China Is the Next Boom Market for Connected TV Advertising and Over the Top Marketing CTV and OTT know no borders. Having become a leading trend in the U.S. and Europe, it's poised to transform the Asia-Pacific region as well, starting with China.
By Daniel Elad
Opinions expressed by Entrepreneur contributors are their own.
Connected TV (CTV) viewership is well on its way to setting new records. It has been snowballing within the last few years, and Covid-19 has boosted its gains substantially. But while the general trend of CTV consumption is up, up, up, different markets around the world show variations on that trend.
For instance, the number of CTV-plugged households in the U.S. is estimated to be around 121 million, representing an audience of 183.5 million users in aggregate as of 2020. At the same time, in Europe, the Middle East and Africa's (EMEA) five biggest markets, the tally is just 61.5 million. That said, CTV penetration across the region is expected to accelerate by leaps and bounds in 2021. For now, the UK holds the top spot among the EMEA's top five CTV viewing countries, with 60% of people across the country consuming CTV-delivered content.
Meanwhile, the Asia-Pacific (APAC) region may still be in its infancy, but it already has the upper hand in CTV ad-spend growth compared to the U.S. and EMEA over the past year, having a 34% share against 20% and 21%, respectively. APAC is growing fast and has a sophisticated CTV landscape, especially when taking China into consideration.
Related: OTT Platforms: A Dynamic Consumer Behavior Requires Dynamic Media Buying
Mass video consumption in China
First things first: In China, most video content consumption happens on mobile platforms, meaning that over-the-top (OTT) advertising is the standard-bearer. China is also the birthplace of the sensational TikTok app, which is an A-class channel for advertisers globally, as well as WeChat, a messenger focused on the domestic market, but still available for advertising as it provides brands with great reach.
There is another prominent pair of platforms in China that marketers use for promotion:s
Weibo is the biggest microblogging service in China with 500-million-plus monthly active users (MAU). That is roughly one-third of the whole population of the country. At this point, it's a perfect platform for running viral marketing for brands.
Youku is the Chinese analog of YouTube. Unlike YouTube, where a user in some cases can skip ad, on Youku, you have to watch the whole 60-second ad before getting access to your desired video content. Yes, there is a "Skip" button, but clicking on it will direct you to the Free Ads Purchase Menu, meaning that de facto ads are unskippable unless you pay. While this intrusive advertising strategy can be annoying to users, it still serves as an exceptionally efficient technique for improving brand awareness.
Traditional TV vs. CTV in China
Today, traditional TV is relegated to a very basic role in China. You can see TVs in shopping malls, cafes, restaurants and so on, playing in the background. This constant background hum means that passerby viewers are unlikely to be a target audience for advertisers.
As for living-room television, people in China are definitely cord-cutters. They consume CTV and most prefer the advertising-based video on demand (AVOD model). Interestingly, it's not because they can't afford subscription video on demand (SVOD) (China hasn't been a poor country in a while), but due to having a higher tolerance for information overloads than Western cultures.
If you were to tune in to your favorite drama on television in China, you'll see a very unusual sort of advertising — running chyrons, similar to those you can see during news programs. This is not a market where "banner-blindness" syndrome has a chance. Brands should feel confident in being bold and brash, as a patient prospect will still be able to spot that ad from among dozens of competitors.
Targeting and privacy
As they say, "Big Brother is watching." In China, every single person using the internet is constantly monitored by a system that would make Orwell blush. And while this does allow for pinpoint micro-targeting, it's also considered deeply invasive by other countries where user privacy is sacred.
Local network areas allow advertisers to target users with the utmost accuracy (unless you are virtual private network-modified), as all the data from their devices is being constantly collected. At this point, marketers can feel sure that their ad spendings on targeting will deliver excellent dividends to them.
Related: How Covid-19 Increased Viewer's Appetite for OTT Content
For brands, the APAC market is gold, but it requires careful study before entering, as it has a lot of ins and outs. China offers incredible traffic for marketers, via both CTV and OTT channels, and each has its own advantages. While mobile apps bring far-reaching brand-awareness effects due to mandatory ad views, CTV consumption is far more message-oriented. Such programmatic capacities and consumption habits across APAC can be deemed as a harbinger of the upcoming avalanche of advertisers and publishers seeking lucrative return on investment. Time will tell if these opportunities pan out.
