Reason #472 Why Advertising is a Bad Investment in China

Grand Hyatt Hong Kong
1110 hrs.

Fons has once again demonstrated the scope of his issue-scanner in China, recalling a very good piece in EWSN about how Neilsen uses a sample size of 300 households to judge the TV watching habits of 350 million households. He also points us to a Danwei piece containing Neilsen’s pledge to up their coverage to 17,000 households nationwide. Fons quite correctly points out that it’s going to take a lot more than that to gain any kind of statistically significant sample.

The whole issue of advertising ROI is a squishy one at best, even in developed nations like the U.S. For years, Neilsen, Arbitron, and companies like them have managed to add some kind of quasi-scientific fig-leaf to the problem, essentially saying “look, we can’t tell you how effective your ads are, but at least we can tell you how many impressions they’re making.”

Ignoring for now the fact that the value of those impressions is falling toward some very sharp rocks at terminal velocity, Neilsen’s issue strips away the last fig leaf on the presumption that advertising IN AND OF ITSELF has innate value – in China at least.