By Yann Lombard-Platet
I have often been asked why we started a digital agency in China and why even through the years of the bubble burst we kept going. Well, here are five reasons why being a digital agency in China is great.

5. The Fastest Growing Media in China
Digital in general is encompassing more and more aspects like mobile phones, PDAs, and Interactive TV. Internet and the digital channels are the fastest growing media around the world and have become the fastest growing media in China.

2008 will be the year China overtakes the US as the world's largest Internet market. This is hardly surprising. The state of Internet development in China is quite extraordinary. By the end of 2007, there was an increase of 73 million users at an annual growth rate of 53.3%. With only 16% of people online, the Internet penetration is still low compared with a world average of 19%. What is even more amazing is that the Chinese are already spending 16.2 hours a week on the Internet, more than in the United States.

The Chinese Internet population continues to grow by over 30% annually and it is estimated that by 2012, it will reach over 373 million, more than the entire US population. Broadband netizens reached 163 million by December 2007 and is the basis for the rapid expansion and development for the various Internet applications. To top it, a quarter of the total netizens access the Internet via their mobile phones. The numbers are staggering!

4. Extremely qualified target audience
The fourth reason is relevant to our clients who are trying to reach the current and future affluent audience. The target audience is online and is getting more and more active.
Most of the Chinese Internet audience is educated. The current male female split (57.2% and 42.8%, respectively) is not far from the actual population split. 70% of China's Internet audience live in cities and are under 30 years old. This is increasingly the most targetable audience. This is where most effort and money should be concentrating on right now.

3. Recognition and Advertising spending on the rise
Although a large part of the digital marketer's targeted audience is online, there is still an amazing imbalance of where funds are being allocated when it comes to advertising or marketing dollars. Only 2% of the marketing budget is spent online. There is also a misunderstanding of which online media to use. Usually out of the 2% of the online marketing budget, 60% of it is spent on portals like the Sohu, Yahoo, and QQ of this world. The accumulated audience of these portals only achieves 35% or 40% viewership or participation of Internet users. This shows that there is some misconception, misunderstanding or maybe fear about where these marketers should spend their money.

However, it does show there is recognition that advertising online should happen and the good news is that it's growing. In general, Internet advertising grows over 60% year on year. This is the fastest advertising channel growth in China.

2. Addresses the entire customer lifecycle
This reason is usually forgotten by agencies and marketers, alike. Everyone is talking about touch points. Suddenly the Internet has become another touch point. What is even more interesting is when you look at the consumer life cycle.

This is usually discussed, analyzed and used in most marketing plans. A marketer tries to go through four steps in a consumer cycle but few are aware of the different options for the online consumers. The marketer wants the consumer to 1) start being aware of his brand; 2) educate the consumer about the brand; 3) generate an intention to purchase or actual purchase. Once this has happened, the race goes on for 4) loyalty. In the digital world there are now new tools, new channels and opportunities to add value to these stages.

For awareness, we have online advertising but online advertising is being passed over. The current phenomenon of social media such as Forums, Blogs, BBS and Word of Mouth (WOM) is increasingly playing an important role in this area. Few brands understand this.

A brandsite can educate but generating regular online interactions, being present in forums, in blogs and getting the word out are essential elements of an education. Again this is usually overlooked.

Many marketers still consider purchase happen offline. This is no longer true. Increasingly, the Internet is becoming an important channel in generating a purchase online and off-line. Online stores, promotions or coupons through online promotions, newsletters or eCRM play an important part in encouraging and generating purchases.

Regular communication reinforces an emotional aspect in the consumer life cycle. The digital channel can offer more opportunities to create loyalty at a fraction of the cost of any other traditional vehicle. For this the 7th reason may be the most important.

Today, most if not the entire consumer life cycle is addressable for the majority of categories online.

1. Media everywhere
There used to be a time when understanding the client needs was quite simple. A lot of agencies have good ideas and good media planning adapted to each of them but there were so few channels of communications. Right now the media channels are everywhere.

A lot of customers have understood that the Internet is not just one media but a lot of different media. Television is just one media. Magazine is just one media. On the Internet you have TV-like media, magazine-like media, shops or in-stores-like media and many more. What used to take place offline with all the different media channels is now being replicated online.

The online world is becoming much more complicated. An approach on a digital channel is much more complex than the traditional offline approach. This complexity came more from the initiative of the consumers than from marketers. They created this landscape by asking for these media to be available. Consumers have more and more pull behavior so it's not so much about pushing your brand out there or simply having the brand everywhere.

It is the consumers who lead the way. They have their own strategies to maximize their value, their recognition, their happiness, their rewards at exactly what we called the 'point of need'. The 'point of need' is basically a conjunction of the place and the moment where the consumer is having a pull behavior versus the traditional thinking where the brand wants to try to push something to the consumer at that time

About the author:
Yann Lombard-Platet is president of Nurun Asia and was previously CEO of the Shanghai-based interactive marketing agency he co-founded in 1998. During his years as head of China Interactive, Yann engaged in many leading interactive marketing campaigns for international clients established in China, such as Olay, Vidal Sassoon, Pantene, Colgate, Pernod-Ricard, FAW-VW and Pierre Fabre.

Nurun China is part of the global Nurun Inc. with offices in Canada, US, France, Italy, Spain, and China. Nurun Inc., founded in 1985 is the world's second independent Interactive Agency with 12 offices in 6 countries. It is also well established as No.1 in Canada, No. 2 in Europe and in the top 15 in the US, with over 800 employees worldwide .Nurun Inc. is a subsidiary of Quebecor Media Inc. Website: www.nurun.com

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