How the Internet is affecting marketing
Updated: 2011-06-13 14:57
By He Wei (China Daily)
Biotherm, a leading skincare brand from L'Oréal, uses a micro blog on weibo.com to promote products. [Photo / China Daily]
It was the third time she had received a free sample this year, either for sharing her experiences of skincare or participating in online bidding.
With or without even realizing it, the 20-year-old sophomore had played a role in increasing the popularity and sales of the cosmetics, while at the same time getting a decent return.
"My friends and I find new skin products through micro blogs (Weibo in Chinese) or gaming sites, and we carefully study the online comments before deciding whether to buy them," Zhao, the young but experienced online buyer, told China Daily.
The days when TV commercials were seen as key to successful marketing strategies are long gone, superseded by the Internet and social media, which make traditional advertising obsolete by upending the way it interacts with potential consumers.
Synovate, a UK-headquartered market research company, reported after a recent survey that 64 percent of Chinese netizens have access to the Internet every day, spending an average of 11 hours online each week.
In addition, the survey revealed that for respondents aged between 8 and 24 in first-tier cities in China, the Internet has replaced television as their "life essential".
"Mobile phone users are now spending 5.8 hours per week on non-talk activities, compared with 3.2 hours per week on talk," said Edwin Song, head of Synovate China. "They are willing to swipe the finger to decide what they have for lunch."
These and similar findings have driven international businesses to increasingly rely on various forms of word-of-mouth marketing to attract new clients.
Sec-kill, a concept with its origins in Internet games, has become a new way for bidding online where products are only available for a short period of time. Companies including BMW, McDonald's and Apple Inc have introduced sec-kill into their marketing portfolios.
Zhao once won a facial mask through a taobao.com sec-kill. She said being the winner among thousands of netizens gave her a sense of accomplishment. "It can attract my attention and enhance my engagement because many of my friends are involved in it. As a result I end up liking the product anyway, even if I had never heard of it before."
Inspired by the success of Groupon.com in the United States, many start-up companies followed suit and spawned a multitude of sites in an attempt to benefit from group purchasing in China.
On meituan.com, a group purchase website exclusively selling skincare products, people are abuzz with discussions about high-end perfumes such as Chanel's No 5. With a 60 percent discount, 3,000 bottles were sold in less than two days.
The move by McDonald's to launch a branding campaign called Group Lunch with Kaixin001.com, one of the most popular social network sites in China, was aimed at encouraging netizens to choose specific branches for lunch together. Some 150,000 people participated, enhancing the brand's awareness among white-collar workers.
With micro blogs now firmly dominating social networks, big companies are moving in.
Biotherm, a leading skincare brand from L'Oréal, launched its official micro blog on weibo.com earlier this year. The site has more than 40,000 followers and regularly updates the latest promotional activities, answering online inquiries instantly and providing useful skincare tips.
"Passive learning no longer fits into the pattern of modern life. Ordinary people are playing a more active role, exchanging views on product promotions," Zhou Jing, public relations manager at Biotherm China, said.
Zhou said each brand from L'Oréal China has set up a digital division to oversee online marketing strategies, and annual budgets on e-commerce are steadily on the rise.
As a frequent visitor to Biotherm's micro blog, Zhao said she posted her skincare diary on a regular basis and actively engaged in every online discussion.
Daisy Zhang, chief executive officer of CIC, a domestic leading social business intelligence provider, broached the importance of using "e-fluencers" - people who have large social networks and are good communicators - to positively promote a brand. Zhao is one such person.
The ancient form of communication known as word of mouth has been updated using new technology such as blogs, online message boards and podcasting, now known as IWOM (Internet word of mouth), Zhang told China Daily.
"Marketers are now reaching out to 'evangelists', who are already die-hard fans of a brand, in the hope that trendsetters would pass the information to others and create excitement about a product," she said.
"Word of mouth is the most honest advertising medium there is."
Zhang's remarks were echoed by Ethan Tsai, chief operating officer of AdMaster, a digital advertisement monitor supplier.
Tsai said evaluating effectiveness is crucial to any digital campaign, but "depending solely on the ratio of clicks to evaluate the impact of online ads presents a one-sided and incomplete picture. A more precise approach is to monitor and analyze the process of exploration, conversation and change in brand recognition, where opinion leaders often played a role".
But the unique Internet landscape in China has barred many multinational companies from taking a decisive stance on digital marketing.
"It is largely fragmented, reflective of the current social economic status of China," Zhang from CIC said. "If you are doing business abroad, you throw investment into Twitter, Facebook, Youtube and Groupon, and you are almost there. But the growing number of operators in each channel in China have complicated the situation."
"For a high-involvement product, such as cosmetics and digital products that require time and effort before the purchase, merchants should make a presence on specific websites in a professional manner. For low-involvement products such as washing powder or fast food, you need to gain as much public exposure as you can."
But it is impossible to provide a one-stop solution because of the fast changing nature of social media in China, Zhang said.
"Months ago, people were crazy about social networking sites. Today the majority is addicted to micro blogs. Who knows what is the next frontier of the industry?" Zhang said.
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