Eight key trends driving consumers in China in 2016

China is a fast-changing market and strategies to get ahead and sustain a competitive advantage is a great concern for brands in this highly competitive market. ZenithOptimedia’s latest report sheds some light on the key trends for China market in 2016, helping marketers to cut through the clutter.

Advertising to the Artificial Intelligentsia
AI algorithms are bound to play a bigger role in consumers’ decisions. It will influence the information we have access to by filtering it for us, and will require brands to index their data in ways that are easily searchable and representable by these algorithms. We may also see media formats targeted not at human beings, but to add unprompted information for AIs crawling the web for us.

Another side of intelligent algorithms is the fast development of machine learning for business planning and consumer segmentation. We have firmly entered the stage where computational learning is building self optimising algorithms to learn and make predictions on data. How these learnings can be validated as predictive models on time scales that make them truly valuable will be the challenge.

The cost of data breaks a few banks
The growth of programmatic buying has put more emphasis on data collection and analysis. In 2016, data will probably be more available, but not necessarily more accessible. Data is often behind pay-walled gardens owned by the data giants. Major advertisers and agency networks are increasingly partnering with digital data giants from Baidu, Tencent and Alibaba.

To fully realise its potential, data needs vast amounts of indexed and tagged data points, often stacking multiple databases. Brands will require scales and security systems to protect the data that come at a substantial cost. What will define the winners is not just the ability to think strategically about it, but the tactical ability to deliver on it.

Paying for content is the new black
Although subscription models are fairly common in some markets, Chinese consumers have a fairly extensive tendency to favor free things. But this only works when there is something else paying for it – and it often is advertising. As the use of ad-blocking grows and publishers are faced with ongoing pressures to monetise inflationary pieces of content, China might finally get to a stage where a big enough pool of consumers is ready to pay for the content they consume.

Advertisers should see further pushes towards tailored partnerships, whether in the form of sponsorships, product placement and even co-productions. As premium shows could increasingly slide behind paywalls, the pre-roll industry could slowly but surely shift towards more programmatic practices, chasing audiences in more show agnostic manners.

Virtual reality becomes a lot more real
2016 will see the consumer launch of mass produced high quality headsets such as Oculus and Morpheus, opening the chance for not only better content but also new distribution channels. For brands, the main chance to use it will remain content, either interactive or video based. Only the brands fully embracing the experience will be able to stand out.

Frictionless is more
Consumers are looking for something that is “easy to use” and they will have increasingly less patience for bespoke methods of interaction and identification. Consumers do not have the patience to figure out your systems, making it essential for you to plug into theirs. In such a wide landscape, complexity comes with a cost, and the question will not just be which partners have the least expensive systems, but which ones are the easiest to use.

A picture is worth a thousand keywords
In 2015, digital giants have made big steps towards making image based search a reality, both in the US and China, with the likes of Google and Baidu claiming error rates under 5%. Next year, we’re expecting this new way of discovering products to impact brands and advertising. It will push even further offline to online consumer journeys and strengthen the chance for smaller brands to be discovered.

Image search will also open search functionalities beyond the search engines and e-commerce juggernauts. As for real-time image search, it wouldn’t be surprising if in the near future phone manufacturers offer the chance to combine image search and augmented reality to see results directly from your camera feed.

Time is up for impressions
For over 20 years, we’ve been buying digital display based on impressions. In 2015, we’ve finally seen an effort to transform impressions into genuine opportunities to see (OTS). We start buying not the impression, but the time it is possibly viewable by someone. The trend has already started in the US, where some premium publishers offer formats on a cost per second basis.

We are also seeing new mobile solutions applying the concept of Trueview ads to display, letting users slide away from advertisement as they scroll content, and only charging you for the seconds you have been in sight (and incentivising better advertising in the process).

The beginning of the end for digital
Voices calling for the death of digital specialisms are getting louder. We hope to see the industry finally taking serious steps to erase the ever abstract distinction between digital and traditional media. In 2016, integrating digital and traditional might not be as much a trend of the future as separating them will be seen as a sign of the past.

For brands this means we are going to see some strong challenges for talent development and recruitment, while we should see more efforts to use simplified KPI frameworks to measure campaigns.