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In the first half year of 2020, global economy declined because of COVID-19. China made steady progress in controlling the epidemic and took the lead in GDP recovery in Q2 after work and production resumption. Chinese people have gone through a process from worry and panic, to gradual recovery of confidence and consumption capability. As globalization goes under challenge, China adjusts economic development strategy, shifting to a new pattern that the internal circulation is the key, while internal and external circulations promote each other. The new economy promotes the development of Internet economy, resulting in consumers, media and brands all step into digitalization. In this issue, we will summarize the key observations of Media Scene 2020 Fall.
Key takeaways are as below:
Digitalization for All: Consumer-Media-Brand
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COVID-19 pushed many people to go online. Some offline behaviors had been transferred online and became normalized during the post-epidemic period:
The Internet penetration rate of middle-aged and elderly, teenager and lower-tier population has increased, and usage of key online media remains at a high level during post-epidemic period.
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Media landscape continues to be reshaped, as traditional media is seeking innovation and upgrade proactively:
Intelligentization of smart big-screen devices advanced, and users gradually developed the habit of choosing content by themselves and watching on-demand content; traditional OOH and cinema sped up digital transformation, and OTV releasing new films offered another option for film distribution
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Advertisers tend to allocate more to digital media and internet platforms, in which livestreaming and short video are the most popular:
More than 50% of advertisers are wiling to spend more on online media, in which livestreaming and short-video marketing both take up more than 50%. GroupM forecasts that internet advertising spending will increase by 4.2% in 2020.
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Upgrade digital marketing strategy and merge “Marketing-Operation-Sales” chain to reach consumers directly and enhance conversion efficie
ncy:
Appropriate marketing strategies can accelerate the “marketing-operations-sales” convergence with traffic, interactive tools, and e-commerce/payment tools. Meanwhile, they could also serve consumers and manage customer relation in different scenarios.
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Leverage various online channels to explore possibilities in digitalized content marketing:
Produce Brand Generated Content (BGC), Professional Generated Content (PGC) and User Generated Content (UGC) according to corresponding marketing scenarios and formats, in order to meet brands’ needs and target audience effectively. And then, pay attention to traffic volume and influence at content level, brand influence at brand level, and sales conversion efficiency at performance level.
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Content and data become the double engines for marketing, utilizing MarTech and AdTech to layout marketing chains, and accelerating the process of brand awareness→brand conversion:
Based on large volume data, MarTech facilitate digital transformation at all nodes of the marketing chain, provide brands with sophisticated marketing and operation tools, and strengthen the brand’s digital assets and self-owned channels’ capabilities.
COVID-19 pushed many people to go online. Some offline behaviors had been transferred online and became normalized during the post-epidemic period
Impacted by quarantine during the pandemic, people spent more time at home, and were pushed to go online. Traditional offline scenarios such as education and work went online, and consumption behaviors such as online entertainment and online shopping were reshaped, resulting in a growth in Internet user and usage. Time spent on internet of different age groups all increased, and middle-aged and elderly became internet users as they needed to search for latest information and get access to Health Code mini program. By this June, internet users aged 40 and above reached 106 million, increased by 11.6% YoY; total time spent online per month was 9.25 billion hours, increased by more than 40% YoY. Online shopping/payment, remote working and online entertainment all contributed to the fact that internet is penetrating into lower-tier markets. To be specific, active penetration rate of apps for remote working in lower-tiers remained at a high level of 19.9% in June. Benefited from increasing remote education demand, online education and conference platforms gained increase in both users and usage scenarios. The Internet penetration of minors (7-18 years old) has reached 99.2%. Internet has been deeply integrated into the life of minors, and online learning ranks the third of their purposes for going online. The age that minors first had access to Internet is getting younger, and the proportion of minors aged 10 and below had access to Internet reached 78%.
Increase degree of usage during the epidemic
Active penetration YoY change of APPs’ users in tier 5 and below, Jun. 2020
Media landscape is being reshaped, as traditional media is seeking innovation and upgrade proactively
The Epidemic made people to stay at home, and the market size of IPTV and OTT reached 580 million in 2020H1. The content of home smart screen also gets more diversified as it synchronizes with online video platforms and thus satisfy different audiences’ needs, resulting in its on-demand rate reached a peak during epidemic. After the work and production resumption, those users who had been activated during the epidemic period preserved the habit of using big screen. Although livestreaming rate dropped significantly, on-demand declined slowly. Hence, we may conclude that users gradually developed the habits of choosing content by themselves and watching on-demand content.
Avg. ratings per household in the first half of 2020 (%)
Avg. daily use time of smart TVs (pre-epidemic VS. post-epidemic)
Consumers retain a keen interest in high-quality content, but the supply is not adequate to the demand
Traditional OOH media and cinema were heavily impacted by the epidemic, thus sought digital reforms proactively. With the aid of technology, OOH continues to innovate and explore new way of communication and interaction. Content distribution channels also moved online, as online cinema became another option for online video platforms to attract more users.
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Restricted by the epidemic, it was impossible to launch new OOH advertisements or remove the previous ones manually, which revealed the shortages of traditional OOH. Starting from March 2020, proportion of DOOH increased obviously, reached more than 50% for the first time and showed stable trend afterwards. After this special period, the digitalization of OOH may be further processed.
Jul. 2019 - June 2020 Changes in the proportion of rate card expenditures OOH vs. DOOH
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Benefited from the increasing entertainment needs during the stay-at-home period, the MAU of three major online video platforms iQiyi, Youku and Tencent Video reached a peak in February, and that of iQiyi and Tencent Video maintained afterwards. The user base of these three platforms provided a foundation for online film release. In total, 376 films were issued on these three platforms: iQiyi took up the largest amount with 176 films; Tencent published new allocation rules, and released 86 online films in the first half year, which increased by 10.3% YoY.
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These three platforms also launched Watching Film Series event in collaboration with film studios such as Universal Pictures and Sony, to increase their inventory therefore attract more audiences. Furthermore, several films turned to online premiere, and online video platforms may bring more possibilities for future film distribution.
2020H1 OTV platform user scale (10,000 people)
Premiere situation of new films
Advertisers tend to allocate more to digital media and internet platforms, in which livestreaming and short video are the most popular
With more offline behaviors went online, time spent on online social and entertainment increased. The digitalization of media also upgraded, and internet gradually became the major channel for advertisers. GroupM forecasts that internet spending will increase by 4.2% in 2020 and increase by 11.0% in 2021. According to a survey of advertisers, they expressed strong intention to increase budget on online media, in which livestreaming and short-video got chosen by more than half of the advertisers.
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Media type that Chinese advertisers plan to increase marketing budget in the next year
Upgrade digital marketing strategy and merge “Marketing-Operation-Sales” chain to reach consumers directly and enhance conversion efficiency
As economy is recovering to a New Normal in the post-epidemic period, brands have higher demand for conversion efficiency. Many brands quickly adapted e-commerce, livestreaming and short video channels during the epidemic. Leveraging internet’s multi-channels and multi-touchpoints, brands could effectively establish a shortened chain to reach consumers directly, and continuously serve consumers and manage customer relation in different scenarios. For example, increasing number of brands are leveraging mini programs to issue coupons, generate interactive games, etc., and this is to help them realize close-loop service and in-depth operation. Livestreaming also becomes a long-term service channel for brands, integrating with traditional supply chain and pushing forward the digitalization of traditional enterprises.
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Leverage various online channels to explore possibilities in digitalized content marketing
Content and marketing continue to merge and develop, and content marketing has evolved as a result. Centralized content marketing format, represented by BGC and PGC, uses content’s influence to carry marketing information to reach the audience. Decentralized content marketing format, represented by UGC, powered by interaction mechanism and production capability to guide users to distribute and re-produce the content spontaneously. And now short video and livestreaming are the most prevalent channels, but brands need to select corresponding scenario and content to meet their demand and match target audience in order to realize innovative content marketing.
Content and data become the double engines for marketing, utilizing MarTech and AdTech to layout marketing chains, and accelerating the process of brand awareness→brand conversion
Huge volume of data is generated during the process of digital content production and distribution. MarTech facilitate digital transformation at all nodes of the marketing chain, provide brands with sophisticated marketing and operation tools, and strengthen the brand’s digital assets and self-owned channels’ capabilities. And then, it accelerates the process of brand awareness→brand conversion. Take the new domestic brands’ rise as an example: brands use light capital OEMs to strengthen brand design and product iteration, leverage digital channels to shorten marketing and sales chains, and directly arise consumers’ awareness. Moreover, brand building has become the next step in their digital transformation. With the help of diversified content and social fission, brand recognition and favorability will be further built.
