SHANGHAI – Continuing its position as the industry leader in paving the way forward for marketing communications in China, OMD has launched the fourth edition of Transcend, its annual predictions on media trends shaping the country’s advertising landscape. In 2018, OMD’s findings range from insufficient video inventory to the future of branded content. As always, the study provides forward-looking insights and key implications of major developments for media agencies, brands and media owners alike, allowing them to inform their marketing strategies for the year ahead.
Speaking at the launch of the research study in China, Bhasker Jaiswal, Managing Partner of OMD China, commented: “With the ever-changing landscape, increasing competition, the lack of data in certain sectors and further BAT consolidation, the challenges for marketers only continue to rise. Armed with the findings of Transcend 2018, our clients can start to address these challenges with stronger confidence and certainty, enabling them to future-proof their business for what lies ahead.”
Some of the key findings from OMD’s Transcend 2018 include:
1. Inventory Insufficiency
Video inventory shortages are due to a number of issues. On TV, significant rating declines mean that brands are fighting for prime-time inventory on CCTV and PSTV to build reach. On OTV, advertising clutter has risen by 72% since 2013, pushing more viewers towards membership-based services in order to skip over advertising. Brands face a significant challenge in securing video inventory in 2018. To tackle this challenge, brands need to compete aggressively on the price or diversify their buying strategies beyond hot programs and prime time.
2. Muddled OTT
OTT (Over-the-top) spending grew by 160% in 2017, indicating the potential of OTT as video media to backfill TV and OTV shortages. However, the Chinese OTT landscape is still very fragmented. There are multiple stakeholders involved and as a result, most of the guesswork takes place during the stages of inventory prediction to tracking. Therefore, the OTT landscape will remain the Wild West for the next 12 months. Brands should understand the OTT environment and try to find the best buying method available to them, then test on a small scale before treating it as a core part of media plan.
3. Mobile Stability
The volatile mobile app landscape has finally been stabilizing. In most categories, the top app list has remained unchanged since the second half of 2017. For online video, where consolidation has already taken place, the top 5 video apps account for 95.7% of all video traffic. While this is not true for all mobile apps – short videos, livestreaming, paid music and paid knowledge will still experience changes and spending growth in the coming year. With consolidation, brands can now build long-term relationships with the hero apps by concentrating their spending, tapping into better inventory and creative executions via partnerships.
4. Content Commoditization
The rise of the content economy demonstrates how the production of content has become more plentiful and economical than ever before. Branded content – especially non-video versions – are so commoditized, it has inundated the market. Instead of working with individual KOLs, brands now need to work with Multi-Channel Networks (MCNs) KOL management groups, ensuring cooperation among the most popular KOLs at all times. Content quality becomes more important to the brand than ever. Brands should cooperate with renowned production houses for their strong content innovation capability and sophisticated execution skills.
More insights from OMD China’s Transcend 2018 can be found in the full research study, which can be downloaded here: http://bit.ly/2FRtgG9.
