Spend a few hours reading Digital Media, AdAge or some of the other trade magazines, and it will be hard for those in marketing not to become greatly depressed.
We now see with increasing frequency headlines saying 'down sizing' 'skills audits' and 'rationalization'. But is it all doom and gloom in digital marketing? Can digital marketing go from being the future darling in marketing, the bastion withstanding the downturn, to being lined up with other areas of marketing hit hard with campaign cuts and lowered spending? Is this a time for online publishers and online ad agencies to go into a hole and try and ride out this blood letting?
These are the questions I ask myself when trying to understand what the year holds for our industry. However, I am in China and this market has its own particular idiosyncrasies. Apart from the optimism for growth in digital spending, we will also be enthralled with powerful internet companies such as Baidu and Alibaba facing off in 2009 with competitive ecommerce plays, Tencent's QQ and Baidu in the area of instant messaging (IM), and the purchase of Focus Media by Sina providing them access to a large variety of new media channels.
This has echos of the Browser wars of the late 90's with Microsoft and Mosaic. It seems these companies are not hiding and waiting it out. They seem to be in their respective 'war rooms' planning for domestic dominance of ecommerce and other areas of digital marketing.
We know that the online publishers are now using their large cash reserves to develop new products and market positions, but does this mean we should want a single winner? Or should we as digital marketers want a new player emerge that can thrive and survive alongside the incumbent? Is having a single dominant search engine in China (Baidu) or in the rest of the world (Google) the best outcome for marketers, and in turn consumers, advertisers and others in the chain? Your thoughts?
With the attention of the dominant online publishers focused on strategic outcomes and fighting with their respective competitors, does this mean the 4A advertising companies will become marginalized while developing their own strategies for retaining brands and providing media, strategy and creative services? I don't think so. Follow the money! In fact, for some time a subtle evolving of the agency has occurred. Media agencies are no longer just media agencies; creative agencies are no longer just doing creatives. A shift towards full service digital marketing is occurring; while not widespread this is certainly a growing trend in China.
So I take all these interesting dynamics and come to the conclusion that the Chinese digital marketing industry is dulled by the global downturn but is definitely going to experience one of the most industry-changing periods ever seen in the Chinese internet space. I am excited to be working in this industry at this time in China.
To become an active player in this change you must:
- Be a active participant in the change process within your company.
- Understand the value that change brings and where this value impacts the various constituents in the chain.
- Use technology to drive improvements in processes (like company-wide CRMs, ad servers, etc.) and tools to show metrics to internal and external constituents (like web analytics and user engagement tools). These technologies provide scale and objective measurements, providing a baseline and evidence of change (either for the positive or negative).
- Become a champion for digital marketing outside your circle.
- Take an open approach to new business models.
So, be a part of this evolution and don't find a hole to hide in -- you will miss one of the most exciting periods of Chinese internet advertising.
Dr Mathew McDougall is group CEO and chairman of SinoTech Group.
