Economy

Markets

Industries

Insights

Reports

Events

Reach out & touch some advertising

By Ma Zhenhuan (China Daily)
Updated: 2009-03-23 07:46

The US coffee company Starbucks launched a promotion early last year to give out 10,800 tickets for a Kunqu opera in Shanghai. To win a free ticket, people were required to join the Starbucks members club on its website.

Starbucks executives soon found that at in-store promotions at Starbucks outlets, less than 200 tickets were claimed in the first few weeks.

Related readings:  Ad spending up 15% to 441b yuan in 2008  New rules on foreign-invested advertising firms adopted  China's online advertising market near 11b yuan  China internet advertising to rise 50% this year

They advertised on Touchmedia, a touch-sensitive interactive LCD screen mounted in the back of the passenger seat in taxis in Shanghai. Within four weeks, all the remaining tickets were claimed and more than 43,000 customers' email addresses were collected. The campaign was a success.

The man who has made full use of computer touch technology to offer interactive advertising is Micky Fung, the Chinese-American founder and CEO of Shanghai-based Touchmedia.

Today, his interactive LCD touch screens have been installed in over 100,000 taxis in major cities like Beijing, Shanghai, Shenzhen and Guangzhou. Fung hopes that he will get taxis in another 20 second and third-tier cities nationwide to carry his LCD touch screens.

Fung's theory is that taxis provide a remarkable reach to educated Chinese in major cities. In Beijing and Shanghai, over 6 million passengers ride taxis daily, with more than 90 percent coming from upper income groups.

An average taxi ride is 18 minutes. In that 18 minutes in the taxi, Touchmedia can help them find the information they want, Fung said. He believes customers will be "delighted".

The red-framed color LCD screen is divided into three parts: video commercials, tool bars and 10 icons of advertisers. A passenger can tap the icons with their finger, and take part in lucky-draws and interactive games to win free tickets or souvenir gifts from the advertisers.

"The success of touch media is all about interactivity. You give consumers a choice, and involve them," Fung said.

This creates a dialogue between advertisers and consumers, he said, allowing viewers to choose content, such as product demonstrations, games and quizzes. All of the viewers' responses and actions are then measured, recorded and can be presented back to the advertisers, so that they can ascertain how many people saw their ads, and their consumer preferences.

According to Fung, Touchmedia's sales for 2008 increased tenfold over the previous year. Despite the sluggish domestic market, Fung says he has not seen any downturn in the last few months.

He said Touchmedia would double its investment in China in 2009 and forecast that revenues would reach some 200 million yuan.

Fung said he first got the idea from a taxi ride in Las Vegas more than a decade ago. He saw a simple LCD player showing some blurry DVD programs in the taxi.

"I got excited - why not integrate this into taxis in China?" he said.

He wanted a better product and one with a touchscreen.

A challenge to develop

It proved far more challenging than he had expected. After five years and some $30 million, he developed the first-generation of interactive touchscreen LCDs to be used in taxis.

"It was hard, but it was fun," Fung recalled of the five year R&D period. "Back then there was no such product. I couldn't just go and get it off the shelf, so we ended up having to build the unit ourselves."

The lowest point, he said, was after developing the technologies and software for the unit, they just could not get the image stabilized. Now his company is putting the final touches to the fourth-generation touchscreen LCD. Other than to say that it will enhance the passenger's interactive experience. Fung would disclose no further technological details.

In 2003, Fung founded Touchmedia in Shanghai. In the past three years, the company has grown from a 20-member advertising firm into a new media conglomerate with four offices nationwide employing 400 staff. Most are under 30 years old. Fung said the company is planning to hire 150 more people this year.

"You need to be both enthusiastic and idealistic to stay in the business of the new media," Fung said. "Most of the staff in my company are very young, but they are the ones that often come up with the most brilliant ideas, such as launching our community service programs."

Touchmedia's LCD screen in taxis offers information on the 2010 Shanghai Expo. Ma Zhenhuan

So far, Touchmedia has received over 20 patents based on their proprietary hardware and software. The company was recently listed in the high tech magazine Red Herring's Global Top 100, a first for a domestic Chinese mobile media company.

"Many people think of China as just a factory for making things developed and designed elsewhere. However, we have created all our hardware and software right here in Shanghai, which shows China can also lead the world in technological innovation," said Fung.

So what do taxi drivers think of Fung's innovation?

"Each time you press the taxi meter down, the screen is activated and a touchable interface will appear, so many people will try it out of curiosity," said Du Huaiquan, a 40-year-old taxi driver from Yuyang Lianhe Taxis in Beijing, where such touchscreens are less popular than those in Shanghai.

"I think such screens are mostly favored by young girls, because they can find a lot of fashion and clothing information, such as what's hot in town and where to buy it," said Du.

However, the driver also said sometimes his customers complain about the noise it makes, and will ask him to turn off the sound.

"Many of my customers at night, for example, when they finish drinking at the Sanlitun, will tell me that it is too loud," Du said. "Besides, I think such screens should provide more useful service information, or news programs in addition to video commercials."

Fung said he and his colleagues are well aware of the problems. The new generation touchscreens now allow users to turn off the sound. Besides, Fung said, his company has been working hard to increase the proportion of useful and community-related information.

Last year, 15 percent of all the materials inputted in the touchscreens were related to community-services, Fung said. During the Beijing Olympics last year, the screens in Beijing's taxis carried Olympics-related information, interactive games and news. He also sponsored a four-month 2010 Shanghai Expo promotional campaign from July to September last year, and over 30 million viewers registered for the promotional materials.

"We also have programs on education, on helping under-privileged children, on ecology, and on community help and safety," Fung said.

"We are also very proud to work with the Shanghai Expo, and 10 million people will have access to the expo information each month," he added.

Micky Fung and his family have been doing business in China for decades, including running a taxi company in Tianjin.

Fung began his ventures on the mainland with Milanese, a women's clothing company. He was CEO of the company from 1982-94.

After that, he was development director of his family-owned business, HSR group, which runs residential and commercial building projects in New York and surrounding areas.