Instant mobile messaging, social networks and China.

Since Kaiser Kuo was referring to a note I wrote for the Facebooks users and since not all of you are on Facebook yet, please find it here ...

Link: Facebook | My Notes.

China Leads the US in Digital Self-Expression

Luckily there are some journalists here in Shanghai turned into bloggers, turned into business men who read a massive amount of online press-releases. Fons Tuinstra is one of them. Even on a warm and sunny weekend he is digesting a lot and takes the time to write about it. . This time it's really a gem that hopefully influences the willingness of marketing directors to start using the web more than they do now. The study he refers to is even done by JWT ( one of the 4A's here too) and discovers what lots of people already felt here. If you don't take the time to read the China Leads the US in Digital Self-Expression
you probably miss facts and figures that will help you to change your mind.
One of the mistakes though in the article is that there are 137 mio internetusers in China whereas the most recent figure is 172 mio.
I'm also wondering why - at least in the press release- there's no mentioning about how Chinese internetusers relate to brands by using the web. Did JWT not ask these questions or have they not been reported. If they have some data on this topic it  would be nice to compare them with the results of our study.

Chinese trust the Internet above ALL information sources, including MSM

Thomas Crampton:
"Chinese trust the Internet over mainstream media and all sources of information according to a study done by Harris Interactive for Edelman. Why? Imagine this has a lot to do with censorship. Also note that Chinese trust Foreign Media more than Local Media. In what may be a related finding, the Chinese claim to be the region’s most avid writers and consumers of blogs. A nuance on Chinese enthusiasm for Blogs, I have been told that much of the Internet discussion takes place in bulletin boards that provide a modicum of anonymity, rather than actual blogs." Chinese trust the Internet above ALL information sources, including MSM.

My Radio Interview with Christine Lu.

She's all the way back in the US but has an ubelievable sensitive finger on the pulse on everything going on in China. Listen if you want to ...  Doing Business In China: China Business Information Podcasts News Trade Shows Consulting China: 中国 - i-merge, Boondoggle Survey On Recommendation Behavior of China's Internet Users.

The changing face of advertising in China ...as seen by Ashok Sethi.

Reading this article early this morning, I wondered when China Daily will ask some of the Chinese interactive leaders to write about advertising. The author of this one is a TNS big shot in Asia Pacific. A researcher. The article gives a superficial overview of what he thinks to be the changing face, but he clearly is not aware of the landslide going on:  advertising is not "changing face", but "losing face". You can continue to call it a change, but that's a suicidal euphemism. It's also not a phenomenon which is uniquely Chinese, but intensely global.

But nevertheless I want to share with you the most funny part of his article in which he comments on the discovery that Chinese consumers are human beings. A great discovery indeed. Read it here. The changing face of advertising in China: "It was earlier thought that Chinese consumer is a simple soul and can't understand the subtlety of soft and clever advertising. Direct communication of the benefits in unambiguous terms was considered the safest route of communication. As a result, while advertising in many other markets is as much entertainment as brand communication and attempts to engage the consumer through subtle creative devices, in China it is often a direct onslaught with the core benefit - often repeated several times within the same advertisement. However, research in China shows this direct approach does not have to be the one that an advertiser needs to embrace to succeed. Emotional advertising works and so does humor, endorsement or any of the other genres of advertising practiced elsewhere."

A Word of Mouth lesson from China. By CIC.

What CIC is doing here in China is not only relevant for China or in this case for the car industry but for the whole marketing world. They report very frequently about this shift going on from dumb & passive consumers to interactive and hyperactive influencers who stimulate the debate, set the agenda ....give recommendations and in the end probably influence sales more than any cold medium has done in the past. Human beings are warm media. They can be trusted. Sometimes. Download the report here: CIC: the China Internet Word of Mouth (IWOM) research and consulting firm covering blogs and BBS (online message boards).

Mont Blanc Splashes Some Cash In Shanghai

Link: Mont Blanc Splashes Some Cash In Shanghai | All Roads Lead To China.

" ......where this gets mind boggling is that it turns out they are paying 11USD/ meter/day.  that is 11 USD … PER METER… PER DAY. Now, at 800 - 1000 meters of space, that adds up to a whopping amount of rent every month that I would guess is over 250,000USD a month … "

The Recommendation Phenomenon in China.

Yesterday I published the results of the i-merge/boondoggle research on media - usage and brand recommendation among Chinese internet users. A few hours later Kaiser Kuo (the MasterMindedModerator of Ogilvy Beijing) posted some remarks on "his" Ogilvy blog and Sam Flemming (Measuring the Immeasurable) of CIC-data replied in long and in large. With these two heavyweights firmly on board we hopefully can speed up here in China.

Prof Dr Reichheld himself (I was his first follower :) will also be in Shanghai tomorrow. I sent him our results too and hopefully we can shake hands with him. That's what he promised me in his reply. Maybe he should stay longer in China and help us to convert more marketers. Read Kaiser's and Sam's interventions here: The Recommendation Phenomenon in China.

Chinese companies should go global.

The CEO of Haier is an alternate member of the 17th CPC Central Committee. Indeed the party is open to some rich entrepreneurs. The CEO was thrilled during the recently held Congress because president Hu encouraged openly China's big companies to go global. The Haier boss said that just working for foreign companies as an OEM should not be a long-term strategy. In his mind - and he's probably damned right - "there will be only two types of firms in every industry in the future: Enterprises with global brands, and those working for them". The last ones ...  would only just be able to make ends meet. That's why Haier (and many more of the yet unknown brands) will grow into a world-famous brands.

Link: Haier CEO: Party congress report encourages companies to go global.

Marc van der Chijs' sharp pen.

Marc is a very sharp observer of things happening in China. Also things that go wrong. Unlike many others he never shuts up when really bad things happen to him. His recent experience with China Eastern again proves what a long way the service industry has still to go before they will make the Chinese consumers (and Marc) happy. Link: Marc van der Chijs' Shanghaied Weblog: China Eastern flight cancellation.

Shaun Rein on "The Key to Successful Branding in China"

The mistake that Clarins has made is to use models for their advertising campaigns to whom the typical Chinese male cannot relate. Already nervous that caring about their appearance means that they are not manly, Chinese males have been put off by Clarins' advertising campaigns. To advertise male grooming products, Clarins chose ethnically diverse, metrosexual models that presented an image most Chinese men could not identifiy with. When viewing ads, potential buyers were confused as to why and how they would want to look like the models using Clarins products.
L'Oréal has been much more successful recently through its choice of Korean movie stars for its male cosmetic brand, Biotherm. These Korean stars exhibit a look, style, and personality that Chinese men aspire to and that Chinese women wish their boyfriends would exhibit. Clarins is not alone in portraying its brand in an odd light to Chinese consumers. Too many brands launch advertising campaigns centered around preppie blond models lounging on sailboats. In a country where sailboats and the Hamptons are not in the popular imagination this advertising tack does not work.Link: The Key to Successful Branding in China.

Search in China is Chinese!

One year after its grand opening I was finally at the offices of Boondoggle Belgium. A great place to work. I'm really  proud of what the team realized during my almost 2 yrs in China. I didn't stay that long (everybody seemed to be working very hard)  but of course people ask  you many many questions on the China-adventure. With Uber Facebook Wim Lockefeer we talked about search engines in China. Amazing how China continues to beat the US. These figures are the latest ones. According to China Internet Network Information Center (CNNIC) 74.5% users take Baidu (Chinese!!)  as their primary search engine. Google China’s market share slipped  is significantly from 25.3% to 14.3%. The numbers in the graph are from CIC - another researcher. More information you can find here.

jevedebe on an internet radio ... about China

Christine lives in San Diego. She runs the China Business Network overthere. We met each other on Facebook and she decided to interview me for her internet radio. The result you can hear here. It was 6am in Shanghai and 3pm (a day earlier) in San Diego. LISTEN: The China Business Network - Podcast Directory, Blogs, News, Conference and Trade Show Updates For Doing Business In China - An Introduction To i-Merge.

"Design not China blamed for toy recalls"

The title in the final FT-edition was somewhat different ("Backing for China over toy recalls") but the message is clear.
"Professor Paul Beamish, from the Richard Ivey School of Business, and Hari Bapuji, at the University of Manitoba, analysed 550 toy recalls made in the US since 1988 and found that more than 75 per cent were due to problems that could be attributed to design flaws. Only about 10 per cent related to manufacturing defects. "Are there problems in China? Definitely," said Professor Beamish. "But is China the primary source of these recalls? No, it isn't."
And the executive vice president international with Mattel, said on Friday: "We have actually manufactured fun and safe toys in China for more than 20 years and the issue is not about China. Companies make products, not countries."

The futur is no longer orange, it’s led.

In Flemish we say: ‘Rare jongens, die Chinezen’ (‘Funny chaps, those Chinese’). Want proof ? On the ceiling of a new shopping mall in Beijing they installed a 30 by 250 meters LED (no-no, not red) screen, at 25 meter above your head. Lay back and enjoy!

Hat tip & extra info: gizmodo

In China too govt bloggers' followers just a clique away

Some government officials in China are successfully blogging. "The direct interaction between bloggers is one of the most appealing elements about this form of communication" says the China Daily. " ... {blogging} provides a prime example of a form of "direct democracy".
Some of these bloggers - like a high ranked health official - are even very outspoken: "On Monday, he posted an article by an anonymous doctor which blamed China's apparent failure on medical reform over the last 30 years on the lack of fair pay for doctors. "Govt bloggers' followers just a clique away"

Facebook in China

I've been looking at Facebook recently. For many hidden reasons. One of them is that there are indeed already a few 10,000 persons who joined the group "China". Some foreigners like me. Lots of Chinese too. Recently Chinese newspapers too start writing about it :"Facebook is now open to users outside the US, and young Chinese are joining up fast" What's the next phase here? I don't know. Seems to be bigger than anything that happened before in that field. I've been on so many of them. eWorld of Apple was the first back in 1994. I was the only Belgian at that time. The last non-business one was Orkut. I gave up. Not more than a hot picture gallery at that time for Brazilians. Facebook seems to be different. It's as addictive as the others and a lot better too. It could also become a valuable corporate tool. Like email. The proof? Facebook - it is said-  costs Australia $4 Billion in lost productivity. And in the US  45% of workers recently surveyed indicated that their employers block access to Facebook. The other half of the companies look at it as a valuable networking tool. They're right. In China it will be a very valuable networking tool. Chinese are addicted to "being connected". To Guanxi. And ... when these applications move to a mobile platform linked to GPS the sky will be the limit.
Hopefully Facebook finds the solutions to integrate brands in a natural way. Then their future will be rosier than Google. Google links people to content. Facebook links people to people. Guess which of the two is more valuable.

China wakes up (again)

Weeks and weeks I have been waiting to be able to blog again.  I felt soooh lonesome. Now the good old days are back. Plenty of stuff to write about. To think about. To discuss about. Desperately I was already mixing up with the friends of FUTURELAB.

Efluencers in China

Sam Flemming is doing a groundbreaking job in China on IWOM research. Recently he published his vocabulary and his framework. "Efluencers are not just the most active posters, but rather include the entire population of netizens contributing content to their online communities and engaging other efluencers. Are they “representative” of the general population? Absolutely not. Are they representative of the most engaged, most informed, and most connected group that can influence online and offline? Absolutely. And understanding the topics that really drive their conversations, the language they speak, and their interests are essential."

Check your suppliers. All over the world.

Marc van der Chijs did a very thriling discovery recently : "It is not uncommon for Chinese companies to make themselves look bigger than they really are to attract potential foreign customers, by making a flashy site and pretend to have offices at a prestigious address. But yesterday I came across a US company that is trying to do the same."
Read his blog here: Check your suppliers!.  

De Morgen en neuken in China

Omdat de prins der Belgen dezer dagen in China reist en ik hier sinds anderhalf jaar werk, dacht de Morgen dat ik al wel een mening zou hebben over China. Die heb ik inderdaad. Ik heb bijgevolg meer dan uur het lange verhaal gedaan over mijn eerste ervaringen  en Johan (de journalist van dienst) heeft mijn lange preek zo goed en zo kwaad en zo beknopt mogelijk samengevat. Merci.  Maar waarom de titel het genuanceerde verhaal compleet eenzijdig presenteert blijft me een raadsel. Waarschijnlijk om meer bladerende lezers aan te zetten te stoppen en het interview te lezen? Daarom wil ik de Morgen graag helpen en kan u ze hier lezen.   Download demorgen.pdf, Download demorgen2.pdf,Download demorgen3.pdf

$110 in the UK. Only $4 in China!

A few months ago in this blog i was complaining - in a predictive  mood-  about the correct investment of advertising dollars per person in the UK and the very very low figure in China. I guesstimated that:
1.  In 2007 brands in the US will probably invest US$ 70 - 80 per web user (roughly 200m web users)
2. In the UK probably US$ 110-120 per web user (roughly 35m web users). According to WPP’s Martin Sorrell the UK is “the most advanced digital advertising market in the world, with 14 per cent of advertising budgets spent online last year, rising to 18 per cent in 2007”.(Financial Times Feb 23.02.2007
3. In China probably only US $ 4. (roughly 140m web users)

And now the FT of today publishes the exact UK figure : US$ 110 - according to figures released yesterday by the Internet Advertising Bureau Europe and PriceWaterhouseCoopers. The same study estimates that in three European countries the web's share of total advertising expenditure last year exceeded 10 per cent. These were the UK, the Netherlands and Denmark. Good idea to open already our Boondoggle in the Netherlands.

China, een e-trein met 400 miljoen passagiers

We reisden in Tibet een paar weken geleden, toen een Vacature journalist me belde voor een interview over e-marketing in China. De auto was een 4x4. De weg barslecht. De mobiele verbinding goed. De vragen scherp en het relaas correct.  Vacature.com: China, een e-trein met 400 miljoen passagiers.

How Do You Influence the Influencers?

The article  How Do You Influence the Influencers? explains already what we know (the internet of course) but gives some convincing figures for the persuasive power of these evangelists: "Yahoo's study is of interest because of some interesting quantifiable data it presents. It found, for example, advocates have a 2:1 conversion impact across categories. In plain English, that means the researchers found an advocate talking up the virtues of her new car had at least one friend make the same purchase, to the tune of $718,000 in sales. A similarly satisfied non-advocate was responsible for only $502,000 in additional conversions. In consumer electronics, the numbers are even more staggering. For purchases over $300, advocates moved an additional $1.6 million of merchandise, compared to $570,000 attributed to their less vocal, less influential peers.
Advocates also tend to embrace consumer-generated media more than their peers, often to online retailers' advantage. When CompUSA integrated Bazaarvoice's consumer reviews into its product pages, the company quickly found its conversion rate was 60 percent higher for keywords such as "sony review" compared to its more conventional paid search ads. Given advocates review and search more, the results make sense."

SEO in China (2)

Of course, at this famous SEO conference in Xiamen there were not only US-citizens. Gemme , a Dutch "immigrant" in Shanghai who does quite a good job for us here in China was there too and wrote his impressions in 3 articles. article 1 article 2 article 3 . And in few days  his  site will be up and running too: Tiger Internetmarketing

An SEO American visiting China

In his article about his first visit to Internet China Gord Hotchkiss (the president of Enquiro, a search engine marketing firm)  has some fascinating data about the search difference between US and China-consumers. His overall appreciation is very positive: "The Chinese Internet market is like a Beijing taxi: there may be no logic to its route, but it’s sure getting to wherever it’s going in a hurry"  MediaPost Publications - Notes From China - 05/31/2007.

Great Chinese Art in Kassel

Great art of this Chinese artist in Kassel's Documenta 12. It will cost 3.1 million Euro ($4.1 million), which mostly covers the traveling and accommodation costs of the 1,001 Chinese people he will bring there both as spectators and "actors" in a documentary film . Read it here : Once upon a time.

Very very cool idea from Absolut Vodka in Shanghai

We promise to publish some pictures when Asia's first ice bar will open in Shanghai on June 22.. Now it's only words: " About 45 tons of ice to be used to build and decorate the bar arrived in Shanghai this week. It had traveled some 30,000 km from the Torne River in Sweden, which lies 200 km inside the Arctic Circle. The bar will be located on Central Huaihai Road at Infiniti Plaza. Once completed, it will measure 100 sq m and be able to accommodate 60 customers at a time." In the meantime you can have a look at the London Icebar. Or even visit it when you're nearby.

143,129 advertising agencies in China?

The figure is in China Daily . It sounds unbelievable but it could be true. This huge amount is good and bad news. Bad news because we have to beat 143,128 competitors to get a client. Good news because there's still plenty of room next to WPP, Publicis, Omnicom, Interpublic, Aegis and Havas. The Big 6 together billed USD 195.06 billion in 2006, which is only 32.5% of the global adspendings. The day that one of these 143,129 Chinese agencies will be a Big 6 too, is not  that far away. Even Microsoft joined last week after the Razorfish take over. Times they are changing. Really fast these days.

The potential for digital, interactive in China

Of course there aren't 1.3 billion consumers in China. There's a "survival China" and a "consuming China". The consuming China is still relatively small as % of the total population (specialists mention 12-15%). But in absolute figures it is massive. 150,000,000 at least. These spending, consuming, car buying households are probably all on the web through a  broadband home-connection. Have a look at both graphs and re-read this blogpost of two months ago.

Brave new Interfaces published

A year ago i was one of the speakers at the Brave New Interfaces conference in Brussels. My topic was POWER TO THE PEOPLE. Now the book with all the (visionary) interventions is ready. Brave New Interfaces is a very valuable idea of  CROSSTALKS:  the industry and university network of the Vrije Universiteit Brussel (VUB). Launched in 2003, it acts as an open and interdisciplinary platform to discuss policy-probing issues. CROSSTALKS manifests itself by interweaving practices            from various scientific disciplines, different innovative companies and the art world.  For this conference Marleen Wynants and her team gathered key people from the European design, architectural, art and academic and corporate technology-driven      worlds to reflect on the meaning and impact of existing and future interfaces – and on what the added value could be.You can order the book here.

vp marketing >< cmo

Emergence Media points at three trends affecting marketing these days. The number one and three we covered already quite well. The 1st is about the long tail and the 3rd about the social media affecting all interactivity between brands and consumers. 
The 2nd however is newer in i-wisdom. It's about marketing as a revenue driver rather than cost center and by consequence the promotion of marketing chiefs to a real C- and even Board level "helping shape product development, internal culture and budgeting". Great to hear that.

Interactive Outdoor. The next pillar.

Since the beginning of the web in 1994  we've been saying that the digital MERGE of the once separated triplet of media, telecom and IT  was waiting for the fourth pillar to become fully digital and interactive: out of home media like outdoor billboards and POS. It's about to happen right now. The Washington Post  recently wrote an article  about it: "Nationwide networks of digital billboards and smaller video screens allow advertisers to change their sales pitches instantly, with the click of a computer mouse, from hundreds of miles away. Giant LED billboards rotate ads every few seconds, enabling billboard owners to sell the same space multiple times. And companies are experimenting with WiFi transmitters and Bluetooth technology that would send messages directly to your phone as you pass by their signs."  {{In China - by the way - Pioco is pioneering with that technology. They were the first last year already to use this Bluetooth technology.}} In the US the billboard industry sees huge growth and  skyrocketing profits as a result. Only Internet advertising is growing faster. It will be the same in China. TV-viewers watch TV but skip the commercials. The ever growing private car drivers however cannot skip or zap the digital billboards. "We have the ultimate ability to withstand the whole challenge of consumer avoidance. We're there 24-7. There's no mute button, no on-off switch, no changing the station." says Paul Meyer, Clear Channel Outdoor's chief executive.

Consumers generate great content.

Trendwatching of this month  is a good read. The title sounds political, but the article is about consumerism. Consumers reviewing stuff. And writing about  it . Which IS political in a sense: "Old economy fog is clearing: no longer can incompetence, below-par performance, ignored global standards, anti-social & anti-eco behavior, or opaque pricing be obscured. In its place has come a transparent, fully informed marketplace, where producers have no excuse left to underperform. TRANSPARENCY TYRANNY for some, TRANSPARENCY TRIUMPH for others.". At the end of the article, some i-merge-kind of advice: "Start by figuring out what percentage of your sales/revenues is already influenced by consumer reviews and recommendations. How? Well... Ask your customers! Remember, it's all about the conversation. If the percentage is high, this will give you good ammunition to convince fellow execs to come up with a transparency action. plan ASAP.

P&G&China&Internet&WPP

Mr. Lafley, the big P&G boss,  said that their marketing mix across most of the major brands is clearly shifting from measured media to in-store, to the internet and to trial activity. That's exactly what we think EACH FMCG brand should do.  Nevertheless the proportion P&G spent on TV is still as high as 70% whereas  spending on internet display ads "inched up to 2.1% of its outlay in the first two months of 2007 vs. 1.6% last year". Still not enough of course :). "We are still investing a lot in television, because, especially in developing markets, it's a hell of an efficient investment," . Although they're big TV spenders in China too, AdAge referred to "apparently temporary weakness in Russia and China". Does P&G consider China as a developing country? Maybe. Come and see next quarter.
Sir Sorrell, the boss of some of the agencies working a lot for for P&G is more outspoken. He referred to "a feeling among his clients of rebellion against the high cost of traditional media, particularly in light of its declining audience."  These clients are experimenting (like P&G) because they are "sick and tired of media escalating faster than the general price of inflation,". I love Sir Martin:)

Do you recommend your bank too?

The most important discovery in a recent US research is the very high and very positive correlation between frequency of bill payments and the likelihood to recommend the bank's website. Which means that intensive online  clients  are very likely to recommend the brand to their family, friends, neighbours, In this graph you can see that from a satisfaction point of view, there’s not a lot of difference (76><80) between frequent and non frequent online users. But when you look at the likelihood to recommend the bank's website the difference is huge: 66><82.
So? Don't measure only the whether your clients are happy, ask them how likely it is they will recommend you.

Paul Marsden is a Doctor. They know!

Paul Marsden from LSE is also a Reichheld lover. Like me. But he's a Doctor and i'm in China. That makes the difference. So please read his article and fully believe his words "... successful advertising is advertising that targets Promoters and gives them a reason to recommend your product or service to friends and acquaintances. Rather than inform the uninformed, persuade the unpersuaded, or remind the un-reminded, the essential task of advertising should be to activate Promoters into recommending". Dr. Paul Marsden, LSE: NPS and Advertising: A Message from the President.

A special Special in the Economist

Not only consumers hold conversations about brands (that's where the real value of a brand is - BTW !) but objects go the same way. I remember the days of Glory back in Belgium in 2005 when I won a public speakers' contest with an over-passionate & rhethoric pro RFID-speech, but be sure the day of talking things is coming near. New wireless technologies will link not just people but lots of objects too. Again a new world is opening up for the brands. It never ends. Bad news for those who already lag behind.  They're even not yet used to the previous new world. A world of connections | Economist.com.

Wake-up call to Chinese firms on power of brands

Chinese manufacturers who want to build Big Brands call us :) Lots of Chinese companies struggle with their branding activities. They don't get it yet. Again and again they refer themselves to this lack. Read it here.  Wake-up call to Chinese firms on power of brands. "Much has been said in recent years about the importance of brand value at various seminars and business forums. But the message has been slow to reach Chinese entrepreneurs, preoccupied as they are with quick and easy profit." ...."

Most Chinese entrepreneurs must have realized by now the importance of brand value. The question is, how many of them are willing to invest time and money to create value for their brands, when manufacturing under contract for foreign companies is so profitable.

"..."

In their relentless pursuit of short-term gains, they run the risk of missing the potentially bigger opportunities arising from the explosive growth of the domestic consumer market as a result of the rising income and expectations of the people, especially in the urban areas.

Retail experts have noted that in a maturing consumer market like China, branding counts more than in the US or Europe.

In China, the best known brands in a wide range of consumer products, including clothing, electronics, processed food, beverages and cosmetics, are mostly foreign-owned. Only, perhaps, in white goods, or consumer durables, can Chinese manufacturers claim some success in the branding game."
There are also other stories of Brand Glory. Read here the story of Zhou, founder and chairwoman of Neoglory Group (they have China's largest production capacity for costume jewelry : "Like most business people in Yiwu, I used to focus on how to attain a
greater volume in sales. But now I care more about how to build Neoglory into a well-known, lasting
brand"

Chinese partner attacks Danone

Says the Financial Times of today: " ... China's largest drinks maker, launched a blistering attack with nationalistic overtones on the French dairy and drinks group. In an interview given to Sina, one of China's leading internet portals, Zong Qinghou, founder and chairman of Wahaha, said Danone did not understand China or Chinese culture. "I told them the Chinese have stood up and the era of invasions by eight-country armies is long-gone," he said, referring to a military campaign in Beijing by colonial powers in the 20th century" This Mr Zong is one of the richest men in the country!

Big (B)ad agencies?

The future is bright for shops like ours. Fewer than 10% of the Chief Marketing Officers recently polled in the US "seek to partner with large advertising agencies for their online marketing. Instead, the majority of senior marketing executives show a strong preference for blended firms - firms with roots in technology that can also offer creative and traditional print expertise. Even more (68%) prefer to work with multiple agencies, in order to derive the benefits of specialization." Center for Media Research - Daily Brief.

"Chinese consumers depend a lot on word of mouth and a circle of trust when choosing products"

Shaun Rein (he did it again) wrote a encouraging article for the whole internetmarketing industry in China. Read it here completely Online Campaigns: The New Way Marketers Can Reach Out to Chinese Consumers. Or read the cherries I picked for the "busybusy" readers of this blog :
1. "The average amount of time people spend on the Internet in China has risen to 17 hours a week from 10 hours in 2002." This compares with just 13.9 hours a week in Japan and 11.7 hours in the United States.
2. Consumer activism and sharing of information is extremely important in China and is a key factor in why so many people reach out to blogs and BBS. Zhang Junni, a professor from Beijing University's Guanghua School of Management says that "The Internet is a platform via blogs and BBS where Chinese can go to share opinions, and people can get trustworthy information."
3. (....) Chinese consumers often trust the opinions of bloggers and BBS posters more than they do the traditional media outlets. Zhang highlights the importance of incorporating Internet advertising into ad planning, noting that "There are several reasons Internet advertising is especially effective in China. First, there is a lack of ethics in many parts of the Chinese business community. For example, there is a lot of abuse of consumer trust in the food and drug industries. Because of this, people do not trust traditional advertising that much. Instead, they depend a lot on word of mouth and a circle of trust when choosing products."

WEB>NEWSPAPERS in the Uk!

In the Financial Times of today it is said that "Internet advertising revenues have for the first time overtaken those from national newspapers (...) UK-based internet advertising grew 41.2 per cent to £2.02bn last year, compared with national newspapers' take of £1.9bn and declines in television and other mainstream advertising media." The evolution for the rest of the world is very clear. It's also true for China.

The wealthy are on the web - Research - BizReport

"Ninety-eight percent of Americans with incomes of $150,000 or more buy products and services online, 55 percent do so regularly. Nearly all, 99 percent, research products online before they buy." I think the rich in China (1,5% of the households) have the same behavior. Link: The wealthy are on the web - Research - BizReport.

Chinese Internet companies at turning point

137,000,000 Chinese on line. 1000's and 1000's of companies who try to earn money with Big Ideas. But "behind this rosy picture growth in the profitability of many Chinese Internet companies appears to be losing steam: they reported narrower profit margins last year"
This article gives a good overview of the less rosy picture. Asia Times Online :: China Business News - Chinese Internet companies at turning point. (It was once again Jan Jonckheere from Belgium - he reads everything about China- who mailed me the article)

Great from Synovate China!

"Many surfers regard news on the internet as being more trustworthy. Six out of ten surfers in Shanghai consider the web to be the most helpful information source, while TV came first with only one out of ten people. Online media also achieves dominance in terms of being viewed as the most helpful source when making actual purchase decisions in Shanghai (30% for online versus 11% for TV).  In Chengdu, meanwhile, TV remains king, but this is probably because the penetration of computer ownership there lags behind Shanghai. However, the dominance of TV in Chengdu, and other second-tier cities, will be short-lived. Already one-fifth of young adults in Chengdu rate the internet as their most preferred leisure activity, while TV captures the hearts of one-quarter. It is just a matter of time before the internet also dominates TV in most of China's second-tier cities. And once it does, you will see change occurring like a revolution--in media, commerce and culture."
AdAgeChina.

KFC now running into "problems" in China.

After the rats in the US (read it here i-wisdom: Can rats in NY ruin a brand in China?) now KFC has some problems in China :"Kentucky Fried Chicken, the US fast food giant has again sparked food safety concerns around China, with its outlets being accused of repeatedly using same frying oil for as many as 10 days, which experts believe may cause cancer. The Guangzhou-based Information Times reports that KFC branches in some cities in northwest Shaanxi Province have been discovered putting Magnesium Trisilicate into frying oil to prolong its usage. Magnesium Trisilicate is a white, odorless and tasteless powder, which can decolorize and absorb the odor and some impurities of the overused turbid oil, as well as reducing its acidity and oxidization. After being "polished," the cooking oil is used over and over again for up to 10 days by some KFC outlets in Xianyang city, Shaanxi Province." And again the press writes about it.

Reliable online metrics needed in China.

In a recent article on the dominance of TV-  and webadvertising in China I proved how  irrational it is to overspend in tv and to underspend in webadvertising. There are many reasons for this underspending. One of the them is the lack of trustful metrics and a shared vocabulary. Recently we bought bannerspace on a site claiming they had 180.000 unique visitors per day. When after a few days we looked into our Google analytics figures and our sitemetrics we clearly saw it was 10 times less. Questioning them about all this, they first sent us a nicely made up sheet with false figures to prove they delivered the visitors. When we told them they lied, they said they never told us they had 180.000 unique visitors per day. Which was a lie again. Our question was " On an average day you have several thousands of unique visitors. How many? Count each visitor only once, please." Their answer was 180.000 member/visitors/day. When we referred back to this answer they told us we misunderstood. The member/vistors/day where the registered visitors on the site, but they could not guarantee they would all visit the site every day. Since that day we try to get our money back.
Digital ad spending can only really start here in China when all online media who want to attract advertisers were audited by independent third-party firms. A recent survey in the US "asked online planners and buyers in North America about key issues in digital marketing. More reliable metrics came out as the top concern." Read the complete article here. Want More Ads? Get Better Metrics.

Why is TV-advertising so dominant in China?

During my 1st Chinese New Year Holiday here in China  I had lots of time to research, to think and to write. But I don't have the answer on the why-question yet. I hope however to have proven that the spending in interactive advertising should double or even triple right now. If you're interested in the whole story please download Happy.Chinese.Interactive.Year.pdf

Can rats in NY ruin a brand in China?

It happened yesterday in NY, and it was immediately (07/02/24 - 09:11:27 ) on the China Daily site. A horrible story of Rats running wild in a KFC restaurant in NY. The problem is not only the rats, but the movie with the rats as main/mean actors .... spreading across the internet, shown on many high-traffic US news websites and on television news stations across the country. Says FT: "The case highlights the danger posed to international brands by the rapid dissemination of damaging images or information about companies via the internet."  I wonder how  the Chinese consumer will react on this event. The China division of Yum opened about 400 KFC's and Pizza Hut's here in China this year and are doing well. They own 2,400 restaurants right now. And they grow like hell. **http://www.youtube.com/watch?v=su0U37w2tws

Dear Mr Destrooper,

Your butter waffle crisps are the very best in the world and  in China. They are also very expensive. We pay them here in Shanghai 2,5 euro for 100gr. But almost all of the time we don't get the virgin waffles like you show them on  your package, but w-a-f-f-l-e-s broken into many many pieces&crumbs. Horrible. I don't know in which phase of the logistics flow they are tortured and  who the hell doesn't respect the Universal Cookie Rights so I don't know the remedy. Please check whether  fanatic customers in other countries have the same complaints. If it's only China then you should start a "Respect Cookie Integrity" movement like what the government is doing now here with Good Manners in general.

Corruption? WPP investigates!

Click on this link and you will get access to no less than 6.725 articles published in the China Daily about corruption. Corruption and the battle against it is front page news. Almost daily. Usually it's about government officials, party members and domestic companies, but they target more and more the multinationals too. "China tackled 17,084 commercial corruption cases from August 2005 to the end of last year, involving 4.5 billion yuan ($580 million). Of them, 3,912 cases, or 23 percent, directly involved government employees. It is not known how many of the cases involved foreign companies." Until now  I never read anything about our marketing, advertising & media-sector. Until today. "WPP **is understood to be using external security investigators to crack down on media executives taking kickbacks in China"  writes  Media this week. Great news and good news. The magazine thinks there is "no smoke without fire" and is sure "a can of worms could open up". Media-buyers would routinely take kickbacks in the form of extravagant entertainment and travel expenses some sources at WPP told the magazine. Come and see the next months what will happen.

**WPP is the owner of the world's largest mediaplanning and buying companies. Together they yearly buy for  $55.6 billion time and space in all kinds of media.

The soft power of a brand called China.

Peaceful rise. Harmony. Soft power. These are some of the words here in China. Mix them and you have "proudness"  - that’s soft &  power combined. The West lacks that proudness. We often feel ashamed for what we’ve done to the world since Columbus.

China is the opposite. It’s right to be rich is the moto here. I was positively shocked by the proudness of a (Taiwanese) investment consultant who wrote in his recent newsletter: “ (…) over 50 million ethnic Chinese living outside of Mainland China were able to prosper in places like Hong Kong, Singapore, Taiwan, America, and others. If we were a country, the total economic output controlled by these Overseas Chinese would be third in the world, after the U.S. and Japan.”  The 3rd country in the world!  Unbelievable but true.

Shanghai sends 575 mln SMS on CNY's Eve

Saturday it was Chinese New Years' eve. People in Shanghai sent more than 574.6 million text messages of greetings. [Beijing only 400!] About 32 text messages were sent by per cell phone user Saturday in Shanghai. 

Shanghai is very roughly speaking double the size of Belgium. Lets say 20 mio versus 10 mio. The Belgians sent 46 mio sms on new year's eve last 31.12.2006 and the Shanghainese sent  at that moment already 244 mio (and it was not yet THEIR New Year). Mobile marketing will soon outperform the classical PC-Apple based interactive way of communication. Soon indeed. Don't ask me how soon. But it will come.

China's rich spend big to celebrate Valentine's Day.

Today Shanghai banker Richard Fan will be buying his wife a 40,000 yuan ($5,146) Cartier wrist watch. What about you? China's rich spend big to celebrate Valentine's Day�|�International News�|�Reuters.com.

space cake? no potatoes!

(Shanghai Daily) In October 2005 China's second manned spacecraft, "Shenzhou VI," completed a five-day space voyage. Apart from the two astronauts, the space vehicle carried various plant and flower seeds for experiments. Among them a new type of sweet potato, developed from seeds that mutated in outer space. They have a much deeper purple color than previous generations. Since purple is believed to represent nobility and romance, restaurants in Shanghai have started offering a range of culinary delights featuring the new purple sweet potatoes, as a warm-up promotion for Valentine's Day, which couples in China often celebrate by eating out.
Kent KC Lee, a top chef from Hong Kong who now works in Shanghai's Carnation Restaurant, pioneered a Purple Orchid series including a salad, appetizers, desserts, mini cakes and an iced drink.
"Almost every table of guests tries out a dish or two in the Purple Orchid series," said Peng Yuan, the head waitress at Carnation Restaurant.

Would it be possible that someone in Shanghai ate to much space cake creating all this space potatoesmania?

Nivea in China? Or not? Fons knows!

i-merge China wishes all their Chinese friends a happy new year

Survey in China : "Yes to foreign banks"

"The majority of respondents to an online survey said they will move their money to foreign banks when foreign-owned retail banking begins this year. According to the survey, conducted by China Daily's website, www.chinadaily.com.cn, more than 57 percent of the 1,329 respondents said they will move their money from domestic banks to foreign ones." Link: Survey: Yes to foreign banks.

i-merge asia-pacific launches baozhuzhu.

.... more news in 2 weeks when the year of the pig really starts!

Ajaz Ahmed, the AKQA-boss ... about Shanghai

Chinese banks face aggressive foreign peers

Chinese banks face aggressive foreign peers. "Chinese banks have made enormous improvements in their operations over the last decade". That's what the Chinese feel, but as foreigner i'm far from happy with the service of my bank here in SH. To be honest ... my foreign banks is not that good either. But these foreign banks now target the high end Chinese consumer. The figures are the usual 20/80 figures: 20% of customers at Chinese banks generate 80 percent of the banks' profits and own 80 percent of the bank deposits.

And these rich Chinese flee to foreign banks. "Many rich Chinese switch loyalties for quality services and the international reputation of foreign banks."

The web is for old people and losers

Gemme van Hasselt  (he's not from Hasselt, but form Holland and he lives and works as an SEO-consultant in China) send me this link. Web 2.0, Dude, Who Cares, Where’s Phone 2.0? | Threadwatch.org. Read this: " What I've noticed is that teens are more connected than ever before, just not to the web, and usually not via PC. They don't care about 'social media' and Myspace was a fad. The kids I spoke to used it for two weeks or so, got bored and moved.

Their 'social network' is real, and when they aren't together in 'real life' they stay connected with their cell phones. They aren't using Digg, Netscape, Facebook or "Web 2.0". Even the few that have blogs might post once or twice a month and even the self-admitted 'geeks' sad that the Web is like a big commercial.

I know they aren't the influencers now, but they will be. So where is all this social media stuff headed?"

Click, enjoy and buy a ticket

What about Belgium?

Holland beats China on search revenue said the China Herald. And the Herald wrote me later they were wrong. Read this reaction of one of the Herald readers on Fons' blog : "With regards to your figures, I could not follow your calculation. According to Gemme's article the total spending on search engine advertising in China was 201 million USD. In Holland it is 110 million EUR, plus 90 million through affiliates. I agree that on a per user basis China still lags far behind, but looking at the totals the gap is not so big."
The question remains: "What about Belgium?"  

Buy Baidu?

Baidu got the official approval from the Chinese Government to provide (their own) news. Probably it's gonna be an earthquake. The biggest in China will only become  bigger. Look at figures on the left. Time to buy on Nasdaq? Read it here too: Baidu approved to provide news.

Forbes on Online China!

In  "China Is No. 2 Online"  - Forbes.com writes about a 47% surge in total online spending, to 276.8 billion yuan ($35.5 billion) according to a comprehensive annual survey released by the Beijing-based Internet Society of China, a national industry business association.

"The most important trend in 2006 has been the role played by the Internet users. They are the driving force behind the wide applications of Internet services. In China, it was not about technology nor capital investment," says Hu Ying-ping, the lead researcher at Data Center of China Internet, a unit of the Internet Society that released the annual survey in Beijing. A complete copy of the 2006 survey was posted on its Web site, www.dcci.com.cn"

Goodbye Gutenberg

Fons from China Herald published this link on his site. It should be interesting. Not only because Fons wrote an article in it, but also because it's about the web.

Bluetooth advertising

Marc van der Chijs' Shanghaied Weblog: Bluetooth advertising: "I was reading an article in the Dutch press just now about a new form of advertising through bluetooth, where people can receive a short video about a product (in this case the product was a TV program) when they are within 15 meters of a billboard. This was seen as a new idea, but this is kind of advertising has been around for at least a year in China. The Shanghai based company Pioco is doing this, and is even taking it to a much higher level."

It was a bad week for non-Chinese brands

It was a bad week for the non-Chinese brands. Starbucks leaves maybe the Forbidden City and some  of the world top brands are having troubles here. Brands like Zara, MNG, Armani, Ermenegildo Zegna, S.T.Dupont, PINK and MaxMara were found to have substandard products.  Link: Top-label garments fail quality tests and also here in Shanghai Daily. The readers speak up too.

And on top of all that there's the "McKinsey thriller": Reports say that 22 company executives are currently detained for taking bribes. They headed the information technology departments at the local offices of US consulting firm McKinsey & Co., McDonald's, Swiss engineering firm ABB Ltd. and American appliances maker Whirlpool Corp., among other companies.  The International Herald Tribune already had the story in today's newspaper.

The good news this time is for i-merge. A Chinese marketing specialist wrote in a recent article that brands shoud "prepare marketing formats that target a select group of consumers. Consumers (...) often tend to follow their relatives or colleagues, so a small group of consumers can bring more people". You can read Cai Guanghui's article below.

New quake is bad news for the interactive business in China

No GOOD internetconnections with EU and US for another month! New quake thwarts undersea cable repairs. Another earthquake off Taiwan has further hindered the repair work of the damaged undersea communication cables, extending the schedule by at least 15 days.

Workers found more damage to the thin cable lines after an earthquake measuring 5.2 on the Richter scale shook the sea around the island at 11:13am on Wednesday (...)

Chinese Ad Network Planning $100M IPO

Adotas Chinese Ad Network Planning $100M IPO. "Shanghai-based advertising company Allyes AdNetwork is planning a $100 million IPO on the US NASDAQ, according to Reuters. Allyes, one of the largest online ad companies in China, is working with Morgan Stanley on the offering and could hit the exchange as early as March.

Allyes boasts many big name clients, including Dell and Chinese portal Sina.com. The company was founded in 1998, and is currently running on capital left over from a $30 million investment by Chinese and American venture firms in 2005.

The company accounts for at least half of the Chinese Internet advertising market, says Reuters. In June of last year, Allyes was named one of the top 21 new enterprises of 2006 by China Entrepreneur Magazine.

Allyes denied rumors of an impending purchased by Chinese media advertising business Focus Media Holding Ltd, which is already an investor in the company. Focus, which operates an out-of-home LCD screen advertising network, is also listed on the NASDAQ.

Mobile Belgium VS Mobile Shanghai

Shanghai is very roughly speaking double the size of Belgium. Lets say 20 mio versus 10 mio. The Belgians sent 46 mio sms on new year's eve and the Shanghainese 244 mio which is not 2 times more but  a staggering 5.5 times more. And don't forget that it was our New Year and not yet theirs. Chinese New Year is only on Feb 18th. Mobile marketing will soon outperform the classical PC-Apple based interactive way of communication. Soon indeed. Don't ask me how soon. But it will come. Pacific Epoch - Shanghai Sends 244M SMS Messages On New Year's Eve

The struggle between Chinese brands and global brands.

No class struggle, but brand struggle :) This struggle will become THE struggle of the coming 2 decades. In China it's going on,  but globally there are not yet that many Chinese brands who can really compete. One of the battlefields will be the so called tier 2 & 3 cities. These are the "smaller" cities where income is still lower then in SH and BJ but where 100's of millions are ready to  grow into the decisive powerbase for future marketshare. Everybody knows. But the local brands seem to know it better. In the Christian Science Monitor of today you can read that "Chinese companies have been quicker than their Western counterparts to spot the potential in China's hinterland" .
One of the (many other) signs here in Shanghai is the fight for good spots in our top shopping street Nanjing Lu. Here the globals seem to be winning. Shanghaiist referred to an article on Netease in which is revealed that  "certain domestic Chinese brands are unable to renew their contracts on Nanjing Lu despite being willing to pay whatever increase in rent was necessary. The three companies detailed in the report are casual fashion company Metersbowne  (美特斯邦威) , Shanghai based underwear maker Three Guns (三枪), and traditional Chinese beauty and health products maker Herborist (佰草集)

.  These stores have been told by their landlords that when their
rental contracts would not be continued. Metersbowne's Huaihai and
Nanjing store space looks like it's going to fall into the hands of
Adidas and Nike. "  Shanghaiist: Nanjing Lu squeezing out Chinese brands?.

What a coincidence .

The year i-merge arrived in Shanghai, Shanghai Experiences Warmest Year in 134 Years. China is hot.

Back!

It was really bad here in China during the last 6-7 days of 2006. After the earthquake on Tuesday, south of Taiwan, there was nothing coming in from abroad. Only sites hosted in the mainland were available. Then - later on - sporadically gmails started to arrive. But still no connection with EU and US sites though. No Skyping with EU. I tried several times. The Yahoo mail owners still received nothing till yesterday. It seems to be the first internet earthquake. Almost no people died, but millions were  getting desperate. Read this: "Days without MSN" syndrome. Now, on this gray and rainy Sundaymorning, the real last 2006-day, I can finally get i-wisdom back and hopefully upload this message. If you want to read more about it click on Damaged cables may not be fixed in 7 days & Internet links partially restored  & Internet access slows to a crawl after quake. It should work now since I heard that Chinese sites were not reachable in Europe either.
But by far the most hopeful  internet news is that there are now 132 million Chinese Internet users by year-end and that the advertising sector in China  is on the rise. All's well that ends well.

Would like to have the printed version of i-wisdom?

Then click here .... Marc van der Chijs' Shanghaied Weblog: The best Christmas present ever!.

No X-mas in China? Forget it!

Next monday on the 25-th (!!!)  i-merge Shanghai works. Everybody works. There's nothing wrong with that. X-mas is not an official holiday here. Not yet. I hoped and thought - until a few weeks ago - that there would be no X-mas craziness here in China. I was completely wrong. And although The Bible is widely distributed here because the government tolerates (stimulates?) religious feelings, there's very little religious about X-Mas here. It's all about shopping, dining, partying etc etc. " For an increasing number of mainlanders, especially young women and housewives, the place where they must spend Christmas is Hong Kong not for snow but for the sales."  Some people get fed up with it - it seems. These  phd students   published a petition "against Christmas". Not an anti-religion text - n0 n0 -  an anti-commercial one. Like  in the rest of the world they too attack the over- commercialization. "Their objection is more targeted towards the vulgarized and commercialized Christmas that seems to have overtaken the shopping malls and even the elementary schools, where everyone seems to get festive and kids seem to get into the act without really knowing what the heck is going on. The deeper point they want to make is that this is not just nefarious cultural imperialism on the part of the West (or at least the capitalists in the West) but also linked to a cultural inferiority complex the Chinese have vis-a-vis the West. Chinese festivals seem a bit a tired and conventional and going to church, attending mass, partying, shopping and exchanging gifts seems to offer more of the novelty and excitement that many young Chinese people desire. "   ( Link also here : Bible widely distributed across nation: Christian leader).

What do Chinese brands need?

"China plans to further boost its world economic status through branding. (...) Branding is a decisive factor in the world's economic development, and in some cases, an established world brand's overall value is even bigger than that of a middle-sized country" an official said.  And although the sales volumes of the the 6 best selling Chinese brands rank among the top five in their world markets ...  as a brand they all are still very weak. In BusinessWeek's list of the world's top 100 valuable brands none were from the Chinese mainland. There is whole list of necessary things the government is planning. "The core strength needed is to improve private intellectual property rights and patent rights"  the same official said. He seems to forget that you also/mainy need the innovative creativity of top marketers and top agencies to build brands.   Chinese officials should read 10 ways marketing will be tansformed in 2007  in which Bob Liodice, President and CEO of the Association of National Advertisers has a good advice ... for all companies : "The chief marketing officer will rise in stature as a C-suite player, not only serving as chief brand architect and marketing discipline integrator, but also as the enterprise’s business system innovator, organizational teacher/ motivator and, most importantly, chief revenue builder".  Branding to further boost China's economy.

Two interesting white papers of Interbrand on the same topic
Download IB_WP_ChinaBrandStrategy_2.pdf
Download the.strategy.of.chinese.brands.pdf