It’s early days for audience-based media buying in China, but e-commerce spending is already huge and has the potential to outstrip the U.S. by 2015, per Forrester (paid report).
To prepare for this future Publicis Groupe has acquired 12-year-old digital marketer Longtuo (release). The Beijing-based firm serves the e-retail needs of marketers like 360buy, Kohler, and Yves Rocher, as well as e-commerce brands Masamaso and Taobao. Longtuo will be aligned internally with Razorfish, whose regional clients include Converse, Hertz, and GM Onstar, more than doubling Razorfish’s headcount in the country from 130 to 330. Outside Beijing, Longtuo has offices in Shanghai and Guangzhou.
Speaking with AdExchanger today, Razorfish chief media officer Jeff Lanctot said the move supports two strategic imperatives for his agency – strength in China and e-commerce capabilities.
He suggested Longtuo is more platform- than services-focused. Here in the U.S., that might suggest an untapped opportunity, since domestic e-commerce marketers were among the earliest movers in data-driven display ads and today are among the largest online advertisers. Is a similar pattern unfolding in China, and can Razorfish leverage its media expertise to ramp up Longtuo’s services business?
Lanctot's response: “For any emerging market there’s an opportunity to take best practices from around the globe and try to apply them. You can’t overlook the cultural differences as well. How do people shop? How are they influenced – is it offline or online? The cultural piece, be it china or other countries, is as important as taking best practices from the U.S. or around the globe.”
There’s also the fact that China’s online ad maturity - including in targeted display - is nascent by U.S. standards.
“We’re watching it closely, working with a lot of different companies, testing the models,” Lanctot said. “But it still feels very early days. We feel the media business is going to evolve quickly over next several years.”
By Zach Rodgers