New Media v. Old

US Advertising 2017

 

A telling story is visually obvious in this graph. New media is growing and old media is not. And the older the medium, the worse it’s doing – newspapers and magazines are under-performing verses radio and television and they are under-performing next to the only positive, digital.  Source: MediaPost

Disaffected Chinese Youth

Disaffected Youth

At 23, LI Tianyou, a high school dropout in China has found his calling. He has become an internet star with 22 million followers by expressing through rap raves a frustration felt by many young people who are feeling left behind by the driving forces behind China’s raging Chinese economy.  Mr. Li “considers himself a champion of the working class and regularly rails against what he sees as elitism in cities like Shanghai and Beijing.” Sound familiar?

Apparently, festering anger against the elites and big cities that we see bubbling up in the US, France and Germany exists in China too.  By the way, Mr. Li also raves about women who don’t appreciate high school dropouts. His most successful song is “Listen Up, Women!”  Maybe there’s more going on there.  Source: New York Times, (Picture is not Mr. Li)

The Six Second Messenger

Stop watch

YouTube’s chief business officer, Robert Kyncl, had to go to Germany to make a very revealing statement about video advertising.  He said there has been a 70% increase in six-second video ads in the second quarter of 2017 compared to the first quarter. The quick increase is one thing, but one wonders how it took so long for advertisers to figure out that people want to get to the video they chose and that long ads riled the audience.  It’s as though advertisers never use the medium and therefore, don’t realize the intrusion a long ad represents.

Fox Networks Group is described as “aggressively pushing six second ads” because they too realize the value to the audience.  We’d like to see research to judge effectiveness of short-form ads compared to longer ads. Source: broadcastingcable.com

The Most Boring Graph in History

china monthly retail sales

In our ongoing battle to grab attention, we insist on publishing the results of the most boring graph in the history of the world, China’s monthly retail sales growth. Every month since June of 2014 it has increased in its slow, but consistent climb upward.  We publish this graph because it is a testament to the valued Chinese consumer and because we believe that some day it will decline and we want to be here when it does.

Source: Trading Economics, National Bureau of Statistics, China

Facebook’s Patient Persistence in China

facebook APAC

Following Facebook’s quiet attempts to re-enter China is a study in patient persistence. We have seen Mark Zuckerberg’s personal diplomacy including learning the language and using it at local appearances.  Recently the company’s photo app, Moments, was launched in China through a local partner under the culturally friendly name Colorful Balloons. Though Facebook itself has been banned since 2009 for political reasons, the government seems to be letting Colorfull Ballons fly for the time being. The latest report is that the company is searching for office space in Shanghai.

Facebook’s desire to get back into China is obvious given the size of the market and given its absence relative to other Asia-Pacific counties. A Kantar TNS study shows that Facebook is the most used social network in the region with an average usage of 83.5% in 15 Asia-Pacific countries.  By comparison, usage in China is estimated to be a mere 19% and those users are circumventing the government with VPNs.  Source: eMarketer.

Trying to Keep Up: Advertising of the Future

advertising future

As if the evolution of modern advertising isn’t moving fast enough, here’s a projection into the future.  The five most likely new areas for advertisers according to MarketingLand, are as follows:

 

 

  1. Smart home devices are not yet mediums for advertising, but that may not be for long.
  2. The sharing economy in which companies like profitless Uber see revenue by running video ads in the same way taxis do.
  3. Virtual reality (VR) offers car companies the possibility of a virtual driving experience in an experiential ad.
  4. Augmented reality (AR) offers an extreme shelf-talker as you walk down the aisle of the supermarket and a discount coupon pops up on your glasses
  5. Connected and self-driving cars are already Bluetooth enabled and once the self-driving car becomes a common reality that Bluetooth connection could deliver content and advertising to the relaxing rider.

Two questions; (1) At what point does the user of these devices reject the constant intrusion? (2) What’s the over and under that any of these new ad availabilities will come to fruition?   Source: MarketingLand

Smartphone Subscriber Growth in China Remains Consistent at a Slower Rate

china mobile carriers

With an addition of almost nine million new 3G/4G subscribers in August, replacement growth in China continues, but at a slower rate then we have seen since the beginning of 2017.  Through the first eight months of 2017, growth has averaged 5.98 million new smartphone subscribers per month verses an average of 21.65 million per month in 2016. Perspective: 1.1 billion smartphone subscribers in China is easily twice that of European and the US combined – a ginormous advertising market.  Sources: China Mobile, China Unicom, China

AI Adaption Will Lead to Programmatic Nirvana, Eventually

adaption

Artificial intelligence firm GumGum surveyed marketing and advertising executives in June 2017.  The result is an optimistic view of AI’s current adaption.  The data suggest that 55% of marketers use Chatbots while 77% use predictive analytics and auto-personalized content, some are more committed than others. From our perspective, those numbers seem more like wishful thinking.  After all, we have watched as it has taken several years for programmatic technology to be widely adapted and still, it hasn’t been fully exploited.  To argue that AI has already made the penetration rates suggested in these data seems to be a stretch.  The time will come for AI and programmatic advertising will benefit from integrating predictive analytics, but for now it feels like we are talking near to mid-term futures rather than existential reality.  Source: eMarketer

Consumer Prices Reflect Higher Costs at Manufacturing

china consumer price index

Last week we noted a hint of inflation in both manufacturing and non-manufacturing sectors of the Chinese economy. The higher costs are translating to the consumer side as the Consumer Price Index continues its six-month rise back toward last year’s high. Still the level remains slightly below its level from September 2016.  Sources: Trading Economics; National Bureau of Statistics, China

China’s Service Sector Softens

china caixin

Though overall business confidence has remained strong; there was a notable softening in the service sector in both July (-0.7%) and August (2.0%).  The chief cause for the decline was slower overall domestic and export orders.  Here, as well as in the manufacturing sector, employment declined for consecutive months. An inflation indicator can be seen in the second monthly increase in selling prices.

Sources: Trading Economics, National Bureau of Statistics, China