Surfing the growth waves of a next generation

Just 12 months ago, says hdtMEDIA CEO and founder Clarence Zheng, the industry was still debating when mobile and programmatic would become mainstream trends driving the market. Today, the discussion is done and dusted.

“This year we can see very, very clearly that all our clients agree that mobile advertising and programmatic advertising have become their key media buying methods,” Zheng says. “From our figures, we can see that clients are directing 50 percent to 70 percent of their budget toward mobile and programmatic advertising.”

The reasons for this rapid sea change are self-explanatory, he says, and brands have been very quick to adapt to the new paradigm once the direction of growth became clear.

“Everything we do now is connected to our mobile devices. It has become a tool for doing everything from switching on the air-conditioner to searching the internet,” he says. 

“You may not be actively watching ads when you use your phone but when you activate the device or open an app, there is a one- or two-second opening when ads can catch your attention.”

Waves of influence

That is changing the nature of digital advertising, and budgets have been migrating swiftly from traditional ‘hard’ advertising, such as TVCs and banner ads, to indirect ways in order to convey products and messages to consumers—particularly native content partnerships with bloggers and KOLs.

“We see clients spending 10 percent to 30 percent of their mobile budget on influencers and KOLs,” Zheng says. “They will produce content for the brand, certainly some positive coverage but this isn’t an advertisement. You may have a slogan for your campaign, but if I keep repeating your slogan in my video or in my article, then it won’t be natural, it will feel like an ad. That defeats the whole purpose.”

Zheng says the reach is staggering for some internet stars in mainland China.

“Some of them are getting 100,000 to 200,000 views on a single post. And that’s not necessarily a particularly famous person or a celebrity of any kind. They might be a free-thinker or a professional with experience in a certain sector who has a particular ability to write articles.”

Clarence Zheng listens to ads to help improve the buy-side experience

Yet Zheng warns that there are hazards brand marketers need to be aware of when approaching native content, not least of which being the difficulty in demonstrating and evaluating ROI and the impact of any collaboration.

This calls for a change in mindset for brand executives who are usually accustomed to ad agencies giving guarantees of delivering outcomes. Compare this to when an individual blogger “cannot commit to a promise of just how many people will see the post”.

“At the end of the day there are some pieces of content or native advertising that simply cannot be fully evaluated. For a marketer, however, if they can’t evaluate, they won’t secure the budget. This will be a conflict in the future.”

This is where Zheng believes hdtMEDIA has a role to play. “We’re not an ad company. We are a tech company,” he says. “We want to use our expertise to raise the quality of the whole industry. The key question is where these KOLs are and how you find them to leverage their reach?”

The company is preparing to release a new product later this year aimed at facilitating collaborations between brands or agencies and the “fragmented” army of online influencers. 

Taking the form of a searchable database, the new product aims to provide the data marketers will need to find influencers who are a good match for their brand and target audience—and make an informed judgment whether their readership data will be worth the investment.

“We have data for an estimated 50,000 independent content producers. We aim to include about 200,000 KOLs,” Zheng says.

“For each KOL, you’ll be able to see how many page-views they have every day, how many articles they posted, and how many fans and followers they have. We are preparing an automated system—somewhat similar to our programmatic buying platform, as that is like dealing with traffic in an open, liberalised ad market.”

When tides rise 

On the future of devices, Zheng says, “The question now is what will be the next wave. For the time being, we can’t yet see what the next device will be, something that could replace mobile and become the next must-have piece of tech.”

But there is change afoot already, he admits. Home media consumption is another area undergoing significant transition and change in the consumers’ lifestyle. What Zheng has noticed is that it is also having a significant impact on the approach advertisers need to adopt especially on distribution strategies.

“The home TV has become a digital TV—it’s an internet device. People are no longer limited to watching what is on cable TV, we can watch internet-sourced videos on it as well. And so the ads that they see are not limited to those coming from a traditional broadcaster.”

The company’s hdtOTV platform, which was launched last year, delivers programmatic pre-roll video ads for online media, and has proven one of the hdtMEDIA’s strongest growth areas particularly for FMCG clients.

“Today’s TVs do not deliver traditional TVCs,” he says. “Watching TV is no longer a passive activity, being broadcast on cable. TVCs are linked to videos people have actively chosen to watch—and this ad could be shown on a number of devices, not just on a TV screen. It is a completely different concept.”

Zheng also mentioned a range of other home appliances which are launching with internet capabilities. He thinks that moments of appliance usage, when consumers are not looking for advertisements, are opportunities to insert native advertising which reflect content and context. 

Another discussion he’s having at hdtMEDIA is on the advent of self-driving cars—which he sees as one of few major innovations to have impact on advertising. “Without the need to concentrate on the road, passengers will have more time to consume media and advertisements,” he says. 

hdtMEDIA’s annual innovation launches are in part in tune with the continual shifting sands of the advertising. “We are listening to the ads,” he says. “Looking at how a tech platform can add convenience when we want to connect new types of media.”