2.5 Million More New Subscribers than Average in February

Carrier Data Feb-2018

The twelve month average for new subscribers sits at about 8.2 million. February came in at 10.6 million, which is 29% above the average, therefore notable. The overall story however, hasn’t changed. China is a mobile phone society with a market penetration that is essentially 100%.   Sources: China Mobile, China Unicom, China Telecom

Location, Location, Location

Local Advertising

One of the simplest advertising breakouts, one that’s been available since the mobile big bang is location. It seems as though some marketers have been slow to adapt, but according to a BIA/Kelsey survey of 500 marketers by the Local Search Association there seems to be increased interest in using this marker. The projected growth in localized advertising for 2018 is “the largest annual increase in five years.” Part of the expected growth is being driven by traditional media such as TV and mail order that are targeting households with IP matching.  Source: Mediapost

The Powerful Chinese Consumer on Display

Cpnsumer Price Index Feb-18

Earlier in the week we reported a substantial increase in retail growth for February. That happened in spite of this significant 1.4% spike in consumer prices. This documented purchasing behavior regardless of increased prices is yet another argument supporting the thesis that Chinese consumers are an increasingly powerful force in the Chinese economy.   Source: www. Tradingeconomics.com; National Bureau of Statistics of China

Some Positivity Coming out of IAB’s Annual Leadership Meeting


Based on reporting that has come out of the recent IAB annual Leadership Meeting it feels like the pervasive negativity of 2017 and the struggle to come to grips with issues of transparency and veracity are finally showing signs of dissipating. Three elements are playing a role in turning this corner. The first is third-party verification, which has taken hold. It is said that “97% of advertisers want independent measurement of their media buys.”

The second is the quick adoption of IAB’s ads.txt standard, which assures more transparency. In a matter of months it has been incorporated by the majority of top publishers to the point that it has gained critical mass and many advertisers are requiring it before they will spend any advertising dollars.

And finally, there is an expectation that vendors will be more than simply passive tech providers. More and more they are expected to provide a ‘brand-safe, premium content’ environment.

Though there is still work to be done, as we move through 2018, the feeling is that we are moving in the right direction.  Source: Exchangewire

The Growth Pattern into the New Year Mimics Last Year

Retail Sales Growth-feb-18

The pattern for December to January to February this year matches the pattern set last year when January’s percentage growth was down from December – as if the Chinese consumer took a breadth after their holiday season. Then February recovered. Similarly, January 2018 saw lower growth than December while February increased substantially. But not like last year where the delta from January to February was 109%. This year it was a mere 29%. If the pattern holds, the numbers for March will be lower than the February spike. Still, you can depend on the Chinese consumer to consume.  Source: www. Tradingeconomics.com; National Bureau of Statistics of China

The Changing Chinese Marketplace – Trends for 2018 – Part One

Digital Spening in China

The maturation of the Chinese consumer is something to behold. Four years ago we were writing about the pent-up-demand, the consumer who would buy the next shining new thing. Then it was the more discerning consumer and now it is the impatient, I-want-it-now consumer. Now “every touchpoint needs to be simple, digitally available and consistent across channels.”

New Retail: To service the I-want-it-now consumer a form of new retail is emerging that will offer vending machine sales for “everything from live hairy crabs to new cars.”

Brand Building More Multi-Dimensional: Trends rarely move in a straight line. While online ad spending in China reached 57% of all ad spending, the expectation is that we are “likely to see more brands offering digitally-integrated offline experiences to differentiate themselves from the increasingly crowded online world.”

Smart Selection of Lower-Tier Cities: It is not a new trend, but a continuing trend as companies seek the less crowded markets of China’s back water. Alibaba has been leading the way into tier 3 and 4 cities that by western standards are large population centers that have been under-serviced.

Premium Digital Content: A couple years ago the skeptical Chinese consumer was unwilling to pay up front for digital products. That has changed. Last year they outspent their American rivals by 133% for apps.

Source: China Skinny

More Work Needs to be Done to Fight Fraud

Registered Ads-txt Sites

Pixalate reports that Ads.txt has crossed another threshold; more than 50% of the top 5,000 programmatic sites have adapted the IAB-led anti-fraud standard – a 67.6% increase since the start of 2018. While there are still many sites that have not jumped on this bandwagon, those that have represent the very best top sites. That’s a good thing.

Before we pat ourselves on the back for progress in the fight against fraud, note the test recently done by New UK. They shut off their programmatic supply and then tried to buy that supply on various exchanges. One exchange sold as much as $1.4 million of the non-existent supply. That’s not a good thing.   Sources: Campaign, MediaPost

China’s National Peoples’ Congress Meets

Peoples Congress

China’s National Peoples’ Congress was in western news last week because of the big political move by President Xi Jinping to extend his tenure. But the more immediate set of stories from the Congress had to do with coming changes that will effect China’s economy.

Debt: As part of counter measures to slow the growth of debt, the government will increase “regulatory supervision of shadow banking and internet finance.” At the same time, mobile internet service fees may be reduced by 30 percent or more. The internet element is important to us.

Environment: Expect a 19% spending increase on green industries. There is a major effort to convert home heating from coal to gas and the government is “pushing hard to become the Detroit of electric cars, with the government targeting 7 million EVs by 2025.”

Housing: To slow the purported housing bubble the government will impose a property tax.

Gambling: “Reform” is in the air. Chinese people love gambling, but casinos are banned in all of China except in Macau. There is talk about now about a future with online gambling, a lottery and sports betting.  Source: Blooomberg

Programmatic Ad Revenues to Grow 1,000%

Projected N Amer Programmatic Rev

The spectacular projected growth of more than 1,000% is not explained or justified by the folks at Persistence Market Research, but they do ascribe current growth to an increased use of private market placement. One would assume they are making such a projection based on the belief that issues relating to programmatic buying will be resolved and automation (read: progress) will move on at an unabated pace.  We’ll revisit this in 2025 to check their accuracy.   Source: Persistence Marketing Research

Manufacturers: Near-Term Positive


Manufacturers’ view of China’s near-term future remains very positive. On this scale it has been sitting a half point above the 13-month average for the last three months and for six of the last 8-months. The explanation given is a combination of a slight increase in new orders, output and business activity along with a reduction in workforce expense.

Zhengsheng Zhong, analyst at CEBM Group, a subsidiary of Caixin Manufacturing PMI in China was quoted as saying, “For now, the durability of the Chinese economy will persist. Looking ahead, whether demand generated from the beginning of work in March will gain strength will be key in determining China’s economic direction for 2018.”  Source: Markit Economics