WHEN tea-maker Lipton launched a mobile phone marketing campaign in China in 2008, it deployed something it knew about the Chinese market: People loved to give and receive small gifts.

To send such a gift, mobile users provided Lipton with the name, mobile number and address of friends and family. Within a month, Lipton sent messages to 162,318 mobile numbers.

More than 100,000 of the recipients confirmed their information, and Lipton sent each a teabag. With that small, clever step, Lipton got what it hoped: A low-cost marketing campaign that quickly spread its brand among young, white-collar consumers and expanded its customer database to be used for future marketing initiatives.

Lipton's not unique in going digital, of course. Companies in China and elsewhere are devoting more of their marketing budgets to digital channels including search engines, social networks and mobile phones.

China's model broadly copies that of the United States, but it offers fertile ground for testing a digital marketing approach, providing data that is rich with potential.

But regardless of the medium, marketing will always require mastering the art of winning customers - attention, loyalty and wallets.

Success in China requires an understanding of Chinese customers' needs and copying what works in the United States and elsewhere won't necessarily work.

What's more, while finding an audience to target in China may cost less in terms of time and money than in traditional channels like television, communicating a message effectively may require double the effort.

Companies are in many ways simply following their customers. Advertising revenue more than doubled year on year in 2009 at Renren.com, China's biggest social networking site, with over 150 million registered users.

One reason is the growing number of Western multinationals with headquarters in Shanghai redirecting their home strategies that target the likes of Facebook to China.

From his vantage point, Alan Yan, CEO of AdChina, a Shanghai-based digital platform that places ads with more than 400 outlets in China, sees mobile channels emerging rapidly.

Interconnected world

"The mobile ad platforms we launched this summer are expected to rake in double the amount of business generated by the online platform we launched three years ago in their first 12 months," he said.

Although online marketing has grown an average 50 percent annually over the past three years - much higher than the ad market as a whole, "we expect mobile marketing to reach 80 percent to 100 percent growth annually, including all mobile terminals such as mobile phones, iPads and Kindle."

Among these, he says mobile phone applications are growing the fastest, comprising 25 percent of all mobile traffic today.

Traditional media groups are taking such growth projections to heart. Guangzhou-based 21st Century News Group and its flagship 21st Century Business Herald newspaper, with a daily national circulation of more than 762,000, is aiming to provide advertisers with a choice of full digital content, multi-channel platforms and content that links clients and readers.

According to a white paper on customer interaction by Selligent, a Belgium-based customer relationship management services provider, 90 trillion e-mails were sent and 126 million blogs created globally in 2009. Tweets sent on Twitter rose from 5,000 a day in 2007 to more than 50 million today. There are currently more than half a million active users on Facebook.

Basics unchanged

Nonetheless, the fundamental way companies do business - spending money to make customers aware of and want their products or services - hasn't really changed, says Peter Fader, professor of marketing at Wharton.

Social networks certainly changed the mix of media they rely on, but the big picture, where the companies "shout" and customers choose to listen or not, is still the same. They can make the company shouting process much more efficient and effective, but it's still basically the same concept as it was 20, 30 or 50 years ago, says Fader, who is co-academic director of the Wharton Interactive Media Initiative research center.

"But just planting a few seeds on a social networking service and expecting word of mouth to do the rest will not bring the outcome you want," he said. "Research shows that the actual influence of the influencer on a social network is very limited. You can't just plant one seed and let it spread; you need to plant a lot of seeds. That sounds a lot like mass marketing."

Yan of AdChina notes that the marketing approaches on China's social networks are still relatively primitive, relying on, say, how many people forward posted recommendations online - rather than promoting a brand to a more precisely defined audience group.

Challenges

While previously an advertising campaign would entail a few television, radio and newspaper ads, today a message needs to be sent over many more channels - a daunting challenge for marketers.

It will at times feel like a balancing act.

"To reach today's multimedia customers, you need to cover every possible channel, and you have to 'do a little science' to figure out which combination of channels will give you the best coverage. It takes less money, but more smarts and effort," Fader said.

To deal with the challenges, companies need to join users' conversations about their products in an innovative way, and leverage social networking functions to encourage users to spread the word about their brands.

In the meantime, some companies are crafting sharp marketing strategies based around mobile phone applications. Soon, mobile services will function just like a desktop computer, Wharton's Fader said. "Everything you do from your desktop computer you'll soon be able to do over a mobile network."

"In the future, a seamless blend of traditional desktop activities and e-commerce will emerge. We are getting to the point where the two are not distinguishable from each other, except that one is big and fixed and the other is small and you can carry it with you," he said.

(Reproduced with permission from Knowledge@Wharton, http://www.knowledgeatwharton.com.cn. All rights reserved. Shanghai Daily condensed the article.)