Mei Po. 媒婆

IS THERE ANY VALUE IN VALUE BASED COMPENSATION?
By Greg Paull on 26-Sep-12, 16:08 in Advertising, Brand, Digital, Marketing, Media |

Well, this was a good week to be Tony Blair – a short taxi ride to Claridge’s in London for a three hour meeting, to broker a deal between Xstrata and Glencore, in exchange for a US$1m fee.

I can see the procurement people looking over this now, and asking “Is $333,333 a fair hourly charge out rate?” No doubt one of  Tony Blair’s men would have replied “Well, he is one of our top executives….”

This industry has become bogged down in too many irrelevant and counter- productive discussions about time and costs. I feel confident in saying this, because in a lot of cases, my company is also involved in these. If martians were to land on earth and study the advertising and communications sector, they would laugh – “you mean the slower you work, the more you get paid?”  For the majority of agencies right now, on hourly fees and retainers, this is the reality. 

Two days ago, I ordered some books off Amazon, and paid a fat premium to get them delivered as soon as possible.  Imagine if I had paid more to get them delivered more slowly…. Last week, I got a piping hot pizza from Pizza Hut – imagine if they charged me more to deliver it in three hours.  The world’s tallest building is currently going up in Changsha, China right now (…not a typo….) in seven months – if they take seventeen months, how much more could they charge?   

THE DRIVE FOR VALUE

When will someone from the client or agency side take more of a risk and work on a greater value based compensation approach?  According to our 2012 research, 49% of global marketers now pay their agency a variable fee, linked to results. So this is a start – but likewise in the same study, 65% of marketers are unhappy with the current structure and want to change.  Barack Obama this year couldn’t get re-elected with 35% of the vote, so it’s really time to hope for some change. 

Coca-Cola has taken the first shot three years ago with a Value Based compensation approach  and P&G tried Sales Commissions – but as we said at the time, both are a good step, but still remain challenged. Holding companies don’t like the idea of having so much at risk – and procurement people at companies can’t imagine paying an agency double or triple the actual cost to get work done (meantime, they happily pay McKinsey or Bain on this basis).

The key potential has to be the way agencies can better measure and drive their overall performance, and the performance of all the agencies working for the brand. This idea of ‘mutual risk and reward’ is a cornerstone of good integrated marketing. We were lucky this month to have top clients and agencies help us on an Integration White Paper – (write to me for a copy)

Digital needs to be at the center of this. In five years’ time, there won’t be any digital agencies or social agencies – there will just be agencies – and some dinosaurs.  The goal needs to be not “How many followers we got”, but how this work genuinely influenced Brand Equity, Purchase Intent and Business Results. 

All it needs is a client and agency to both take a stand together.  Who will be the first?

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FINDING TRUE LOVE IN CHINA HAS NEVER BEEN HARDER
By Greg Paull on 11-Jul-12, 11:50 in Advertising, Brand, Digital, Marketing |

Well, there it was, buried into an outstanding article in the New Yorker by Evan Osnos, probably the best English writer in China right now (sorry, Tom) – a lovely request from a woman looking for a man, posted on Jiayuan.com,  China’s largest dating site,

“Never married; master’s degree or more; not from Wuhan; not an only child; no smokers; no alcoholics; no gamblers; taller than 172cm; more than a year of dating before marriage; sporty; parents who are still together; annual salary over RMB50,000; between 26 and 32 years of age; willing to guarantee four dinners at home per week; at least two ex-girlfriends, but no more than four; no Virgos; no Capricorns. “

Damn, I thought; I nailed every criteria, but I was from Wuhan! Curse you, Wuhan!

Jiayuan is amazing – started by Gong Haiyan, a disgruntled dater seven years ago, it’s now a NASDAQ listed company,  with over 100 million members and a market cap of RMB1billion. Looking for that special someone in Beijing? Well, you might have to sift through over 1 million people in Jiayuan to find them. Gong has now been called “China’s #1 Matchmaker” (I finally have a role model) and been featured on many business and lifestyle shows.

Everyone knows about China’s one child policy, and the leaning towards men. By some estimates this decade, there will be 24 million men of marrying age unable to find a wife. While marriage rates are down to as low as 51% in the west, in China, 98% of all women will marry at least once in their lifetime.

Then it struck me.

Marketers are like the women of China.

In a country of 143,000 agencies, there’s simply no need to settle down. There’s no real benefit to find a long term partner, when there are so many hungry suppliers looking for their next meal ticket (or Martin Sorrell’s next meal ticket). Why just read a book, when you can have the whole library?

In our research, no country on earth has shorter agency relationships than in China. An average they are two and a half years – for a lot of local clients, even less. But this is not only a local problem – Unilever right now is pitching their China media.

Their last review? Two and a half years ago.  A spokesperson in London said “this kind of review timing is normal.” 

The “concubine approach” to agency relations has meant agencies undercutting, often having to under-deliver to break even, seeking revenue from media and production houses to subsidize their low fees, paying and training their people less than they should.  According to our research, only 66% of Chinese marketers are satisfied with their agencies. In Europe, this number is over 90%.

So what can we do about it?

  1. Look to new models – what P&G have done with their BAL (Brand Agency Leader) model is a giant step forward, albeit not perfect. We were lucky to work with Coca-Cola China on a similar model before the Beijing Olympics – it worked for them then. The best brands in China trust their lead agency to manage others and drive business – with some very long relationships – P&G and Grey, Publicis, Saatchi and Leo Burnett have more than 50 years together.
  2. Focus on Outputs, Not Inputs – we spend a lot of our lives helping clients and agencies agree on appropriate compensation, but really, what is more important, is that the agency is held accountable, and has a significant “skin in the game”, based on agreed outputs. I don’t really care if you think that integrated campaign will take you 1,500 hours to produce instead of 1,200 hours – I care more how much it will sell and what it will do for brand equity – and you should too.
  3. Take Digital Seriously – if you thought Above the Line relationships were bad, digital relationships are terrible in China. Most marketers hire their digital agencies by the yard, not by the year. So digital agencies for the most part, usually don’t see the need to invest in Strategic Planning or analytics, since neither side knows how long the relationship will last. Everything is so new, so everything is so short term.  Imagine, one client hired us this year, because their roster of digital agencies was too small – they needed to look more widely. That roster? 14 digital agencies. What if all that business was in 1 or 2? How much talent and how many great solutions come could come? Coca-Cola, conversely, has only just started broadening its digital roster, after staying quite focused for five years – in R3’s EnSpire study, it’s the #1 brand online when it comes to engagement. Who knows how much this strategy helped, but it sure didn’t hurt.
  4. Benchmark – well, I guess you knew I would say that, but marketers and agencies should be using external measures, whether it’s tracking research, 360 degree evaluations, media audits, or other measures to benchmark where they are in an ever-changing marketplace. It doesn’t have to just be through a pitch. We have one big client in Shanghai that audits their agency every year – seven years later, there’s been no pitch – and sure, the relationship is not perfect, but there’s a lot of continuity and consistency. Johnson & Johnson do evaluations better than just about anyone else, as you would expect from such a ‘nurturing’ company, actively asking agencies for feedback on how they can become a better client. 

China might be an easy place to find short term love, giving the dynamics of the marketing industry right now, but the real winners will be the ones who set up mutually rewarding partnerships for the future.

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"PLANTS" VERSUS "ZOMBIES" 2.0 IN CHINA
By Greg Paull on 24-Nov-11, 18:22 in Uncategorized |

I guess it was about six years ago as the internet was picking up here.  One of our big clients found a lot of negative comments online for their new campaign.  Odd comments, hypercritical, one building on another.  Of course, after a little asking around, we discovered this was being driven by the digital agency of our client’s competitor.  They were “planted” – paid to write these things.  Harsh words and accusations were exchanged, nothing was ever really proved, and of course the battle was joined, the practice was continued.  We used to joke about the day when the only people online in the BBS would be the plants , the paid posters – when the lunatics truly take over the asylum.

So it caught my eye this week that some hardcore computer scientists at Cornell University would try to quantify just how many lunatics there are out there now.  This impressive report can be downloaded here ,  but beware – get ready to recall all your High School algebra when you read it.  They meticulously went through Sina and Sohu comments and came at it from a multitude of ways – time intervals between posts, active days, news reports , and a massive semiotic analysis using Chinese splitting software.  Heck , they even went to www.shuijunwang.com and joined up as a “Plant” – to see how they whole thing works (Note to self : remember to click on link later for second income stream).

And what did they find? Well , it might not be as bad as you thought.  By their estimates, 14% of all messages were “plants” -  stuck up by people paid for their messages –  made to look anonymous.  So we can all rest easy, ay ? 86% of all Chinese posts are ‘real’…..but wait, do the math – 14% of the 485m Chinese people online ? Why , that’s 67m “planted” people, more than the populations of France or the UK.  Sure,  I exaggerate – the paid posters will obviously post more often,  but it makes you think how many marketing campaigns have been altered, iWom companies started,  iWom measurement companies made rich, and people’s careers affected – through all this tom-fakery.  The mind boggles.

And what of the “Zombies” – well , first it should be clear this is not a phenomenon unique to China – Gawker reported this year that Only 92% of Newt Gingrich’s twitter followers are fake” .  With the growth of Weibo in China to over 250 million, so comes the growth of “Zombies” – fake Weibo accounts.  If you take a trip to weibo.pk  or even Taobao, you can pick up 1,000 ‘friends’ for RMB4 , the cost of a good bowl of noodles.  Too obvious for you?  Why not try the “Premium Zombies” which also come with a fake photo and five fake posts for just RMB24 for 1,000.  Imagine, even China Daily  is now covering this story, talking about an Abalone Restaurant in Shanxi Province that offered a free iPad as a prize.  The Zombie Army got to work , and the original message was re-posted 13 million times, (a China record) according to reports. Let’s hope they don’t all come for a table for four on Saturday night.   Sina, naturally, has disputed this and is doing what they can to clean things up.  That would be a good thing.   Our children are either going to either grow angry – or grow rich – because of it , in the future.

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CHINA MEDIA EXPRESS HITS THE RAILS
By Greg Paull on 23-Mar-11, 16:03 in Media |

 

You probably saw that great Tony Scott movie – “Unstoppable’ – about a train whose brakes had failed and just couldn’t stop?  Well China has been living a similar drama the last few months, in the form of long distance bus advertising company, China Media Express

To get the full picture, you really need to rewind to look at Focus Media , the NASDAQ Darling of China Outdoor Media after it listed at US$8 a share.  Three years later at US$65 and a market cap of US$8b, the company, led by Jason Jiang, was one of the most powerful media players in China, with an acquisition strategy that saw it attract some of China’s best digital agencies.  When the “SMS scandal” hit, the stock fell to US$5.80, the CEO and Founder took a holiday and divestiture became the new phrase du jour.  (As it turns out, two years later, the company’s stock is remarkably now back to US$28 – “anyone with a easily upset stomach, please avoid this ride” – and a more humble Jason is now leading the way).

Roll on a few years, and it seems that everyone in China Outdoor can get rich quick.  “What else is there to do on a Long Distance Bus in China, but watch advertising?” thought Zhang Cheng, CEO, President and Chairman (the Triple Crown) of China Media Express.  Using his government contacts and leverage, he figured he could create an exclusive contract to sell ads on TV screens to a very captive audience.   More importantly, he rightly assumed that global investors would want to embrace this Chinese vision too, and so it was he listed his fledgling business on the NASDAQ on Nov 14th 2007. 

The stock was barely traded until the end of 2009 until the ‘good news’ started to come out  – Coca-Cola, Apple, Toyota, Mars Adidas and Hitachi were now all top ten advertisers.  Business was thriving, and more and more routes were confirmed.  The company even attracted investment from the likes of Hank Greenberg , ( former CEO of …errrr …the less than successful AIG , collapsing itself in 2008. ) The stock moved from US$6.90 to US$20 within the space of the year.  For 2010, revenues were reported at over US$200m, with a 55% profit margin, making it the second largest outdoor company in China, behind Focus –  and with an annual growth of more than 120%.

Since this was a NASDAQ listed company, with Deloitte as the auditor, who could possibly question its success?  Well it turns out people did. It was earlier this year, my phone started ringing – “Had I heard of this company?” , “Do my clients work with them?” ,  “Is this result possible?”   The blogs started getting active; every media agency in China was called for a comment.   One cynic called it “(a) one of the best businesses in the history of capitalism or (b) one of the most brazen frauds in the history of capitalism”.  People started flying from the US to Fuzhou to conduct their own research – if you have a spare 20 minutes, this link might be the funniest China business article you’ve read this year.  For every short person on the message boards, not far behind there was a bull talking up the company’s technology and contracts.

So here we are at the end of March 2011 and guess what?   Deloitte has resigned as the auditor , the NASDAQ this week de-listed the stock , Hank Greenberg is now suing the firm  and – surprise – the CFO and several others have resigned. The end is nigh. The business has imploded, and no-one knows if this if a 5, 10 or 100 times revenue fraud. One thing is for sure – everyone will be more careful when investing and following China media stocks.

Is there another China Media Express lurking out there?   Only time will tell.

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LEARNING FROM LOCAL - INSIGHTS FROM CHINA’S 204,000 AGENCIES
By Greg Paull on 07-Sep-10, 10:16 in Advertising, Brand, Digital, Marketing, Public Relations |

 

Ask anyone about what it takes to be a successful local agency in China and you’ll hear one word back – “Guanxi”. While this is still an important facet, we are seeing far more progressive thinking today as the environment gets more and more competitive. If you intend to be a successful multinational agency in China, there’s never been a more important time to ‘go native’ and learn from the locals.

 

When we say ‘local’ , we should be specific – last year , there were over 204,000 local agencies spread across the Middle Kingdom according to the CAA (China Advertising Association). By our estimates, the “local agencies” still represent around 80% of the estimated RMB34.1b revenue for advertising services in China. Yes, for the newbies, this is not a typo – all the might of WPP, Dentsu and the rest can only come to around RMB6.8b for mainland China. For the full family tree, you can click on this link here

 

This year, in our research with 200+ China marketing decision makers, a quarter of them told us if they ran a creative agency pitch tomorrow, they would shortlist a local agency. That’s up from 6% in 2006. For the first time ever, one local agency (Ye Mao Zhong) was mentioned amongst China’s Top Ten most creative – and five were mentioned in the top Twenty Five. We’ve been fortunate to meet with a lot of them over the last eight years – and we think they are showing the rest of the world a few important things about being a successful agency.  

 

1.   Market The Brand.  Agencies are fantastic at marketing other people’s brands, but rarely invest enough time in their own. In China, no-one does it better than Ye Mao Zhong and Zheng Bang , who work closely with business publications in exchange for adspace. Shanghai’s Meikao has a unique positioning – it wants to be a toilet bowl for their clients. But that said, it doesn’t take crap from anyone in the way it works. Dongdao, Focus PR Group, TEAM, Tri-Star and others invest in trade print titles. And Charm have even produced and aired their own TV commercial for their company – who said Advertising doesn’t work?

 

2.   Leverage Global Connections.  We’re meeting a lot of ‘new breeds’ of hybrid agencies who are offering and delivering the best of both worlds – either through minority or majority investment from a global network, or through their own connections. In some cases, there share more global best practice than some multinational agencies in China.  Raynet Ogilvy and Allied Shanghai have proved to us through their Ogilvy relations, they can more than match foreign competitors. Dentsu has given minority investment and best practice insights to Suntrends and Blue Focus. And agencies such as Always, Dawson, Yong Yang, Unisono and Starecho have all enhanced their competitive spirit through majority investment. 

 

3.   Carve out a niche.  Find a city, find a discipline, find something that makes you stand out from the other 203,999. The best local players do this every day in their business approaches and thinking. Garbo leads the way in Hefei offering healthcare and other skills. Transmind is the leader in Guanxi province, attracting a wide mix of clients. S&W brings unique PR insights to Chongqing and Sichuan province that can’t be found from an office in Shanghai or Beijing. 1024 is leading the way on IWOM services for local and multinational clients. Madhouse has done more than any global firm in pushing mobile marketing in China. Each have found a way to thrive through their own skills and insights.

 

4.   Build ROI.  To think that local agencies somehow lack tracking and research is quite misplaced. Singshine have a six monthly Client Performance tracking tool in place to measure satisfaction and their own results for their ten biggest relationships.  Spearhead have a unique online system for event marketing to record and measure success. Both Shunya and Across China also have teams specializing in measuring the ROI of their PR and Event activities. There’s a new discipline in China, and clients are increasingly steering towards agencies that can measure what they make.

 

5.   Go Digital.   Some of the most exciting digital agencies we meet in China are the local ones.  They embrace a “Can Do” spirit and have a bright team of graduates to drive execution. The leaders own the business – so they have an unbridled passion to grow through good work. Few multinationals can keep up to the speed price and quality of NIM, A4A, Gomye or Showone. Meantime, local heroes such as Tensyn, OMP, Longtuo, Boosen and HYLZ continue to grow in critical mass, credentials and capabilities. 

 

The spirit of entrepreneurship has never been more alive and well than in China’s plethora of local agencies – with a hunger and passion to grow and thrive like few other markets. The Future is Bright. 

 

 

  

 

Greg Paull is Principal of R3 (www.rthree.com), a Beijing based consultancy focused on marketing efficiency and effectiveness

 

 

 

 

 

 

 

 

 

 

 

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China Loves A Deal
By Greg Paull on 29-Jun-10, 11:59 in Brand, Digital, Marketing |

Where have you all been? While you were sleeping, China launched more than 100 GroupOn clones this year in one of the most competitive webplays in history. And here you were thinking it was only ripe for “shanzhai” facebook and twitter? No, we are capable of so much more.

“Groupon?” I hear 83% of you say? Yes, GroupOn– the fastest growing trend on the web, allowing online shoppers to combine their sales power to the greater good. Twitter hit the magic $1b valuation in three years. Facebook managed this within two years. And recently, a Russian consortium invested $135m for 10% of GroupOn, valuing it at $1.35b just one and a half years after its startup. Have you added $1.35b to your own company in the last eighteen months? No? Why not?

This slow-one-plus-year-idea is so “US-centric” - let’s look instead at what is happening in the Middle Kingdom - where there already more errr….let’s call them ‘emulators’ than the rest of the world combined. The best impersonator off the rank has to be “China’s GroupOn” (no relation) which re-confirms the mantra of imitation as the sincerest form of flattery. Despite the outstanding name and similarities, these guys may likely get crushed by more serious and better invested players. Gang Lu, a Shanghai-based blogger, has been the guide for this article. Perhaps the leader in this sector would be RenRen, and their new group purchasing site called Nuomi. Imagine in two hours this month, more than 152,095 visitors grabbed a discount offer for two movie tickets, two cokes, a box of popcorn and one Haagen-Dazs ice cream. Show me the money. RenRen have volume on their side, since their social networking sites just continue to grow, so it’s making access easier and easier.

Unlike Dot-Com 1.0 or 2.0 which was based on “Burn Rates”, these clones are making cash flow from the get go. A deal in China is as close as a smart mark up, so Group Sellers are able to structure the right model to make sense of it. That all said, the “Big Daddy” of online transactions, Taobao, is naturally one of the leading players with their own group site. They haven’t made a huge investment in it yet, but since they are already a leader in India and Japan, we’re sure they will extend this capability to other markets.

But to think the big guys have things to their own would be to neglect Ftuan, CoolTuan, RunTuan, Lashou and more than 100 others, all looking for their own VC money, their own marketing plans, their own local city focus.

Confused? Don’t worry – the “googles” of China Shanzhai GroupOns are already out there – TG123, Nietuan and 122.net are all aggregators to allow you to search across multiple platforms for the best deal possible. For goodness sakes, we hope you don’t miss out.

The final question of course, is what does this mean for the marketing community? Well, there are a number of factors at play here, but truthfully, it’s all about the perceived value of crowdsourcing. Unilever have already tried this on some of their brands – and according to them (the best possible source ) there will be 3-4 brands in 2010 treated the same way. Marketers need to respect the value and power of groups – in creating brands, shaping brands and buying brands. The real leaders of the future will embrace this and grow.

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ADVERTISING'S PAST IS HISTORY, IS THE FUTURE A MYSTERY?
By Greg Paull on 16-Mar-10, 12:37 in Advertising, Brand, Digital, Marketing, Media |

Nowadays, you can see the past, present and future of advertising and social media in just a few clicks on Youtube.  For some reason, Sesame Street recently felt it was time to pay homage to the past and to Mad Men. I am still trying to flash back to my youth and remember the last time a stuffed puppet used the word “Sycophant”.  Maybe the kids nowadays will be able to twitter each other and figure out the meaning of this. The real series, Mad Men, continues on beyond three seasons with such a cult following that Mattel this week launched Mad Men Ken and Barbie figures.  But what most impressed me about the past was the “top to top” relationship agencies have with their clients. It’s interesting to note this is still alive and well in India, and surprisingly, still alive for the best agencies in China. One of those – Meikao, who performed very well in our China Research – believes that the “toilet bowl” is the symbol of their approach. And yet despite the obvious connotations, they maintain strong relations with the CEO’s of some of China’s most successful companies – literally flushed with success.  

 

For the present, the best show on advertising comes from Down Under.  It’s called “The Gruen Transfer” (don’t ask why – the website can tell you) and it’s made heroes and anti-heroes of its stars.  According to local media, advertising in Australia has now become sexy again, thanks to “The Gruen Effect”This type of format could do wonders for the industry in other markets where advertising needs a boost – I can easily see this concept working in China, Taiwan, Thailand, Philippines and Malaysia. Of course, India is ahead of the curve already with “Storyboard” and another four different clones of the same thing. It’s almost as if a senior advertising figure went to India and didn’t get interviewed for television, then surely questions would be asked. 

 

So what’s next? Where’s the future?

Well surely, social media will lead the way. For the most entertaining video you’ll watch this week, go no further than “The Social Media Guru” , a pointed satire from an Irish journalist on digital agencies (Warning – this one is not as child friendly as Sesame Street!). Most of the marketers we work with now are dabbling in this area – but it’s the ones with a coherent long term strategy that are going to get the benefit. According to the latest issue of AdAge, while total spending on digital in 2010 represents 16.2% of US marketing spending, social media only makes up 0.5% of that (by the way , paid search leads the way at 7.8% – that makes Google the “frenemy we paid $850m to” as Sir Martin called them). While that may seem a small percentage, it’s going to become a crucial one – one where reputations are won and lost, where brands are created and embraced by consumers not by companies. Already in China, we’re seeing the emergence of Social Media specialists such as Resonance, Evermotion, 1024 and others – working with clients to optimize consumer connections. It’s going to challenge marketers and agencies together to find the right path – the best ones will, and the creativity that will potentially be unleashed will make Don Draper quake in his boots. 

 

 

 

 

 

 

 

 

 

 

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Where are brands as life gets personal?
By Greg Paull on 24-Nov-09, 09:27 in Brand |

OK, I’m sorry – I know I haven’t blogged for a while. Thanks to some people at Media for recent ‘subtle’ prompting. It’s mostly because I don’t want to waste people’s time reading anything that isn’t profound. But last night I found it – by accident – as a TED video. To some of you, it will be ancient history, to some of you, it will change your world. Either way, the pace of change in digital technology is happening so fast, we need to re-wire ourselves to keep up.

I’m talking about Pranav Mistry and SixthSense Technology. You can watch the whole thing here. Be patient – the first three or four minutes, go grab a coffee, return some emails, send a few tweets – it’s not so exciting. Then block off the last nine or ten minutes to totally freak your mind out.

For those of you not familiar with TED (there must be someone), it’s a small non-profit, focused on Ideas Worth Spreading. TED stands for Technology, Entertainment and Design. TED speakers have included Biz Stone launching twitter to the masses, Bill Gates releasing a swarm of mosquitoes and even agency types such as Rory Sutherland and John Gezema. TED came to Beijing last month to great success – other Asian soirees are planned.

Anyway – this Pranav dude is just your typical Indian PhD MIT student, ex Microsoft, basically invented a Wii-like interface eight years ago, and last year invested a wearable projector/camera device that will essentially change communications as we know it. As the host declares at the end of the video “you’re probably one of the two or three greatest inventors in the world right now”. More shocking is that he’s developed something totally open-source, meaning it will be commercial faster and more complete than would ever be possible if incubated in a company. I’m already thinking programmers in China and India are working on fresh ideas to make this a reality before you can say “2011”.

What does all this mean for Asian marketers and their agencies?

1. Re-think the way you “listen”
We’ve been lucky the last few weeks to meet with a number of Asia’s best digital agencies. All have impressive “listening” tools in place to tap into the consumer, but the best are taking that further to truly interpret and benchmark where their clients brands are. Consumers have taken control of communications , and innovations like SixthSense will only push this further

2. Create your own incubator

The best digital agencies (and clients) in Asia, like Pranav, have invested in R&D. Some have specific teams looking at new technologies and setting up “Test and Learn” metrics. Nokia and Barclays, for example, are Official Sponsors of TED globally, and accrue a lot of benefits with this group of speakers and attendees – incubating new ideas to the community. This year’s bleeding edge will be next year’s leading edge – so plan appropriately

3. Use Crowd-Sourcing to your Advantage
Many marketers are now using consumers for co-creation – whether it’s Coca-Cola for the 2010 World Cup, Pepsi China for their next summer campaign or Walkers in the UK promising 1% of future sales to the best idea. As technologies such as SixthSense become mainstream, the role of the agency will change from executor to collaborator, and some will be more ready than others for this

4. Set and reward based on metrics
In our recent regional study, we’re a little shocked 44% of marketers agreed with “I’m reluctant to invest more in digital because I can’t measure ROI”. The reality should be just the opposite – the richness of data, mined in the right way, should give unique and compelling insights into the power of new technologies. Dig deep and show it clearly. And agencies can also expect to be paid more – based on the right metrics.

SixthSense might just be the invention of the year – which marketers and agencies in Asia will use it to empower and grow their business?

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China, the clone wars
By Greg Paull on 17-Jun-09, 18:07 in Digital, Media |

My Chinese is still gruesome, but the one word on everyone’s lips right now is shanzhai (山寨). Taken literally, it refers to ‘The PaIace of Gangsters in the Mountains’ – the thought alone adds fear to any brand owner! It started with mobile phones last year, as the cost of GSM production fell so dramatically, the ‘Hi-Phone’ and cheap copies of Nokia, Samsung and others flooded the market. Now around 20% of share is purported to come from this group – to put that in perspective, with 680m phones currently in the hands of users, that’s 136m fake ones. What kind of market share would 136m phones take in your country?

Shanzhai has now become the by-word for anything not real. There’s shanzhai clothing of course, a perennial favourite, shanzhai alcohol, shanzhai construction firms, retailers, anything you can name. Bizarrely yesterday in Beijing a storm came, the sky was pitch black at lunchtime, they’re now calling it the Shanzhai Eclipse, in deference to the planned July 22 eclipse in Shanghai. Last year in our agency analysis, we even found three shanzhai Ogilvy’s or 澳美 – the old man will be quivering in his boots.

But the new clone wars are taking place online and its proving fascinating for all. Of course, the tales are already told of Baidu leading against Google, Youku, Tudou etc leading against YouTube – but now the battlefield has expanded into social media as well, but with some interesting differences.

The Xiaonei, Kaixin001 and Kaixin battle was beautifully covered recently in most trade press, so I won’t repeat it. All three are battling for the ‘Facebook market’ and going through massive growth (all three are significantly bigger than Facebook – as Cheng Binghao , the CEO of Kaixin001 said so well: “If Kaixin001 is a fake Facebook , then why is it still more popular than Facebook in Chinese?”). What’s more interesting is how brands are getting involved and how they are going beyond regular Facebook content. Property giant Vanke has launched an application within the most popular feature, House and Garden. As people come in to grow their own plants etc, they can use Vanke backdrops, and now in Shenyang, Vanke have invited online members to offline events, meeting ‘IRL’ as it were. Lenovo, Unilever, Lancome and Sony Ericsson have also invested in special apps, while a whole host of marketers from KIA to LG to Pizza Hut to Motorola have invested in basic display advertising.

What’s most interesting for these three is not how big or fast they are growing, but what they might become. They have been far smarter than Facebook at looking at revenue models from the ‘get-go’ and with more users online in China now than the entire US population, where will they be in three to five years? Gee, what if they launched an English version? Spanish?

But hey, that’s just Facebook – that’s so last six months. What about shanzhai Twitter? Just seeing those two words together sounds like the best new business idea in China already. Well for a start, Twitter doesn’t have a Chinese user interface – and while it happily accepts Chinese content, that’s going to prove a barrier to mainland growth .

In fact, there’s already four active twitter clones in China, each of them with their own qualities and partners. One of them, Tao Tao is already eating Twitter’s breakfast and lunch – because it was smart enough to partner with China’s 800 pound gorilla of the online world, QQ. By leveraging their massive database, they’ve built great traction. You can sign in with your QQ account, so the whole interface and approach is much more seamless.

The three other kids on the block, Fan Fou, Ji Wai De and Digu , are literally swept up in the wake right now. From a user interface point of view, they are all pretty similar, but Digu has some cool features – bringing in celebrities to boost traffic and raise awareness, as well as linking your posts to a central Digu control panel

Digital pundits such as Rand Han see this as ‘the killer app’ to the next stage of social networking growth – and I have to agree. Who has time to visit Facebook, Twitter, MySpace and their shanzhai competitors, when I can go to one central place and update everything at once? Gee, this means that the next time one of my twitter followers goes to get a haircut and tells me, I will have that message in multiple places instead of just one.

The conclusion? Go invest in the IT server business – we are going to need them.

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Twits, "No-Friends" or Real Business?
By Greg Paull on 15-Apr-09, 21:41 in Uncategorized |

Let me start with a diversion – twitter is SO LAST YEAR – I’ve already moved on to flutter.

http://tinyurl.com/cfdfph

Or rather  – -    I’v rdy mvd flttr …$coke

I’ve been watching twitter from the sidelines, but have now found it somewhere I have to go every day , almost religiously.   I’m wondering which of the three criteria in the headline I fall into – maybe all of them. 

How can a company of thirty people, with virtually no logical revenue strategy have captivated the world like this?  Twitter now has 360 million search results on google , God has 450 million.  Give it a month. 

The jury is still out though on how twitter will emerge as a business tool , particularly here in Asia.    Interestingly, Dell claim they have already made $1m of sales last month on twitter (yes….twitter).  That pales against their $46b in annual turnover, but don’t lose sight of the marketing costs (zero) for this effort.  Already travel agents and hotels are getting on board in the US.   Trip to Hawaii this Friday for $499. Click here. 

A lot of agencies are experimenting with the medium.  WPP (http://twitter.com/wpponline) are dumping press releases.  Mindshare (http://twitter.com/MindshareGlobal) is talking about research, albeit slowly.  But right now, tweets are relatively public – so if you’re going to jump in, jump in and do it properly.  DDB China (http://twitter.com/ddbchinagroup) was naked two months ago, but now has 100 followers.  Two months is a lifetime in twitteryears.    And please, keep it relevant. I recently stopped following a PR agency CEO in Beijing when he sent three tweets about “preparing for haircut”, “getting haircut” and “finished haircut”.  Not the insight into the market I expected  – especially given my follical challenges.

If you’re a marketer, figure out for yourself how you or your agency can use it to seed relevant information.  Do a trial.  Make a test.  

If you’re an agency , its a great recruitment vehicle,  a great way of engaging feedback within a network (if you protect your followers)

If you must know, I find it one of the most interesting newsfeeds on the web.  Too damn much is happening in China right now to just rely on standard news.   Kaiser always has his finger on the pulse – http://twitter.com/kaiserkuo  .  Maggie Rauch http://twitter.com/rauch22  tells me more about sport in China than I could ever read.  The WSJ China Journal always has a fresh perspective -  http://twitter.com/ChinaJournal .   And for men (and women) who cannot live by business alone, humor can come in 140 characters – http://twitter.com/TheOnion

Twitter ain’t going to go away. Go online and try it out.  But please – keep your haircut secrets to yourself

 

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