Encouraging the Next Jack Ma

Schoolroom

Chinese Schools are changing from the bottom up. In 2010 the government released a 10-year educational reform plan that’s slowly seeping out to the masses. It is intended to change the massive Chinese education machine from a ridged, pressurized, rote memory challenge to an exploration of knowledge that is more prevalent in the best of western schools. It is the kind of learning environment that fosters creative thinkers.

To understand the change one must envision the classroom like the one we all experienced in which the teachers was in front of rows of students. But add to it the image one in which the highest ranked kids are in the front rows and the slower learners are in the back. Class rankings were posted. Imagine an alphabet of 10,000 characters, 3,500 of which must be committed to memory by middle school. It is hard to imagine a better way to squeeze the thrill of learning out of children and a way to demoralize the kids in the back of the room.

Today, as a result of the new approach, some schools are able to build up to 20% of their own curriculum. The eight hour school day, followed by tons of homework, are being peeled back and class sizes are being limited to 25.

The goal is long-term and strategic. Develop a sub-population of entrepreneurs. Change China from a country that follows orders to one in which some people are free to create new commerce. These changes are predictable and are welcome, still China is not a liberal democracy and it is moving with caution.  Source: New York Times

 

53% of Advertisers View Agencies as Untrustworthy

Advertiser v. Agencies

 

The programmatic world is relatively new and, like in other spheres, the newness imposes relationship adjustments for both advertisers and the agencies they engage.  A survey of more than 200 programmatic marketers from across the world reveals the breadth of the required adjustment.

Stark reality: A majority of advertisers do not trust their agencies.

Martin Kelly, CEO and co-founder, Infectious Media, the author of the study prescribes the following, “Advertisers could – and should – begin demanding a better deal, which means revisiting contracts and inserting audit clauses, or switching to partners that grant full data access. For agencies, there’s an urgent need to proactively address advertisers’ concerns by offering full transparency and working with partners that can effectively prove the value of programmatic.”

Source: Exchangewire

Outlook Flat

China Leading Economic Index -Sep-17

 

To project the economic future of the Chinese economy a group of eight indicators that represent a broad range of sectors are combined. The pattern for the last four months has been relatively flat with only a 0.2% variance from highest to lowest.  September’s move up to zero from -0.1% is better than moving the other way, but not all that significant, which leads to the conclusion that the outlook is flat. Source: Trading Economics; National Bureau of Statistics, China

Programmatic Buying to Increase 31% by 2019

Digital Ad Projections

 

The newest study by eMarketer projects 2019 digital display advertising to reach $54.7 billion, a 31% increase over the 2017 projection. More impressive is the expected increase of 40% in programmatic ad buying as a percentage of the total in the same time frame.

A subset of these numbers reveals that 80% of programmatic ad spending in 2019 is expected to be chasing mobile placements. In addition, 77% of video ad spending will be pushed through programmatically.

The lesson: In spite of issues like transparency and ad fraud, programmatic is likely to continue its growth. Still, it’s vital that the issues of transparency and fraud be dealt with in order for the projections to be realized.  Source: eMarketer

415 Million Chinese Millennial Consumers

Chinese Millennials

The 415 million Chinese millennials may be the most sought after consumer population in the world.  They are active and hungry for more – perfect consumers.

Five Point Profile:

  • The oldest of this population, those born in the late 1980s have seen China grow from a poor country to a prosperous country while the youngest have never known austerity – they want it all, now.
  • Another area of departure between the older and younger generations is the contrast between national pride and cultural identity verses the broad interest in the world, which makes them travelers and students abroad.
  • On the whole Chinese millennials are mobile, their lives are bound up in their smartphones – from purchasing to paying, it is all carried in their pockets.
  • Sharing is also a common part of their lives.  In the west it’s Uber and AirBnB, among Chinese millennials one shares a rental in order to have luxury experiences or start a business.
  • Chinese millennials are no longer the naïve consumers of China’s pre-millennial generations. Still their national pride drives a desire for local products, which means that for imported brands to succeed they need to be integrated into the local culture by using local brand ambassadors and social media in the Chinese way.

Source: ZeitGuide

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