Given the turmoil in Global markets and nervousness of Brand advertisers in International markets, those of us working in China undertaking Digital Marketing (including Search Marketing) are seeing both opportunity and business threats.

Personally, I see the opportunities falling to full-service digital agencies and casual gaming firms. Although, I think that we will see a accelerated slowdown in the Digital Marketing growth in Q2 of 2009, but those agencies with strong search, web, social media and viral seeding teams are likely to benefit from continued convergence and the emergence of larger budgets heading towards these areas.

The business threats are from falling marketing budgets that push marketing companies to cut rates  in turn leading to a downward spiral of  in margins to win business. Last November at ad:tech Shanghai we heard a lot of pundits and social commentators stating that Digital Marketing would benefit from the budgets being reallocated from traditional offline budgets. However, we have yet to see this in many of the campaigns being done at SinoTech Group. After having informal discussions with people in a few Publicis companies and Universal McCann we all came to the conclusion that logically it makes sense to see Digital Marketing benefit in times of downturn where campaigns can be measured effectively and ROI is clearly determinable….. but we are dealing with people …..

These people are Marketers … mostly Marketers spending budgets in more traditional channels so when there is increased pressure on their business and their budgets they are taking a path well worn and sticking to the offline channels…. This is crazy right!! Why would they not take a leap of faith and go towards the digital channels.. sure… even try some mobile marketing and some search marketing for good measure….

That said, I do expect some agency’s to successfully draw more budget towards digital, some savvy CMO’s are also reading and being enlightened to get on this path…

The main challenge that I see in China is that Digital Marketing is seem by most as simply a media buy on a tier 1 portal. Lets put the message out that this is a narrow view and using just media buying is not going to get the most effective digital results - use multiple channels (an integrated strategy and plan). This is nothing new. Integrated marketing has been around for a long time. But building a mindset that appreciates the full spectrum of possibilities has been difficult. It’s time to change that.