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New online tactics target consumers

PINKY Ye spends several hours a day on the multiplayer online role-playing game Aion every day.

The 25-year-old office lady was therefore understandably delighted when Aion heroes began gracing the packaging of Coca-Cola Zero, one of her favorite beverages.

The coupling of an online game and a popular soft drink is the result of a marketing agreement between Shanghai-based Shanda Entertainment, the game operator of Aion, and Coca-Cola.

"The logic is simple," said Shanda Chief Executive Li Yu. "We have the same target user group: young people."

Coca-Cola, Intel, Nike, Unilever and other consumer-products companies are turning more frequently to the Internet to promote their brands and products in China, a country with more than 300 million Internet users.

The Internet provides companies an ideal platform for a high-tech version of "word of mouth" advertising. It fosters interactive contacts among consumers and between those who make products and those who use them. Unlike spot advertising, it can operate on a 24-7 basis.

Engaging consumers online has emerged as a strong marketing trend during the economic slowdown as companies desperately seek to preserve or even increase market share.

Such online spending will continue to surge globally despite the financial crisis, according to WPP, the world's No. 2 advertising and communications group.

Global advertising spending is forecast to drop by 4.5 percent, while online advertising is expected to grow 7 percent, Mark Read, WPP's strategy director, said during the 2009 Effective Online Marketing Forum held by Tencent last week.

Tencent, through its QQ software, is China's biggest online instant messaging service provider.

"For online marketing, the financial crisis is undoubtedly both a severe challenge and an unprecedented opportunity," said Lau Seng Yee, Tencent's executive vice president. "Its advantages are just what enterprises need during an economic downturn."

"The point is to try to attract Netizens to our products from in front of computer screens," said Nicolas Zurstrassen, Nike China's market director.

Chinese firms such as Li Ning, a leading domestic producer of sportswear, have been quick to seize on the trend of connecting with consumers online.

Online community

The Website - which translates as "slumping economy" - was launched last November. The site provides an online community for white collar workers and college students to express concerns arising from the economic downturn. Discussions on the site mainly center on individual problems, ranging from employment and marriage to training opportunities., a name that sounds like "love my China" in Mandarin, came online a month after Its founder Cheng Liang said he was thinking about a business model to support and came up with the idea of introducing domestic brands to Internet users.

The front page of features voting for "classical and nostalgic brands."

The site is also asking users to nominate products for their top 20 list of most cost-effective domestic brands.

Members who sign up on the Website and give their addresses receive free products ranging from moisturizing cream to cleansers. Members are also asked to give feedback on products.

It's become fashionable nowadays for white collar workers in their 20s and 30s to discuss domestic brands. They often spend a lot of time online discussing their experiences with China-made products.

"The advice provided by these users gives manufacturers first-hand feedback," Cheng told Shanghai Daily.

Many classic Chinese domestic brands have gradually faded into obscurity, especially among a new generation of consumers who spend most of their leisure time online and have become familiar with foreign brands as a result of heavy advertising campaigns.

"The Website is a fortuitous tool because the economic downturn provides a good opportunity for domestic brands to prove their worth," Cheng said.

Banner advertising

Traditional banner advertising still occupies the biggest role in online advertising. The market volume for graphics advertising in China in 2008 reached 8.04 billion yuan (US$1.18 billion), comprising 47 percent of the whole market.

Total revenue for online advertising reached 17 billion yuan in the past year, according to an iResearch Inc report in February.

Firms like CIC Data and PR Newswire have provided such services by collecting feedback from consumers and monitoring the online community. The firms then let manufacturers know how their products are being discussed. PR Newswire hasn't kicked off services in China yet.

"We have to know what consumers are thinking and catch trends early," said Song Jianhong, brand director of Unilever's ice cream division.

Marketing by providing users with products and asking them to comment works only if you have good quality products and honest responses from consumers, according to iResearch, a Shanghai-based IT consulting firm.

"Promoting products by word of mouth through interactive discussion has to be tied to a company's long-term marketing strategy," iResearch said.

Online gamers, who number at about 100 million in China, are immune to more traditional media because many of them seldom read newspapers or watch TV.

The market revenue for advertisement appearing in games will jump to 1 billion yuan in 2011, according to iResearch.

Coca-Cola will tap all channels to penetrate the market, tuning itself to the preferences of young people, according to the company.

"I drink Zero to keep fit and it's nice to see my favorite drink tied in with my favorite game," said Ye.


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