Run Rate of Smart Phone Subscriptions at 31% of 2016

Carrieer Data - Oct 2017

Replacement of early generation feature and smart phones continues unabated in China.  Almost ten million new 3G/4G subscriptions were initiated in October of 2017 across the three major carriers.  The average monthly year-to-date growth has been around 7 million as compared to the average of 22.5 million for first 10-months of 2016.  It is clear that the upgrading continues, but at one third the rate of last year.  Sources: China Mobile, China Unicom, China Telecom

Beyond Cookies and Pixels

Wisdom from Nic Travis

 

  • Transparency as a result of “programmatic is increasingly becoming about audiences rather than cookies and pixels. [This] people-based marketing approach has the power to tip the whole industry on its head.”
  • “Success is the incremental between the impressions we serve that don’t get viewed and the impressions that do get viewed. That shows us the true performance of our display advertising.”
  • “Programmatic is a strange field in that it increasingly requires numbers people, but ultimately the output for all those numbers and analysis – the segmentation that you are running – is still creative and requires creative people.”
  • The challenge for the industry on the messaging side is: “helping people feel a bit better about marketing by delivering marketing that is more aligned to their wants, needs and interests.
  • The challenge for the industry on the technical side is: Connecting the people-based dots through “cross-device marketing.”

Source: Marketing Week

Inflation Up, but Not Concerning

Inflation Rate 0ct-17

 

October’s inflation rate for the Chinese economy rose to its highest level since January driven by increased costs for non-food items, consumer goods and services. A small decline in food prices was the only major sector buffering against an even higher increase.  Underlying the increase is a producer price index that rose by 6.9 percent compared to October 2016. The effect of this on Chinese consumers is all that matters. This modest inflation rate should allow consumers to continue their robust buying spree. Source: Trading Economics; National Bureau of Statistics, China

October’s Mini-Recovery

Services Activity-Oct-17

 

September’s mini crash is October’s gain.  Seeing September’s 4% drop compared to August was concerning only if October had continued the downward movement. But October’s rebound suggests that September was an anomaly.  Even if you were unable follow that roundabout timeline, the message is you can relax in the knowledge that there is no service sector meltdown, which is important to China’s evolving economy.  The index has turned in the correct direction though it remains below the 13-month average of 52.2.  Source: Markit Economics

Finding the Balance

Unsure Marketers

 

A survey of 228 advertisers in August and September, 2017 by Taykey in cooperation with Digiday reveals that marketers are not sure of themselves in this quickly evolving advertising world.  When trying to balance scale verses quality no strong majorities emerge a marketers try to define what makes for a quality market or when they try to identify the best content optimization tool.  Even in their defenses against fraud majorities are sure that choices must be made, yet they are not convinced that white lists are any better than private markets.

Taykey co-founder & CEO, Amit Avner reflected on the survey results by asking, “How do you successfully balance quality inventory with scale? That’s the big question advertisers face with their programmatic media spend. The success of one is often at the other’s expense.”  It will be interesting to see if this survey firms up a year from now.  Source: AdTech Daily

A New Chinese Giant Emerges

Online-toOffline eCommerce in China

 

Any category of eCommerce sales that is averaging year-over-year growth of 36% is something that needs to be recognized. Online-to-offline sales in China is it. At this rate, ordering food for pick-up or ordering tickets to a concert online will cross the $100 billion mark by 2019.  And there is a company called Meituan-Dianping that is in the center of this growth.  A new round of funding places the company’s valuation at $30 billion “making it the fourth most valuable startup in the world by CB Insights’ accounting, behind only Uber, China-based ride-hailing giant Didi Chuxing and smartphone manufacturer Xiaomi.”  The new funding was led by Tencent, one of China’s big three (Baidu, Alibaba and Tencent).  Source: eMarketer

Fighting Ad Spoofing with a Third Party White Lists

Generic Website

As the demand-side gets more and more concerned about buying fraudulent impressions, particularly ad spoofing where a low-life operator steps in front of a legitimate publisher’s domain to skim ad dollars, there a new defenses. The Interactive Advertising Bureau (IAB) has established Ads.txt as a bulwark against this kind of fraud. Some DSP’s are refusing impressions from sites that are not registered on the Ads.txt whitelist.

Publishers can easily set-up their site by adding a simple text file to their servers, which can be integrated into programmatic platforms to add one more layer of security. The logic is simple: collect the money others are scraping from your identity and don’t be left behind as big boys like Google have already joined up. Source: Media Post

Holding Steady

Manufacturing PMI-Oct-17

 

While new orders, new export orders and buying activity all increased, they appear to be balanced by increased costs resulting from government imposed environmental requirements and marginally lower inventories.

Looking at the future, Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group noted, “The stringent production curbs imposed by the government to reduce pollution and relatively low inventory levels have added to cost pressures on companies in midstream and downstream industries, which could have a negative impact on production in the coming months.”  Source: Markit Economics

China’s GDP Ticks Down in Q3

China GDP - Q317

 

China’s Gross Domestic Product for the third quarter of 2017 ticked down slightly because fixed-asset investment grew less than expected. Other indicators such as industrial output and retail sales continued to deliver robust increases.  Sources: Trading Economics; National Bureau of Statistics, China

Projection: Online to Beat In-Store Holiday Purchasing

Holiday Buying patterns

 

For the first time Deloitte’s 2017 Holiday Retail Survey of 5,000 US consumers projects online buying will out-pace in-store purchasing this holiday season.  No wonder so many malls are closing.  The number is even more notable with the reality that much of the in-store purchasing will come after online searching and comparing – evidence of a quickly shifting consumer purchasing patterns.  Bricks and mortar retailers must find ways to live in the new world.  Companies like Walmart have acquired a number of online retailers in their effort to add a new revenue line to their balance sheets to replace lower revenue from their core business.

This business adjustment parallels that which the newspaper business is going through. While many newspapers have closed others, like the New York Times, have expanded their online presence and established pay walls to replace lower revenue in their print additions.  The Times is a case study for adjusting to the new digital reality.  The company’s third quarter reporting shows an 11% increase in digital advertising revenue and a 46% increase in digital subscriptions, which together represent 35% of total Q3 revenue that was up 6% overall.  Source: MarketingLand, NY Times, mPoint analysis