China's technologically liberated consumers are ready for a digital commercial revolution. But manufacturers and their communications partners -- advertising agencies, both digital and traditional, as well as media companies -- are letting them down by not approaching the sector strategically.
Liberation for Everyman
It is difficult to overstate the impact China's launch into cyberspace has made for Middle Kingdom's Everyman. Today, the country boasts 500 million netizens, 150 million of whom have access to high-speed Internet; 200 million bloggers; 100 million micro-bloggers (Chinese "Twitterers") and 800 million mobile phone users. Digital technology has been secularized. No longer used only by young urbanized hipsters, the sea change epic. Shielded by on-line anonymity, free wheeling surfers broadcast accomplishments, weigh in on current events, download porn, hook up for sex, release rage through violent video games, criticize the government (gingerly), and plug into virtual communities. True, China's Great Digital Firewall extinguishes hints of collective protest. But Westerners overestimate the constrictive effect of 50,000 net nannies. Denizens of the People's Republic have more opportunities to explore the world and are freer to express views than any time in history. None of this would have been possible without the Internet.
For bargain-crazy consumers, the rise of e-tailers presages an era of commercial Nirvana. According to the China Internet Network Information Center (CNNIC), in 2010, 40 million Chinese booked hotel rooms, airline tickets and holiday tours on travel websites such as C-trip. On-line activity accounted for only an 2% of total 2009 retail spending, up from 1% in 2008; however, rates in coastal cities are already much higher. Alipay, e-commerce behemoth Alibaba's version of PayPal, has made skittish, reassurance-driven consumers more at ease conducting digital transactions. (China has historically been a "cash is king" society. But consumers are increasingly comfortable spending on-line as long as they can inspect merchandise before transactions are completed.) On-line emporiums such as Taobao have emboldened shoppers to ruthlessly compare prices, realigning the balance of power between buyer and seller.
For most brands, unfortunately, the digital revolution has not been harnessed. Few have exploited on-line tools to lift profit margins. Virtual consumerism is even more commoditized than in the bricks and mortar world. (Few smart phone users are willing to actually pay money for apps.) As a rule, cyberspace has been carpet bombed with promotional cheap fixes, with zero message consistency or insight into the emotional drivers of netizens. Yes, there are exceptions. PepsiCo's "Get on the Can" Challenge provided ego-driven youth a platform to shine, literally, by emblazoning faces on cola packages. In the process, the campaign generated 600 million hits. Ford's "21 Day Excitement" competition employed on-line canvassing to select ten "everyday superstars" to morph from "bland to bold," dramatizing its "Make Every Day Exciting" proposition. To promote the N-series range, Nokia's "Bruce Lee Reborn" viral and Ovi app campaign connected surfers to an icon of Chinese masculinity. Most of the time, however, China's digital landscape resembles a real world bazaar: noisy and clanging, promotion-happy, discount-driven, with the vast majority of on-line advertising slapped onto highly trafficked portals (e.g., Sina, Baidu, QQ) as banner ads.
Required: A New Brand Building Vision
The communications industry must lift its game to harness the energy released by China's digital big bang. To do that, we need a North Star.
The Brand Idea: Still Sacred. Without the unifying power of the Brand Idea, conceptual chaos erupts. For decades, advertisers' responsibility has been to forge brand ideas that evolve, but do not fundamentally change, over time. They are rooted in insight, the fundamental motivations of consumers. Through sports shoes, we buck against societal convention to Just Do It on the basketball court. Through engagement rings, we demonstrate enduring passion because "A (DeBeers) Diamond is Forever."
Brand engagement occurs over the airwaves, in the supermarket aisle via blue tooth, through the latest iPhone app, or an on-line loyalty program. And the brand idea, the long-term relationship between consumer and product, is at the center of it all. Apple's "Think Different," Kit Kat's "Have a Break," Axe's "Chick Magnet," Rejoice shampoo's "Confidence from Softness," or Pepsi's "New Generation Choice" is the unifying core, order's gravitational force. The industry must acknowledge new technological experiences are never, in and of themselves, ideas. Instead, they allow consumers to engage with ideas in new ways. True, marketers are often digitally "clever." Headlines such as "P&G turns virtual makeover app into Max Factor contest," "Budlime launch ties into Tudou's first drama series" and "Unilever links hot steam with warm wishes in Lipton contest" are common. But they rarely reinforce an enduring brand idea. New media titillation has led to digital promiscuity.
From Passive Consumption to Active Participation. The fundamental role of the brand will not change as a result of China's digital liberation. Indeed, as brand options multiply and media costs skyrocket, the need to minimize consumer disorientation is more urgent than ever. However, the one-to-one nature of digital expression provides opportunities to deepen and broaden involvement. "Creative ideas" can become "engagement ideas," transforming passive exposure into active participation. Advertising agencies should no longer produce work that "interrupts." Instead, we should "make things" - content -people want to spent time with. DeBeers "Love World," a microsite where young men express commitment by creating a virtual world of "omnipresent" love, is the shape of things to come. So is Nike Plus, a hi-tech manifestation of the "Just Do It" spirit that enables runners to compete with athletes anytime and anywhere on the planet. Axe's "sexy wake up call," an app that brings the product's "masculine irresistibility" into the bedroom, demonstrates technology's power to reinforce a core brand proposition.
Consumption of communications via digital devices - mobile phones, tablets, computers, etc. - is revolutionary because manufacturers no longer "broadcast" messages. Through a bewildering array of channels, engagement is one-to-one, between marketer and users or between users themselves. "Content" is played with, commented on, expanded upon, competed with and exchanged within "brand communities." Corporations need to accept their ability to "control" messaging - how a product is positioned, how brands are commented on publicly - will never be the same. (A caveat: broadcast media will never be eclipsed as the primary means of defining propositions. China, a country in which consumers have relatively limited inexperience in digesting brands, requires simplicity. The 30-second television commercial, passively received, is an irreplaceable, albeit expensive, weapon in forging conceptual order. This is why international agencies and media companies operating in the PRC still earn almost all revenue from "traditional" advertising.)