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Why are advertisers holding back on mobile in China?

Why are advertisers holding back on mobile in China?


China has become the first country in the globe to have more than 1 billion mobile phone subscribers. Around 74 percent of the Chinese population owns a mobile phone. Meanwhile, China has 356 million mobile internet users, according to the China Internet Network Information Center (CNNIC), and 69% of total internet users use their mobile devices to access the internet. It is logical to assume that mobile will soon usurp the desktop as the dominant digital ad platform as well.

“When you look at the amount of time that consumers spend on their mobile devices globally, and you look at the way that marketers are allocating budgets, there’s a significant gap between the amount of money being spent against the mobile channel and other channels in the marketing mix,” Patrick Moorhead, VP of mobile sales at Catalina Marketing, said on “Thoughtful China,” an online marketing-affairs talk show produced in Shanghai.

Why are advertisers holding back on mobile? Here are some valid reasons provided by advertisers:

  • Download speeds in China can be slow and third-party data tracking and analysis services don’t exist.
  • Chinese own about 300 million smart phones, but fewer than 100 million have access to 3G subscription packages. Downloading big mobile apps, videos and other rich content through WiFi is slow and tedious, and lacks the sense of spontaneity that makes using phones fun.
  • The industry currently has somewhat of a monetization problem: The mobile ad industry does face important challenges as it works to close the gap with “eyeball time.” eCPMS are sometimes as low as 20% of their desktop counterparts. 40% of clicks are either fraudulent or accidental, and targeting has proven difficult due to developer attitudes and fragmented standards and protocols that enable relatively seamless ad delivery and measurement on PCs.

But, there is massive opportunity on the horizon: more mobile users will come online in the next few years in China. Brands seem to be platform agnostic, advertisers are very excited about CTRs and the opportunity on tablets, and the industry is gradually streamlining and becoming more technically adept, which will lead to more brands jumping in. Innovation in areas like targeting and analytics is crucial. Smart advertisers should learn to create a super cocktail of location-based services, shopper marketing and mobile advertising.

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