Unbelievable Growth Seen for Chinese Luxury Goods Sales

Luxury Sales 2018

In a study by Bain & Co. global luxury sales were pegged at $293.9 billion for 2018.  They project a 40.2% increase to $412 billion by 2025 – that’s just six years from now.  More impressive is their projection for China, which they claim will represent 46% or $189.5 billion of global luxury sales by that time.  That’s hard to believe, but even if the increase is half as much, it will be an impressive leap forward and solid reason to engage China’s consumer market.  Source: Chicago Sun Times

Programmatic Guaranteed Brings New Levels of Efficiency

Programmatic Guaranteed

It is all about finding and locking in an audience.  Programmatic guaranteed is the latest bright star in the never-ending battle to narrow the known universe to likely buyers. It uses a device ID or cookie to match a user to a demographic type.  In the mobile world it’s the device ID that’s central to programmatic ad buying.

Most of the time one is matching a user to a publisher as a way to infer a demographic type, which can then be guaranteed to a brand or agency.  But there are other ways to accomplish the same thing that may yield an even more specific demo typing.  Imagine: what if you used geo targeting for universities to identify students or stadiums to identify sports fans? Once the ID is connected to an IP address the user can be tracked to other geo or web locations to further define him/her for advertisers.

The graph shows the added efficiency gained by programmatic guaranteed as compared to traditional direct buying.  That justifies the effort.  Source: MarTech

China’s CPI Plateaus

China-Cosumer Price Index-Oct-18

After four months of price increases, October’s CPI plateaus at six tenths above October 2017.  It is clear that, even if you remove February’s number as an outlier, consumer prices in China are nominally higher than they were a year ago, which puts a tinge of inflationary pressure into the equation.  It remains to be seen if the temporary cooling of trade tensions plays a role in lowering the CPI over the next couple reporting periods.  Sources: www. Tradingeconomics.com; National Bureau of Statistics of China

Chinese Big Media Seeing Big Growth

Chinese Media Value

Overall Chinese media is expected to grow 24% in 2018 as compared to 2016.  It’s a number that’s in sync with the growth of mobile phone penetration and usage we’ve reported elsewhere.  Entertainment and paid content, especially paid video content, are the drivers behind the growth and they are pulling significant investment dollars into video and live streaming plays in particular.  Sources: 2018 China Cultural and Entertainment Summit; Ent Group

Native Ads Pull!

Native v. Banner

The value of native ads – content ads the nestle into websites natural look and feel – is worth the extra effort required to make them integrate into the natural structure and style of the ad carrier. Data from a consumer survey by Sharethrough and IPG Media Lab used eye-tracking technology to measure user attention.  The data in our table shows pretty strong positive results in favor of native ads.  Consumers were far more likely to view a native ad than a standard banner and natives had the effect of increasing purchase intent and brand affinity.  Thirty-two percent “would share the [natural] content with a friend” as opposed to only 19% who said they’d share a banner.  Source: Sharethrough

Chinese In-App Use: Both Depth and Breathe

China Installed

We are always trying to illuminate the Chinese market for Western advertisers. Often the point is made about the sheer size of it – giant population, giant consumer class population and giant mobile phone penetration.  Today’s data adds another dimension.  It is not merely that there are many Chinese consumers on phones, it is a measure of their engagement represented by the average number of apps they have installed on those phones.  If apps installs can be used as a measure of engagement, then Chinese consumers are 8.4% more engaged with their phones than their US counterparts.

Conclusion: In-App advertising in China is both broader and deeper than anywhere else in the world.  Source: Smaato

Ride the Wave

Market Timing

An analysis by Singular sets a marker for advertisers.  It compares the timing of marketing effort in key app categories against actual consumer activity.  The result demonstrates that brands are often out-of-sync with the consumers they are trying to influence and they are often spending more money for that influence.  Example: Productivity apps seem to be spending more acquisition money from July through November though consumers are focused on productivity apps in February.  Sometimes advertisers are off a little, other times they are off by a lot.

“Ultimately, what’s clear is that macro trends like seasonal holidays drive consumer behavior, but marketers often try to drive trends instead of riding them.”  Source: VentureBeat

And the Beat Goes On

China-Retail Sales 0ct-18

Sitting a tinge over the 13-month average, retail sales continues its monthly increase, a pattern that has been consistently upward ever since we have been watching.  Of course, we have been watching during the single fastest, largest middle-class growth period in history.  That coupled with the emergence of mobile communications and a government that committed to a consumer economy has made the consumption story what it is.  Source: www. Tradingeconomics.com; National Bureau of Statistics of China