The Invoice Mystery

Broken Invoice

Digidays’ secret marketer reveals a major driving force behind the ‘bring it in-house’ movement: a suspicion of agency over-billing.   Scenario: An agency deal may assume 1,000 hours a month, but in reality accrues 2,000 hours.  While the agency doesn’t up-charge immediately, the extended hours become the basis for the next deal’s increase.  Meanwhile knowing exactly what is causing the extra billing hours is a mystery. Is it unnecessary meetings with more unnecessary people?  Or is it low-balling on the front end?  Those are the questions that may be driving the in-house movement and they suggest another side of the transparency issue.   Source: Digiday

Service Sector Strength is Back

Non-Manuf. Index Jul-18

 

July matches January with the highest Index of the last 13-months, which means the service sector in China is back to robust after a weak run through the spring.  Strength in the service sector is compatible with the government plan to move the Chinese economy away from State run enterprises.  Source: Markit Economics

We Ain’t Seen Nothin’ Yet

Private Consumption

This blog has tracked the expansion and evolution of the Chinese consumer from unsophisticated bling chasers to what is now a rather sophisticated buyer.  President of Lane Crawford stores in China, Andrew Keith, says, “We are not teaching them, they are teaching us.”

The change has taken a mere five to seven years and the country’s total consumption accounts for only 8% of the world’s consumption, but as it edges past Japan to be the number two behind the US, there is obviously plenty of room for growth.

According to Karl Gerth, an expert on Chinese consumption at the University of California, San Diego, “The future of the world will be profoundly shaped by China’s rush toward consumerism.”  That’s why China, regardless of the challenges it presents, is a place marketers should focus for growth in the near-term future.   Source: The Economist

The Case for In-App Messages

Retention Lift

 

Push notifications are the standard, but its second cousin, the in-app message, may be the more effective form of communication.  Research by Localytics suggests that in-app messaging can deliver a significant improvement in retention lift particularly when used smartly in the right app category.  Entertainment, social networking, photography and educational apps deliver the most bang for the intrusion buck, but all categories provide some lift.

The trick is to create messages that accomplish two things: “streamline the app experience” and “direct users on how to gain value from the app.”  If you sustain the messages, research says you’ll see a 40% retention lift in months one and three and a slamming rate of 75% in the second month.  Source: Business 2 Community

Mr. Ding’s Big Bang

Fireworks

If you sat on your beach chair on the local high school’s football field to watch your town’s July 4th fireworks extravaganza, there is a 70% chance those explosions where courtesy of one Chinese man named Ding Yan Zhong.  Through his two companies Shanghai Huayang and Firstrans International, he controls the fireworks supply chain in both China and the US.

Mr. Ding’s control is almost complete.  From the loading docks behind fireworks manufacturers in Liuyang, China to the container docks of Long Beach, California eleven thousand miles away, Mr. Ding’s logistics operation is the moving force behind it all – the trucks, the barges and the ships.  Naturally, with near control come higher prices.  Source Chicago Tribune

GDPR Timeline Suggests Recovery for Programmatic

GDPR Effect

 

Data inferred from initial anecodal responses suggest that compliance concerns at the beginning of GDPR implementation on May 25th, as expected, caused a sharp decline in programmatic buying.  It dropped anywhere from 20 to 50% immediately.  Thirty days later, the decline appears to be in the 20 to 25% range, which is something of a recovery.

Voices:

  • Jon Slade, Financial Times, said, “FT’s demand recovered after five days.”
  • Gerhard Louw, Deutsche Telekom said, “Some buys immediately after the law took effect, but its programmatic spend has returned to pre-GDPR levels.”
  • Chris Hogg, Lotame said some brands “may have temporarily shifted [programmatic] budgets, we’re seeing a return across the board.”

Source: Digiday

Consumer Prices Flat in May

Consumer Price Index May-18

Consistent with China’s month-to-month, flat inflation rate and with its flat Manufacturer’s Purchasing Index, the Consumer Price Index remained flat in May.  The current number matches the 13-month average and confirms the food price spike in February was a fluke that can be disregarded at this point.  Source: www. Tradingeconomics.com; National Bureau of Statistics of China

Digital Gamers Profiled

Gamer Hands

 

From an AppsFlyer/Facebook analysis of 250 million nonorganic app installations (ad-driven) came some real insight into gamers.  Four facts of the digital gaming life speak about their value in the advertising space.

Gamer profile:

  • Fewer than 4% of gamers make in-app purchases
  • More than 30% of paying gamers make more than three purchases within the first 90-days
  • Number of paying gamers is only 6% higher for organic verses non-organic (ad-driven) users
  • Gaming revenue from an average iOS user is 28% higher than from an Android user

Missing is a similar profile for other user categories.  Source: VentureBeat

Ups and Downs Result in Balance

Manufacturer's Index - May-18

 

On the upside May saw growth in output and new orders, which contrasts to a decline in employment to lower costs that caused an increase in outstanding workloads. At the same time an increase in input costs and output charges increased inflationary pressure.  Still, the 12-month outlook is said to have improved.

Zhengsheng Zhong, analyst at CEBM Group, a subsidiary of Caixin, commented, “Overall, operating conditions across the manufacturing sector remained stable.  The growth in the price of industrial products has gained momentum, however, the export situation was still disappointing.”  Source: Markit Economics