Will Nike become the first brand to unleash China's true digital potential?

The number of people with online access in China has in the past several years been increasing in increments of several million per week.

But, as far as China is concerned, there is a much more significant digital number to consider. Figures from GroupM show that internet media spend in 2009 is expected to rise fractionally year-on-year to take an eight per cent share of total spend, up from 7.1 per cent in 2008. Growth for other digital media platforms has been flat the past three years. Online is still the fastest growing media platform in China, but at present rates, it will be some time before it can claim a significant share of the adspend pie.

The fact remains that marketers are reluctant to put their money behind digital, regardless of how many consumers are moving online. Brands in China are still hooked on TV, and with good reason. TV can deliver national exposure through a single, mass communications channel (CCTV) as well as a more localised reach across the various provincial channels.
And with TV prices continuing to rise, there is generally little in companies’ ad budgets available to divert the way of digital

A tipping point - if one even exists - appears distant. A more standard - and transparent - system of measurement would help, as would more sophisticated ways to engage brands with the online audience. But what could really speed up the process is a pioneering brand that is willing to take a calculated risk with digital, similar to what Mountain Dew has done in the US. Step forward Nike. In 2009, Nike placed 34.5 per cent of its China media spend in digital, compared to just 6.2 per cent in 2007. Over that same period, the amount it invested in TV shrunk from 47.7 per cent to 17.5 per cent. Nike is not alone. Rival adidas also cut back significantly on its ATL communications in China after the 2008 Olympics, focusing more on digital.

Of course, Nike - like adidas - is a brand whose core values fit well with those of the supposed online demographic, and what works for sports brand may not be good for a more functional FMCG brand. And, for both Nike and adidas, digital is still a work in progress. It is still too early to see how their new spend strategies will impact the bottom line. But the fact that such high profile global brands are taking the digital plunge in China could - if successful - pave the path for others to follow and finally give marketers something more tangible than a collection of click-through acronymns to bring into their budget meetings.

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This article was originally published in the 25 March 2010 issue of Media.