Follow the Money

Quarterly Ecommerce - Q217

Sitting in the west, the dominance of Amazon is felt daily.  The view from China is quite different.  There Tmall by Alibaba and JD.com represent 84.2% of the market while the remainder of the market is made up of more than eight smaller players including Amazon at a measly 0.9%.  It is a example of China’s singularity.  In the biggest digital sectors – search and e-commerce – they separate themselves from the rest of the developed world, which explains the challenges in trying to penetrate that lucrative market.  Sources: eMarketer, International Enfodesk

China’s Programmatic Future

Programmatic Spend in China

 

Two things are sure in the Chinese advertising sector as we look forward. Programmatic will continue to grow and mobile will take an ever-increasing portion of programmatic ad spending. This trend reflects the continued sophistication of the Chinese ad market, which is still playing catch-up to the west, but it is on the road to equivalency.  And given a territory with over one billion mobile subscriptions, it should not be surprising that mobile is projected to take a larger bite out of the apple.  Source: iResearch

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)

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

Mobile Header Bidding on the Rise

header bidding

Header bidding is a growth industry, especially if it’s of the mobile variety.  PubMatic’s Quarterly Mobile Index reveals that while “desktop header bidding remained dominant, mobile header bidding grew by 285%.”  Mobile header bidding growth contributes mightily to the almost equal increases in both overall impressions (149%) and eCPMs (150%).  Further, the 92% increase for mobile header bidding in the Americas points to the source of the growth.  Source: The Drum

Changing Purchasing Patterns among Wealthy Chinese

impulse luxury

A study by McKinsey identifies an interesting change in luxury item purchasing patterns among wealthy Chinese.  They are becoming more impulsive and that adds wait to first impressions.  The data show a significant increase in single day decision making – a measure of impulse buying – among these folks. “Wealthy Chinese consumers are heavy spenders, spending on average RMB 71,000 ($10,846 USD) annually on luxury goods; 38 percent of them spend more than RMB 100,000 ($15,281 USD) annually. This number has been increasing by more than 5 percent a year since 2010.”  Selling strategists for luxury brands would be wise to take this change into account.  Source: McKinsey & Co.

Machines to Take Over Radio Advertising

programmatic radio buying

If the projections drawn from this survey of 9,000 advertising, media-buying executives and radio industry professionals are correct, the swing to programmatic buying of radio will solidify in the next twelve months.  Fully 87% of those media buyers will make the programmatic move.  That’s a 57 point increase over current practice.  As always there are lagers – 13% will not give into the machines.  Source: MediaPost

Movie Grosses Up

top 10 movies

Western cultural influence continues to penetrate China as six of China’s top 10 films in the first half of 2017 originated in the US – this in spite of the government’s entry limit of 34 foreign films per year.

Notice the kind of movies that succeed tend not to be romantic comedies or serious dramas.  One wonders how their movie choices influence Chinese perceptions of the west.  Movie grosses increased 11.2% over the same period last year.  Source: China Daily

China’s eCommerce Market Leads the World

share of ecommerce

New numbers from McKinsey reinforce the notion that China’s digital presence in the world is mighty.  With 42.4% of the global transaction value generated out of China, the country dominates even the US.  And mobile is at the heart of China’s e-commerce business with 68% payments made via mobile, as compared to the US where mobile digital payments represent only 15%.

McKinsey analysis offers three reasons for China’s powerful digital presence in the world:

  1. The bigger, younger Chinese market is enabling rapid commercialization of digital business models on a large scale.
  2. China’s three Internet giants (Baidu, Alibaba, and Tencent) are building a rich digital ecosystem that is now spreading beyond the country.
  3. The government gave digital players space to experiment before enacting official regulations and is now becoming an active supporter.