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Powerpoint for speech at Adtech Beijing on Online Communities in China October 16th 2007
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October 2007October 2007
ONLINE COMMUNITIESCrossing the chasm
WILLIAM BAO BEAN
SOFTBANK CHINA & INDIA HOLDINGS
WILLIAM BAO BEAN
SOFTBANK CHINA & INDIA HOLDINGS
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China advertising revenues US$25.8bn in 2007
TV
Outdoor
Radio
Others
Out-of-home displays
Wireless
Cable
SearchInternet
Magazines
Newspaper
Internet and Search only 4.3% of total “publisher” intakeNote: Excludes agency fees
Source: SBCI, GroupM, Company reports, National Bureau of Statistics of China, Zenith Optimedia
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-
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
1,600.0
1,800.0
2,000.0
2002 2003 2004 2005 2006 2007F 2008F
Online advertising Search
China Internet advertising and search revenues
Units: US$ millions
Note: Excludes agency fees
Source: SBCI, Company reports
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Opportunity: Communities
69% of Chinese youth use social networking sites Only children of only children Chinese youth have 37 “net” friends vs 18 in the US
Source: Microsoft/MTV Circuits of Cool Project 2006/2007 (Millward Brown Sadek Wynberg OTX)
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10
20
30
40
50
60
70
80
90
US China
Close friends Friends, but not close Online friends, never met in person
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Online communities are where its at…where are the advertisers?
Source: SBCI, Company reports
Online advertising spend in 2007 will hit US$1.17bn
Online communities capture <5%
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Opportunity: Music
57% only download/listen to music online vs 32% in US 72% have played music on an MP3 in the past month 39% have downloaded and saved a song to their phone in
the past month 63% have illegally downloaded music in the past month Only 6% listen to music on the radio vs 20% in Asia Only 8% watch music videos on TV vs 19% in Asia
Ad supported music in its infancy but growing fast
Source: MTV 15-35 year old urban youth April 2007 (Synovate)
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Opportunity: Games
Online gaming spend in 2007 will hit US$1.28bn China has 40m gamers, only 21m of whom pay 81% between 18-30 years old, female players on the rise 71% have high school education with 27% holding BAs Gamers’ favorite promotions include 57% for free trials,
50% in-game treasure hunts and 42% game master gifts 64% of gamers play free games
Ad supported gaming gaining traction
IDC, CGPA 2007
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Opportunity: Video
Youth in China spends time differently than the US TV content in China not compelling… …and the most compelling “voting” shows taken off of
during prime time Ad supported video in its infancy but growing fast
Source: Microsoft/MTV Circuits of Cool Project 2006/2007 (Millward Brown Sadek Wynberg OTX)
US ChinaRarely if ever switch off my PC 29% 28%Watch video clips online 18% 33%Watch full length video shows 15% 27%Turn on the TV to watch a specific show 45% 30%
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Video case study: Tudou
Tudou has 47% share of the China online video market Tudou sees 15bn minutes per month vs 3.5bn for
YouTube Tudou’s average session is 40 minutes vs 15-20 for
YouTube Tudou sees 4m unique visitors per day Tudou launching advertising platoform
20 major advertisers Frame and “barn doors”
Source: Company reports, Hitwise
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Crossing the chasm and doing it profitably
Advertisers want: Reach customers where they are, not just through TV Avoid expensive Olympic TV ads Control ad timing, location, context, format, pricing model Coordinated campaigns across media and measurable results
Agencies want: To become one stop shops for online services Offer search while still making a cut
Publishers want: Monetize unsold inventory Raise pricing Avoid cannibalizing CPD sales Protect users from bad advertising
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