Large companies are only spending a fraction of their marketing budget on digital initiatives, while most of the Chinese consumers can be found behind their computer screen or on their mobile, says Shaun Rein in an article describing three major consumer trends for Forbes. “Through the first nine months of 2009, China’s 380 million netizens spent $25 billion online, twice as much as a year before.”
The article is based on 5,000 interview in 15 cities by his research firm, the China Marketing Research Group.
In China, most multinationals only spend 2% to 3% of their marketing budgets on digital initiatives; 8% to 12% is typical in the U.S. This makes no sense, for Chinese spend relatively more time online than with other media like TV or print, compared with American consumers. Logically, brand managers should spend much more online.
Why don’t they already? Part of the blame lies with their advisers. Most advertising agencies have limited digital marketing capabilities and relegate their online campaigns to junior people. They also prefer to work with television and sporting events, where there is more money and more personal visibility for them. Moreover, media buyers in China prefer to spend your money where it benefits preexisting relationships of theirs, or where they can get preferential treatment such as rebates.
More in Forbes with also analysis on Chinese and foreign brands in China: “Are you scared of the Made in China label? So am I. So are most Chinese.”