Skeptics have doubted the appeal of “old-school” video-streaming platforms to luxury brands and predict that the future of luxury brands’ marketing lies in live-streaming, smartphone-based micro-film apps such as Meipai, and other innovative social media forms. But recent research suggests that online video-streaming platforms are still favored by many luxury brands. Meanwhile, pre-roll ads remain the mainstay of online advertising strategy in the Chinese market. Given that video-streaming has proven it has staying power, here are some best practices for luxury brands marketing on video platforms in China.
Chinese Internet users love watching videos online. By July 2016, the overall monthly active users of Chinese video-streaming mobile applications exceeded 800 million. As we wrote in a previous article, many of these video-streaming viewers actively seek out commercials as long as they are creative.
Luxury brands such as Cartier, Chanel and Louis Vuitton began investing in this platform since its early days. The main tip for making pre-roll ads and managing dedicated channels for luxury brands is simple: content is king.
The fashion powerhouse Louis Vuitton was one of the first to experiment with Youku, launching video ads in 2009 followed by a full brand channel in 2010. Burberry, the British luxury fashion brand, has also included video-streaming platforms in its marketing strategies in China, uploading promotional videos and live-streaming its fashion shows on platforms such as Youku to reach Chinese consumers.
Product placement is one of the most frequently used marketing strategies for luxury brands, which have had a lot of success, in recent years, placing products in Chinese movies and television shows.
For example, Ode to Joy, a hit television drama series about five young women making it in Shanghai, one of China’s most developed cities, attracted over 50 advertisers including Givenchy, SK-II, Chow Tai Fook and many other luxury brands.
Tiny Times, a film series based on the novels of China’s wealthiest writer Guo Jingming—which make luxury items such as Hermès Birkin bags, Celine jackets and Ferragamo cocktail dresses an integral part of the movie—is an example of successful product placement, despite poor reviews from Chinese critics who called the movies “shallow” and “materialistic.”
The films broke Chinese box office records multiple times and demonstrated an incredible ability to boost the sales of luxury goods such as champagne.
Feeding the curiosity of average audiences, fashion bloggers wrote volumes explaining each brand spotted in the films, which further boosted the exposure of luxury brands.
Meanwhile, Chinese mainstream video-streaming sites have invested a lot in producing original online shows in recent years, many of which target Chinese youth and are able to reach a larger audience than traditional television shows and movies. It’s an opportunity luxury brands should keep an eye out for.
This is not to suggest product placement is an easy choice or a guaranteed success. For luxury brands in particular, setting is something that needs to be handled with care.
"The worst thing that can happen is that the audience feels like it is watching a commercial," said Leeza-Maria el Khazen, the founder of Lynx Productions, a branding and business development firm. "It can have a very negative effect on the film and the brand because it draws the audience out of the movie. Sometimes it's kind of shocking."
The most recent marketing success with respect to online shows for luxury brands perhaps goes to Supreme, a New York-based skateboarding and clothing brand that has won the hearts of many celebrities. In The Rap of China, a Chinese rap reality show produced by online video platform iQiyi that has attracted over 2.5 billion views, celebrity judge Kris Wu has been wearing Supreme outfits since the first episode in June 2017.
Even though the brand did not ask to be in the show or pay for this inadvertent product promotion, its frequent appearance in the show has shot the brand to stardom in China. Other luxury brands that have appeared on the show, including Yeezy, Gucci and Off-White, have also experienced a huge spike in interest on the Chinese-speaking internet, not just in how much these items cost but also in the culture and story behind the brands.
According to the entertainment research company EntGroup, if product placement fits with the setting in a show, more than 66 percent of the viewers won’t mind watching the ads. Understanding what shows best match with the value of a brand can help build loyalty and appreciation among consumers.