Superhero Challenge is on between China & the West

Superhero Grosses

The US cultural influence on the world over the last one hundred years has been pervasive. The country adjusted in the 1960s when British culture in music and film pushed back.  Now is it time for China to push.  Chinese people have accepted America’s superheroes, as the world had in the past, but now China wants superheroes of its own.

Response: Marvel and one of China’s largest game developers, NetEase, have joined forces, as it were, to create graphic novels featuring newbie heroes Aero and Lin Lie among others.  The goal is for these Chinese heroes to be absorbed into the larger hero lexicon and ultimately to be accepted in The Avengers galaxy.  Source: BBC.com

Digital Video Ad Spending Will Continue to Increase

Video Expectations

Digital video ad spend as a percentage of the total has been on the rise over the last couple years, and according to the latest survey of more than 350 big brand marketers by IAB, the trend will continue in the 12-months going forward.  “Two-thirds plan to shift some TV budgets to digital video this year.”  The table shows clearly that the energy for spending is moving toward digital video.

Warning: We learned from a consumer survey last week that marketers should be careful not to impose ads longer than 6-15 seconds on the front-end of a video because the audience will bail and the budget will be wasted.  Source: MarketingLand

Mobile Subscriptions Pass 1.2 billion

Carrier Data - April 2018

Mobile subscriptions for China’s major carriers have passed 1.2 billion in a population of 1.4 billion.  April was the fourth consecutive month in which China added more than 10 million new smartphone subscribers.  As these milestones are crossed they remind us of just how large China is and how enormous the potential is for marketers trying to penetrate it.  Sources: China Mobile, China Unicom, China Telecom

US Digital Advertising up 21.4% in 2017

Digtal Ad Spend 2017

Spending on digital advertising in 2017 rose 21.4% over the previous year. And while mobile continues to take a greater share of the total (56.7%) it only increased by 4% over the prior year. The implication is that as a percentage of total digital buying, the shift to mobile has slowed to point where it is likely future mobile spending increases will reflect the general move to digital advertising instead of outpacing it as in past years.  Source: MarketingLand

China’s Manufacturing PMI Remained Steady in April

Manufacturing PMI-April-18

April data saw output move up slightly while new orders slowed. Employment declined while buying activity increased. And, in spite of March’s spike in food prices, inflationary pressures in April remained relatively quiet.

Zhengsheng Zhong, analyst at CEBM Group, a subsidiary of Caixin, commented, “Operating conditions continued to improve in April. But uncertainty in exports has increased significantly, and the dependence of the Chinese economy on domestic demand is rising.”

Source: Markit Economics

Chinese Consumer Confidence Down, but still Up

Consumer Confidence - March 18

Though Consumer Confidence dropped in March, probably due to the increased cost of food seen in February, it still sits at very positive levels, particularly when contrasted to the 13-month average of 118. The past six months have all been above 120, which indicates a population that is ready and willing to spend – a willingness all marketers enjoy seeing.  Sources: Tradingeconomics.com; Nat’l Bureau of Statistics, China

China’s Financial Sector Transformation Will Benefit Western Banks and Securities Companies

Financial Sector Changes

In 2001 China gained entry into the World Trade Organization, which began the transformation of the country’s manufacturing sector. On June 30th of this year, the Chinese government’s promise “to ease ownership and business restrictions for banks, securities firms, asset managers and life insurers” will go into effect. As indicated by these projections, enormous gains are expected for western financial sector companies doing business in China as the rule changes will have the same transformative effect on the financials as entry into the WTO did for manufacturing.

Bloomberg Economics Chief Asia Economist, Tom Orlik, commented, “A more open and competitive financial sector should deliver more growth bang for each unit of credit buck — critically important if China is to make headway on deleveraging.”  Source: Bloomberg

For Mobile: Keep it Relevant, Entertaining and Short

Preferences in Mobile Ads

Successful mobile ads answer three big questions. Is the ad entertaining? Is the ad too long? Is the ad relevant? All the other results from this research provide some detail, but fit into one of these three buckets. The challenge for marketers is to build mobile ads for the medium and how consumers use it. Since all effective ads are entertaining and relevant, going to a video with a mobile ad in front of it limits ideal length to six seconds. The key is transmitting an entertaining message before the annoyance factor kicks in.

Reflecting on these data, Kara Manatt, SVP, Intelligence Solutions and Strategy at Magna Global gives advice, “Mobile demands its own customized ad formats, rather than simply repurposed versions of existing assets that were developed and optimized for other platforms.”  Source: AdWeek

The Third Way

Mutt

A thoughtful article in AdWeek challenges the in-house / out-of-house back and forth that’s rolling through media currently.

  • Example 1: The trend to bring media in-house to save money may be misguided if costs are lowered, but returns come in even lower. ROI audits are required. And the added in-house headcount has to be considered.
  • Example 2: Reducing costs by eliminating non-working costs like ad verification, brand safety and fraud prevention will have consequences if your company does not have very sophisticated internal tracking technologies.
  • Example 3: There is an argument that says outside agencies don’t know our business; therefore it makes sense to bring our media in-house. The counter is that outsiders bring a broad view and best practices that an in-house view may lack.

There is a third way. It argues that ‘brands should own the technical contracts to better ensure transparency, but should put the headcount and best practice harvesting at an agency.”  Remember, the healthiest dogs tend to be mutts not pure breds. Maybe the best balance in modern media is a mutt.  Source: AdWeek

Inflation Softens

Inflaation Rate - Mar-18

As we suggested last month, the inflation spike in February appears to have been an anomaly. It was mainly caused by February’s 4.4 percent jump in food prices. That settled down to a milder 2.1 percent increase in March. At the same time softer numbers were seen in non-food prices as well as consumer and producer prices overall. The combination of all these contributors to inflation is responsible for the softening.

Source: Trading Economics; National Bureau of Statistics, China