Is June a True Bounce or Just a Momentary Blip?

china caixin

June was expected to produce another slight downward move, instead it popped up to the positive side of 50 as output and new export orders increased faster than predicted. Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group, sees this jump as temporary.  He comments, “The manufacturing sector recovered slightly in June, but based on the inventory trends and confidence around future output, the June reading was more like a temporary rebound, with an economic downtrend likely to be confirmed later.” Source: Market Economics

Alibaba Matches Amazon’s Retail Move

alibaba

Most of the time we highlight contrasts between China and the US. One of the most obvious is that Chinese business uses red to indicate growth and green to indicate decline. Therefore, it’s always interesting to find parallels in the US and China.  Here’s one parallel.  It has been announced that Alibaba will purchase 18% of Lianhua Supermarket, a chain with 3,618 stores, covering 19 provinces and municipalities in China, a move the aligns with Amazon’s purchase of Whole Foods.  Both online giants view food delivery as the next big area of growth so it must be true.  Source: China Retail News

A Higher Level of Data Sophistication

maytag

We write this as a teaser for the future.  Those of us in the programmatic world often get lost in the complexity of the possibilities – the many demographic breakout possibilities, the location-based marketing that sends you a message after having eaten at a restaurant, etc.  But the reality is that most advertisers are barely in the game.  They are still buying a pile of users; they are throwing their message up on the wall and hoping it sticks at some reasonable cpm level.

In that light, here’s a new level of sophistication.  Some forward thinking manufacturers are capturing visitors to their websites, websites that do not sell directly, to pass their first-party data onto their resellers who then approach the potential customer.  An AdExchangers article recently highlighted this practice with a example in which Maytag worked with Electronic Express to yield a “10% jump in online orders and revenue when targeting against Whirlpool-owned home appliance brand Maytag’s data for a month-long campaign in May.”  It can work.  Someday it won’t be the exception. Source: AdExchanger

Price Index: One Tick Up

china consumer price index

It is hard to say that the Consumer Price Index is directly and inversely tied to consumer confidence, but as a general statement one can say that as the Price Index goes up consumer confidence is likely to go down. And that is what happened in May as the Index ticked up, consumer confidence ticked down. At 101.5 the Index sits just below the 13-month average of 101.7.  Sources: Trade Economics; National Bureau of Statistics, China

Add Urgency to Your Message

Urgency

The key to successful marketing is the ability of your message to change inertia, the ability to make people move from passive to active, from not buying to buying.  An article in Marketland outlined techniques that have a history of making people reach for the credit card.

In one form o another they all add urgency to your message…

  1. Put a deal on a countdown clock in order to add the extra push needed to move a consumer into action.
  2. Add the language of urgency.  Words like “hurry,” “quick,” “fast,” “now,” “approaching,” “rapidly” and “seconds” spread through an ad or a website are the kind of words that suggest action by the audience.
  3. Argue there is something to lose if this moment is lost. “Respond now to get the special discount” or “eligibility for free shipping ends in 10 minutes” are the kind of phrases that can heighten the pressure to purchase.
  4. Finally, play the scarcity card.  The best example is the eBay product with the note saying “only 1 left.”  If a customer is stuck ‘watching’ a product that may be running out, they may be moved to push the purchase button.

Urgency is the key to changing passive to active when asking for the order.  Source: Marketingland

Down is Up Again

china consumer

Chinese consumer confidence continues to fly in spite of May’s subtle dip.  It has been sitting comfortably above 110 since January well above the 13-month average of 107.9.  In fact, for a full year it has been over the positive point of 100.  Importantly, this number is the foundation for the new Chinese economy, it supports the ever-expanding retail sector, which is an increasingly important element in GDP growth.  Also, it implies consumer consumption desire and, as marketers, those desires are important.  Sources: Trade Economics; National Bureau of Statistics, China

P&G Leads the Way

P&G

Last week we noted the new anti-fraud offerings by Trustworthy Action Group (TAG) and this week we see that P&G, the world’s largest advertiser, has aligned itself up squarely behind TAG’s clean-up intentions.  Gerry D’Angelo, the global head of media for P&G threw down the gauntlet to the whole digital advertising community by saying, “This is not a spectator sport. Get off the bench and join in.”

To put force behind its declaration, the company has announced a four-point plan that includes adapting “the Media Ratings Council (MRC)–validated viewability standard, implementing accredited third-party verification, creating transparent agency contracts and preventing ad fraud by teaming with the Trustworthy Accountability Group.” Source: CampaignUS

Contrasting Strategies for China

apple starbucks

In response to slowing sales Apple is making changes (concessions) to China in their next iOS release.  A series of features will localize the product for the market.  Those features include: “Chinese-English translation on Siri, short message fraud extension, Shanghai dialect dictation and using a phone number as the Apple ID.” Apple’s playing catch-up because WeChat, Alibaba’s Alipay, already have some of these features.

By contrast, Starbuck’s is bucking the market by actively working to change traditional Chinese habits from tea to coffee.  At this time, consumption outside the home is close to an even split.  (Inside the home preferences overwhelmingly favor of tea).  To move the market the company has a loyalty program with 8 million members as compared to its 13.3 million members in the US.  That’s significant because China began 2017 with slightly less than 2,000 Starbuck’s stores while the US had slightly more than 13,000 in operation. There is more intensity in China.  Sources: Shanghai Daily, Barons

Record Digital Ad Earnings

us digital earnings

2017’s first quarter digital advertising earnings were the second-highest quarter of all time behind the fourth quarter 2016, which set the record. This continues a seven year run in which the first quarter bested the first quarter of the prior year.

“These figures reflect marketers’ ongoing commitment to invest in digital,” said Chris Kuist, Senior Vice President, Research and Impact, IAB. “This steady growth is a direct result of interactive advertising’s power to reach consumers where they are spending more and more of their time—on connected screens.”  Source: Interactive Advertising Bureau