Daily Tech Snippet: Monday December 22

• In China, digital ad spend will overtake TV next year, amid a rapid jump to mobile advertising: Next year companies are expected to spend more money on digital advertising than on television campaigns in China. It is a stark shift from three years ago when nearly half of the advertising dollars went to television and just 14 percent went to digital, according to ZenithOptimedia, an advertising agency. China is also diverging from the United States, where television continues to dominate. Homegrown social media platforms in China are at the center of the push. Facebook, YouTube and Twitter are all blocked in China, giving platforms like Tencent’s Weixin — known as WeChat outside the country — and Sina Weibo an advantage. “I’ve been here four years. In that time I’m now on the third dominant social network — first it was Renren, then Weibo and now it’s WeChat,” said Chris Jones, the executive creative director at the ad agency Wunderman in China. Weixin’s particular quirk — that users communicate only with friends and contacts within their circle — has allowed companies to develop direct relationships with consumers. But it also poses a challenge since users have to first choose to include a brand within their Weixin network.

• YouTube struggles to monetize despite its enormous engagement..:  For all of its influence as a cultural force, YouTube is still finding its way as an economic one. Viewers may be migrating online in droves from traditional television, but the advertising dollars have not yet followed. The marketing research company eMarketer estimates that YouTube will log about $1.13 billion in ad revenue in 2014, a small fraction of the $200 billion global TV advertising market. The quality of most YouTube programming is too unpolished to draw big investments from many blue-chip advertisers. YouTube creators, meanwhile, complain that the company takes too much of the ad revenue — as much as 49 percent — and does too little to market and promote its stars, which makes it hard for them to leverage their celebrity.

• YouTube also faces a host of small rivals - startups like Interlude that are gaining traction: The basic format of Interlude’s videos will be familiar to anyone who grew up on the “Choose Your Own Adventure” book series. As the film plays, a viewer is prompted with questions about how to proceed — wear the black dress or the white one? — and the video seamlessly integrates each choice. The company is one of many challenging YouTube’s dominance of online video. Vessel, started by two former Hulu executives, recently revealed a plan to offer $3 subscriptions for early access to short videos. And in September, the Universal Music Group made a deal with Mirriad, a company that specializes in inserting new ads into old videos. Interlude’s success against a giant like YouTube — which is owned by Google and attracts more than a billion viewers each month — is by no means guaranteed. But it has already had some promising hits. more engaged audience yields higher ad rates, and Interlude’s narrative mazes also offer ways for producers to incorporate brands (for a fee, of course). In one illustration cited by Robert S. Wiesenthal, Warner Music’s chief operating officer, the viewer of a rap video could choose to have the star keep dancing at a party or hop into a BMW. “We are all on this hunt for monetization,” Mr. Wiesenthal said. “When someone makes a choice to learn about something, that is worth more than, say, a passive pre-roll ad or a guy just holding a bottle of Scotch in his hands.”

• Beacon-enabled mannequins are the latest in mobile app notifications: “We decided we had to work out a way to bring the good old-fashioned mannequin into the 21st century,” said Jonathan Berlin, the managing director of Universal Display, the company that is selling mannequins with electronic implants. About a year ago, Mr. Berlin and his partner, Adrian Coe, had an idea to outfit their product with electronic beacons, small transmitters that can communicate with your cellphone. Mr. Berlin and Mr. Coe created a separate company, Iconeme, just for the beacons, which interact with users through the company’s app. Shoppers can see what a store’s mannequins are wearing, who designed the clothes and how much they cost. But these can beckon you from outside the store, sending messages to your cellphones and beaming pictures of their outfits onto them. They are one of the latest efforts by the struggling retail industry to lure customers away from the Internet and back into brick-and-mortar stores. Don’t feel like going through the store to find an item? You can even buy it through the app. Iconeme is not the only business trying to use technology to help people shop in stores. A company called MyBestFit created kiosks that quickly scan people’s bodies, analyze a database of clothes and make suggestions. Iconeme’s first beacon mannequin began in Britain in August. Since then, about 3,500 people have downloaded the company’s app, Mr. Berlin said. Beacon technology is already popular with retailers along Regent Street, a high-end strip of stores in London, which already use beacons to ping shoppers with promotions and advertisements. He said three retailers in the United States were testing his products, but declined to disclose them, citing confidentiality restrictions.

• Xiaomi close to raising $1B, valuation seen at ~$45B: Xiaomi raises over $1B from All-Stars Investment, DST Global, others. The round, which is expected to be closed this week, would value Xiaomi at more than $45 billion, as per this report. Chinese smartphone manufacturer Xiaomi, which also has a good presence in India, has netted over $1 billion in funding led by All-Stars Investment, an investment firm launched by former Morgan Stanley analyst Richard Ji, says a The Wall Street Journal report quoting an unnamed source. Russian investment firm DST Global, besides Singapore sovereign wealth fund GIC also participated in the round.

• Flipkart raises $700M, valuation seen at ~$11B: Flipkart, India’s largest e-commerce marketplace, has raised $700 million in fresh investment from existing as well as new investors Baillie Gifford, Greenoaks Capital, Steadview Capital, T Rowe Price Associates and Qatar Investment Authority. The e-commerce powerhouse, which is on a fund-raising spree, has raised funding for the third time in 2014. In May, it had raised $210 million (about Rs 1,200 crore). It had raised funding worth $1 billion (about Rs 6,000) in July. The latest round of fund-raising has seen investment from existing stakeholders DST Global, GIC, ICONIQ Capital and Tiger Global. According to reports, the latest fund-raising has pegged Flipkart’s valuation at $11 billion.