Mobile Advertising Audience in China Increases by 8.4 Million New Subscribers in March

Carrier Data - March2018

Some contradictory numbers raise unanswerable questions as we see a first quarter run rate of 8.4 million new mobile smartphone subscribers per month compared to last year’s monthly growth of 7.2 million, a 16.6% improvement. At the same time a report by Canalys says that first quarter smartphone sales in China have declined 21% on an annualized basis. How is it that phones sales are down while new subscriptions are up? Any guesses?  Sources: China Mobile, China Unicom, China Telecom, CNBC


What Goes Up Must Come Down

Manufacturers PMI - Mar-18

Last week we reported a significant decline in the service sector PMI and wondered if it would be matched on the manufacturer’s side. The decline has been match, though not to the degree we saw in the service sector. Drivers behind the movement were marginal growth in output, new orders and export sales.

Zhengsheng Zhong, analyst at CEBM Group, a subsidiary of Caixin, commented, “The manufacturing PMI reading in March showed that demand was not as strong as expected, leading to lower willingness of manufacturers to produce and restock.”    Source: Markit Economics.

Ad Spending on TV down slightly, OTT Ad Spending Up a Lot

OTT 2018

Shifting winds in digital advertising are showing the first signs of affecting television, the big kahuna of all advertising. eMarketer projects that TV advertising will decline by a billion dollars in 2018 at the same time they are projecting an 18.7% increase in overall digital ad spending – a total reaching $107.3 billion.

In part the shifting money is going to new digital media created by the unplugged, Over-the-Top (OTT) generation who are watching fraternal twins, Hulu and Roku. Their increases, from an admittedly low starting point, are expected to grow substantially. They will represent a mere 1.3 % of the total in 2018, but it’s not nothing and the vector is remarkable.  Source: eMarketer

China’s GDP is Flat on the High Side

GDP - Q!18

The steadiness at the high-end of expectations for China’s GDP is consistent with the consumer and business satisfaction numbers we have reported for most of the period. Looking forward, we have seen the underlying number weaken in April, which portends a slight decline in GDP for the second quarter. The data for the next two months will have much to say about the second quarter’s final reading.

First Quarter Growth Breakouts:

  • Industrial production up 6.8%
  • Retail sales up 9.8%
  • Fixed-asset investment up 7.5% to $159.5 billion

Sources: Trading Economics; National Bureau of Statistics, China

Data Analytics: Best Practice to Common Practice

CMO Survey2018

With all the talk about programmatic buying and data analytics, this year’s CMO Survey of 362 US marketers provides a reality check. Conclusion: much of the discussion around analytics is hot air. Though there was a sizable jump in the use of analytics in year up to February 2018, almost 60% of marketers still do not employ it.

The same survey projects spending in the next three years on data analytics will increase from 5.8% to 17.3% – the implication of which is continued growth. Maybe this best practice will finally become a common practice.  Source: Digiday

China Challenging the US in IP Innovation

IP Innovation

In 2017, China moved past Japan as the world’s number two patent filer, now sitting just behind the US. It is inevitable that Chinese intellectual property production will reach, and likely surpass, the US in the coming years – that is regardless of what either government does to thwart the other. China is already ahead of the US in IPs relating to telecommunications and online payments though it lags behind in categories such as semiconductors, robotics, and biotech.

Richard Titherington, chief investment officer for Asian emerging markets at J.P. Morgan Asset Management notes, “If you’re looking out 5-10 years you’ll see a much more level playing field in terms of innovation, especially around online platforms, digital innovation, machine learning and artificial intelligence.”  Source: Reuters

* China produces one fourth the researchers per million compared to the US. Since the Chinese population is four times the size of the US, China produces about the same number of researchers as the US.

Chinese Marketing Elevates

Artifical Intelligence

Until recently Chinese marketing has been a generation behind marketing in the west. That is changing. Chinese sophistication is catching up as we see stories about local companies that are employing cutting-edge AI market technologies to improve bottom lines.

In one case, a company is matching customer relationship data with the content usage and purchase history. Applying machine learning to the match-ups allow for personalized messages to be directed with precision. “Instead of sending one message to a million people, you can send a million messages that are unique to each user.”

Another Chinese company is using AI to analyze content driven by social media influencers and then track the resulting purchases. The result is an understanding of the kind of content that generates the best purchase response.  Source: eMarketer

Regardless of Issues, Programmatic is Projected to Thrive

Programmatic Projection

A study from Zenith called Programmatic Marketing Forecasts projects a global increase of 47.7% in advertising sold programmatically by 2019. Current country leaders, the US and China, with only 57% and 29%, respectively, of their ads delivered programmatically, still leave lots of room for growth.

Jonathan Barnard, Zenith’s head of forecasting and director of global intelligence (quite a title) says, “The most advanced display markets will be 90% programmatic by 2019. It won’t be many years after that until the global display market is fully programmatic.”   Source: Net Imperative

Service Sector Decline

Service Sector-Apr-18

April’s service sector survey is the first time in a long time that we have to report a decline in outlook. Since the high of February there has been a 4.4% drop in sentiment, though it should be noted that the current 52.3 is only one tenth below the 13-month average for this indicator. It will be interesting to watch for data from the next manufacturing survey to see if there is a trend brewing.  Source: Markit Economics

Clustering Data for Loyalty Impact


Technology’s yield is incredible: it produces more data than can be analyzed along with more channel options than can be tracked. What to do? Here are three ideas with which to connect and retain customer loyalty.

  1. Focus your data on customer clusters. Say you have 10 data points collected on each customer. They can be grouped by agreeing data points to find clusters giving you a valuable insight into who they are.
  1. Use the data to build inferential demographic patterns. Where is their geo-location as well as device location – are they mobile users? Are they health conscious or are they readers?
  1. Make these data patterns dynamic. As change occurs you must be ready to adjust – as desktop users move to mobile, marketing messages may have to adjust, as customers move through the product experience even technology may have to adjust. Winning companies stay agile.  Source: CampaignUS