China has a unique online television (OTV) content ecosystem unlike any other market in the world. Nearly all branded content (both foreign and domestic) is available online through multiple OTV platforms, such as Youku Tudou, iQiyi, Sohu, and Tencent.
Youku, China’s equivalent to YouTube, is by far largest video-sharing site in the country, reaching over 500 million monthly unique visitors. Due to YouTube’s inaccessibility on the Mainland, Youku has been the main video hosting service in China for some time.
Youku Tudou Inc. operates two of the most popular video sharing websites in China, Youku.com and Tudou.com. Content on the platforms includes full-length movies, television shows, sporting events, current events, and other user generated content (UGC).
Users access most content for free and the company monetizes user traffic through video and other forms of online advertising. As of 2013, the company had approximately 5,900 movies, 2,200 television shows, and 800 variety shows in its content library.
Youku homepage on laptop
Youku Tudou’s Brand Advertising business provides advertising services to clients seeking exposure to its audience. One seemingly common objective of brand advertising is pursuing as large a reach (or audience) as possible.
Brand advertising builds awareness with a consumer, and differs from other forms of advertising which focus on eliciting a consumer response, such as making a sale, for example.
Since Youku’s merger with Tudou back in 2012, the platform has expanded and is now the biggest online video site in China with more than 450 million users.
According to Youku’s 2013 financial report, 89% of its revenue comes from selling ads. In 2013 the company started monetizing the significant growth in mobile traffic.
A case can be made that online video viewing habits are moving away from desktop or laptop and onto platforms such as tablets and smartphones. By the end of 2012 daily mobile video views exceeded 100 million.
Youku homepage on iPad
This year daily mobile video views have surpassed 400 million. 25% of Youku traffic is now mobile. Revenue earned from mobile sources has passed 30% of Youku Tudou’s total sales to date.
According to CNNIC by July 2014 Chinese internet users spent on average 25.9 hours online per week, up from about 13 hours in 2003.
In August this year, with monthly browsing time of 775.515 million hours, Youku ranked top among Chinese online video providers, followed by iQiyi and Letv.
Online video has created unique features available to internet advertisers such as audience targeting and detailed analytics.
Internet advertisers can measure more than just audience reach through engagement metrics like time spent viewing a page and frequency of return visits. This allows marketers to show targeted ads or other location-relevant content.
In terms of analytics, marketers are beginning to offer insight into viewer demographics and other metrics, information that is extremely valuable for online marketing efforts.
Although it’s easy to use YouTube as a comparison with Youku, advertising on Youku is significantly different in many respects. Advertising options on Youku are in some ways more versatile and creative.
Video ads can be shown before, during, or after video content, and there are also pause ads (while video playback is paused).
Youku pre-roll ads are the ads that are displayed before the start of a video and that can’t be skipped.
Then there are mid-roll and post-roll ads that are displayed during certain times of the video at or at the end of it. These are similar to TV commercials.
Youku pause ads are the ads that are displayed whenever a video is paused. These ads stay on until playback is resumed.
These types of ads are usually static, but can be quite effective because if a video is paused several times then the viewer will see it every time. This increases the impression rate for the same user.
Banner ads can be displayed at the top, the middle or at the bottom of a page, as well as on the right panel’s top or bottom.
To get to middle banner ads the user has to scroll down the page, so these are cheaper than the top banner ads. The cheapest, relatively speaking, are the bottom banners that a user won’t see until they scroll all the way to the bottom.
Youku Tudou’s Brand Advertising business works on a device agnostic policy. The idea is to have a multiscreen experience where users can switch from one device to another seamlessly.
For example, a user could start by watching content at home on a laptop and then switch to a smartphone when taking the metro or bus to work. In the afternoon they may choose to use a tablet while having lunch and then use a desktop when at home in the evening.
The goal for multiscreen advertising is to engage users on the best available device at the most convenient time of day. As we move towards the end of 2014 multiscreen is the main way that Youku Tudou intend to sell advertising.
For advertisers, the multiscreen advertising bundle seems like an attractive option. This is because it increases exposure to ads at the same time as closing the gap between seeing an ad and making a purchase decision.
Someone on the way to go shopping who is watching a TV episode may respond more strongly to an ad that they just saw compared to an advert they watched a few days earlier.
Prices for video ads can be affected by several factors including target geography, ad length, and screen size of the ad. For example, Beijing and Shanghai ads are more expensive than those for lower tier cities.
A 30 second ad costs more than a 15 second ad, and a ‘full screen’ ad costs more than one occupying less of a users’ display. The cost of an advert is based on a display basis (cost per mille, CPM) as well as time basis (per day or per week).
Generally speaking banner ads are priced similarly and are affected by location on the page and ad size. Banner ads that are in a prominent position on the main Youku website will cost more than those lower on the page. Larger animated banner ads will cost more than a small text ad.
The number of Chinese users accessing online video has been growing about 18% per year from 2008-2013. There is a big opportunity for advertisers to tap into a vast pool of consumers that regularly watch video online on many different devices.
Although there is no shortage of television channels in China, programming choices are quite the opposite. This is perhaps why more and more Chinese internet users are watching video online.
This gives advertisers in China a unique opportunity to raise awareness of their brands to a massive captive audience. Whether it be on desktop, laptop or mobile, using Youku video ads is a great way to expose your brand to the Chinese market.
Cover image courtesy of china-screen-news.com
Do you think these types of video platforms are effective for advertising? Leave a comment to get the conversation started