebook or Google because they own multiple platforms and services, making it easier to track down the kind of product you would want to buy. Therefore, brands and advertising agencies with smaller budgets can more efficiently target potential clients on the internet. If “data privacy” starts to be a thing in North America, Europe, or developed Asian nations, China’s general public seems to care a bit less about this.

But the Chinese internet is not the Wild West because some data, like credit card transactions, is illegal to buy. You can still find it on the market, but that would be totally illegal and risk prison time.

3) On the internet, hire a Key Opinion Leader.

For some reason, in China, even the most basic commodity like a burger or a car needs to have a spokesperson to represent the product. And as the Chinese internet is massively used by young adults in search of authenticity, users often try to link their products to one of those Key Opinion Leaders (KOL) to boost their products. If you are one of those KOL whose Weibo follower count is greater than the population of some small countries, you should consider starting your own brand at some point. Being famous is not enough — you have to be able to one day sell something of your own or you will be forgotten.

4) Technology will keep replacing jobs

As incredible as it sounds, artificial intelligence could slowly replace editors as they edit pictures and films. Just by saying to the computer “This advertisement should look like X,” the AI could potentially perform the task much faster than any human.

Also, as the adult-video industry and Xinhua have proven recently, it is possible to digitally re-create someone’s face on screen. One day, stars might not even have to go to a studio to shoot their advertisement; they will just rent their face and someone else will walk in front of the camera.

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Aladin Farré

With two degrees in movie production and Chinese history, Aladin felt it was only natural to go work as a nonfiction content producer in China. He is now a documentary project manager at LIC China (大陆桥), the largest importer of documentaries into China, where he hopes to uncover the secrets of successful international co-production. Follow him on Twitter @aladin_f.