Facebook’s Patient Persistence in China

facebook APAC

Following Facebook’s quiet attempts to re-enter China is a study in patient persistence. We have seen Mark Zuckerberg’s personal diplomacy including learning the language and using it at local appearances.  Recently the company’s photo app, Moments, was launched in China through a local partner under the culturally friendly name Colorful Balloons. Though Facebook itself has been banned since 2009 for political reasons, the government seems to be letting Colorfull Ballons fly for the time being. The latest report is that the company is searching for office space in Shanghai.

Facebook’s desire to get back into China is obvious given the size of the market and given its absence relative to other Asia-Pacific counties. A Kantar TNS study shows that Facebook is the most used social network in the region with an average usage of 83.5% in 15 Asia-Pacific countries.  By comparison, usage in China is estimated to be a mere 19% and those users are circumventing the government with VPNs.  Source: eMarketer.

Trying to Keep Up: Advertising of the Future

advertising future

As if the evolution of modern advertising isn’t moving fast enough, here’s a projection into the future.  The five most likely new areas for advertisers according to MarketingLand, are as follows:

 

 

  1. Smart home devices are not yet mediums for advertising, but that may not be for long.
  2. The sharing economy in which companies like profitless Uber see revenue by running video ads in the same way taxis do.
  3. Virtual reality (VR) offers car companies the possibility of a virtual driving experience in an experiential ad.
  4. Augmented reality (AR) offers an extreme shelf-talker as you walk down the aisle of the supermarket and a discount coupon pops up on your glasses
  5. Connected and self-driving cars are already Bluetooth enabled and once the self-driving car becomes a common reality that Bluetooth connection could deliver content and advertising to the relaxing rider.

Two questions; (1) At what point does the user of these devices reject the constant intrusion? (2) What’s the over and under that any of these new ad availabilities will come to fruition?   Source: MarketingLand

Smartphone Subscriber Growth in China Remains Consistent at a Slower Rate

china mobile carriers

With an addition of almost nine million new 3G/4G subscribers in August, replacement growth in China continues, but at a slower rate then we have seen since the beginning of 2017.  Through the first eight months of 2017, growth has averaged 5.98 million new smartphone subscribers per month verses an average of 21.65 million per month in 2016. Perspective: 1.1 billion smartphone subscribers in China is easily twice that of European and the US combined – a ginormous advertising market.  Sources: China Mobile, China Unicom, China

AI Adaption Will Lead to Programmatic Nirvana, Eventually

adaption

Artificial intelligence firm GumGum surveyed marketing and advertising executives in June 2017.  The result is an optimistic view of AI’s current adaption.  The data suggest that 55% of marketers use Chatbots while 77% use predictive analytics and auto-personalized content, some are more committed than others. From our perspective, those numbers seem more like wishful thinking.  After all, we have watched as it has taken several years for programmatic technology to be widely adapted and still, it hasn’t been fully exploited.  To argue that AI has already made the penetration rates suggested in these data seems to be a stretch.  The time will come for AI and programmatic advertising will benefit from integrating predictive analytics, but for now it feels like we are talking near to mid-term futures rather than existential reality.  Source: eMarketer

Consumer Prices Reflect Higher Costs at Manufacturing

china consumer price index

Last week we noted a hint of inflation in both manufacturing and non-manufacturing sectors of the Chinese economy. The higher costs are translating to the consumer side as the Consumer Price Index continues its six-month rise back toward last year’s high. Still the level remains slightly below its level from September 2016.  Sources: Trading Economics; National Bureau of Statistics, China

China’s Service Sector Softens

china caixin

Though overall business confidence has remained strong; there was a notable softening in the service sector in both July (-0.7%) and August (2.0%).  The chief cause for the decline was slower overall domestic and export orders.  Here, as well as in the manufacturing sector, employment declined for consecutive months. An inflation indicator can be seen in the second monthly increase in selling prices.

Sources: Trading Economics, National Bureau of Statistics, China

Leading Strategies for Improving Quality Ad Buys

strategies for improving quality

It is pretty obvious that fake news is top of mind these days.  More than half the respondents to a BrightRoll survey of North American programmatic advertising decision-makers said they intended to pressure their programmatic partners to screen for fake news.  Almost one third of respondents “said they would reduce their spending with programmatic partners whose inventory includes publishers associated with fake news.”

It’s clear from the numbers in the above table that many of the respondents are applying a combination of several initiatives to clean up the quality of their buying.  Better targeting, white lists and shifting from open exchanges to private buying are among them.  Few are doing nothing.  Source: eMarketer

Five Keys to Online Success in China

china online retail sales

  1. Personal Discovery – Chinese shoppers tend to go to an online mall to shop as though they were walking to a physical mall, which leads brands to set up stores in online malls rather than as stand-alone sites – a contrast to the west. To attract customers the stores have to appeal to known interests, which they do by augmenting standard demographics with sophisticated AI
  2. Seamless Sales – Where a western in-app ad a customer clicks to the ads site, in China the users can click the interesting ad while remaining in the app they’re using be it social, search, maps or news.  The sales process is integrated into the various apps of choice.
  3. Content is King – Live streaming is yet another area in which advertising is made easily available.  While some brands connect with celebrities and internet influencers others create their streaming content to connect their products directly to their customers.
  4. C2B Innovation – The standard practice of business-to-consumer is often reversed in China. The consumer data informs the business.  It becomes an interactive loop that a brand can use to feed products to the right person at the right time and to quickly evaluate success or failure of the ad.
  5. Agility, Flexibility, and Speed – The idea of ‘just-in-time’ manufacturing is juiced up with sophisticated communications technology allowing for products to be manufactured after they are ordered and for changing trends to be responded to in real time.  Lag time is eliminated and delivery is efficient.

Source: TechNode

Big Ideas v. Big Data

Big Idea

 

Russ Cohn, Quigley-Simpson’s VP of Creative Marketing & Innovation, expresses a frustration that there seems to be a division between the ‘big idea’ people and ‘big data’ people.  The big idea folks stress need for the great creative while the big data people are programmatic true believers. Cohn makes the point that the two are not mutually exclusive and should instead be considered two sides of the same coin. He suggests the two are interdependent for many reasons.  He asks, in effect, what good is the most accurately targeted ad if it doesn’t connect with the audience? Unfortunately, having both big ideas and big data under the same roof is an expensive luxury that most brands/agencies don’t have.  Source: CampaignUS

Manufacturing in China Further Improves

china caixin

 

 

 

August 2017 saw the manufacturer’s PMI climb well above both expectations and its 13-month average of 50.8.   Positive drivers included a 3-year high in new orders overall and a 7-year high in new export orders, which contributed to expanded production schedules and increased buying.  All of which was accomplished with fewer workers – a growing trend in China.  The only counter weights to growth are increased environmental regulations and a hint of inflation in the future.

Source: Markit Economics