Chinese Consumer Confidence Declined in June

Consumeer Confidence - Jun-18

Consumer confidence in China has dropped, month-over-month, about 4% to below 120 for the first time since last September.  While the 118 range is still a strong positive number, the decline says something is making Chinese consumers pull back.  One month does not make a trend, so it will be important to watch the next couple months before coming to a conclusion.  In other sectors we have seen significant spikes or declines that have corrected themselves in the following period. It is important because consumer positivity is central to the new Chinese economy and to marketers’ success.  Sources: Tradingeconomics.com; Nat’l Bureau of Statistics, China

AI’s Marketing Transformation Promise

More Change

Content creation is the natural first thought when it comes to AI’s usefulness in marketing.  But beyond the efficiency of more content without adding headcount, there are several other efficiencies that AI brings to marketing.

Applied audience segmentation is central to AI’s more sophisticated promise.  Knowing the specific person being targeted is far more compelling than knowing a broad demographic segment or a broad behavioral pattern.  With specificity a message can be engineered from a general target to a direct target, marketing campaigns can be adjusted on the fly and conversion rates can be increased dramatically.  Knowing a specific customer allows for content constructed to build brand loyalty and trust.

The promise is intriguing, but its reality is a way off given that the programmatic revolution, which precedes AI, has yet to be fully integrated in the marketing suite.  Source: Clickz

Porsche’s Winning China Strategy

Porsche Ownership

 

China has been Porsche’s number one market for the last three years.  It is not by accident.  They have done it with sexy cars and by…

  • Establishing Porsche Club China in Shanghai, Shenzhen and Changzhou, which recruited 2,600 members in the first year.
  • Opening the company’s sixth worldwide Porsche Experience Center in China as a destination to give non-owners the Porsche experience.
  • Creating a series of special pop-up events in places like shopping malls to get closer to the people.

The company’s China future sees an innovation lab in Shanghai to better understand the Chinese consumer and an alignment with China’s national goal “to increase sales of new-energy vehicles 10-fold to 7 million units annually by 2025, including plug-in hybrids, pure-electric and fuel-cell vehicles.”

Next year the all electric Porsche Taycan goes into full production as part of the company’s $6.9 billion investment in “e-mobility,” which includes home-charging and Porsche-branded fast-charging facilities in China.  Source:  South China Morning Post

Time to Budget your next Ad Tech Upgrade

Challenges to Real-Time analytics

If you read the advertising trades you could get the idea that cutting edge ad buying is in common practice.  Not so.  Based on a recent survey of a worldwide collection of 560 marketing professionals the talk is ahead of the reality.  There are a number of impediments to advanced programmatic.  According to this survey it’s both hard and expensive to upgrade legacy systems and practices.  And while practices are slow to catch up, the technology continues to move forward, which only puts late adaptors further behind.

The next big strain will likely come next year with the release of OpenRTB 3.0.  It is not backward compatible, a fact that suggests the time for the late bloomers to get back in the game.   Source: eMarketer

May Bad, June Good

Retal Sales Jun-18

Apparently May’s number was an anomaly.  At 0.31%, growth in May registered the slowest retail sales increase in the two years we have been tracking it.  There is no obvious explanation for the decline because related numbers like consumer sentiment or consumer prices held steady at good levels through the same period.  Meanwhile, June saw a return to the best growth number for the first half of 2018.  All’s right with the world again.  Source: www. Tradingeconomics.com; National Bureau of Statistics of China

JD.com, a Worthy Number Two

JD plus Google

While we focus most of our attention on Alibaba, China’s giant online retailer, JD.com is its worthy competitor with about 25% of the market and impressive strategies for staying in the game.  One of those strategies is to reach deep into China’s hinterland.  The company is aggressively building its distribution in rural China by adding 85,000 logistics people to both deliver for and promote the company.  This tactic is changing the long standing pattern in which rural young people migrate to large urban centers for work.  The dynamic shifts when there are jobs locally and when the naturally skeptical rural folks trust a local company agent.   JD.com is also testing drone delivery.

Enter Google, which cannot plant both feet in China because of government restrictions, but which can invest in Chinese companies to establish a minority beachhead. The American company is investing $550 million in JD.com to support their strategy and to counter its ever expanding direct rival, Alibaba.   Source: Axios

Viewability: The Controllable

Moon

Ad viewability is a controllable element in an environment that often limits an advertiser’s ability to control results.  It is hard enough to turn a request into an impression without imposing extra burdens on the process.  The rule of thumb is that “around 53% of all served ad impressions go unnoticed by users.”  Heavy banners that take seconds to load or video ads with elongated upfront rolls get dumped before they are seen and cause viewability to plummet.

Advise: Lighten the load.  The pressure is on creatives to write for the medium as Marshall McLuhan might advise.  For static ads like banners, remove the filigree, trim it down to the basic message so it loads fast and keep video ads down to six seconds so impressions are delivered not bounced.  Particularly in a mobile world – less is more. Source: eContentMag.com

China’s Second Quarter GDP Slips One-Tenth

China's GDP - Q218

 

China’s reported GDP hangs in through the second quarter.  A one tenth decline is not an alarm bell; actually it is not a bell at all.  The internal numbers showed the economic balancing act that is China today.  While industrial production increases were down to 6% from 6.8% in May, retail sales increases were up to 9% compared to May’s 8.5%.  Sources: Trading Economics; National Bureau of Statistics, China

AI isn’t Magic

Magic

Applying AI to your first party data can be a winning strategy as long as your approach is consistent with the realities of AI. It’s not magic.

First, AI isn’t an instant fix, machine learning – at the heart of AI – takes time.  Loading data and modeling it will yield results that will get better and better over time.  But that will only happen if goals and measurement criteria are carefully prepared in advance.  It’s like A/B testing.  It takes effort on the front-end to gain advantage on the back-end. And human monitoring must be a part of the equation. You cannot leave it all to the machines.

Finally, AI must be viewed as a tool for better marketing rather than a threat to marketing jobs.  Naturally, job requirements will adjust to the new technology as is always the case.  Source: AdExchange

Women Central to China’s Cultural Change

Chinese MarriageDemographic and social forces are at play as past practices like China’s one-child policy and traditional thinking butt up against newer, more independent values in China’s still evolving modern culture.   The remnants of the one-child policy and its over-valuing of male children have led to fewer marriage-age women in the population.  This cultural change, as more women are educated and go abroad for education, has given women a sense of independence and power in the male-female dynamic that never existed before.  As these women have become financially independent they are less dependent on men.

Result: Shanghai’s marriage mall where on the weekend you can find desperate, traditional mothers with placards hawking their eligible, adult daughters for marriage to single men who may be passing by.  Source: NPR