E3 global insight magazine issue15

Global Insights Magazine Issue 15 – Edited by Adsmith China 2013

e3 insights

Inside this issue

What can we learn from Asia?

3 7 10 11 30 years of branding in China

Marketing Sans Frontieres

East vs. West: The difference in advertising & design styles

Spotlight: The social media landscape in China

GO EAST YOUNG BRAND! Asia is incredibly diverse – from the big cities of Shanghai and Tokyo to the countryside of Southeast Asia – languages, religion and culture vary. How can brands tackle entry into Asia, when in India alone there are hundreds of languages spread across 1.21 billion people? And let’s not forget about Australia – also a vital member of the APAC region. Serious research and planning is a must for any brand spreading their wings into Asia.

For B2B brands there is a concerted lack of marketing expertise in Asia – or possibly a lack of investment. For example, a German brand initially set up for manufacturing in China for export elsewhere begins to shift sales to the domestic market in Asia. Often the marketing manager comes from the manufacturing side, or little budget is set aside for proper marketing materials or campaigns. Brands that do it right can bring the best of their global branding and messaging and combine it with local expertise – but they should be prepared to invest and to be patient.

Messages, and even brand names, often get lost in translation. It may not be necessary to “reinvent the wheel,” but translated material can end up becoming a strange hodge-podge of content if the concepts do not translate well. So as marketers, we have to look at the source material as well as the target market, and adjust the messaging for our targets. Truly understanding the target market is so absolutely crucial here.

Channels are also very different from the West. Imagine China – no Facebook, no YouTube, no Twitter…your global marketing strategy just took a left turn! As an American who has spent the last 15 years in Asia, it is actually these differences that are the most interesting to me and what makes our jobs so much fun!

olden

Mike G

tor g Direc om Managin china.c h it adsm mike@

2

30 years of brand building in China Chinese people who grew up in the 60s and 70s can hardly recall 10 brands from their childhood; back then, there were few manufactured products and most of them were unbranded. Two generations later, it would be a challenge to find a Chinese urban lady who can’t name 10 brands of luxury bags.

Since most brands and product categories did not exist 20 or 30 years ago, there is no ‘brand legacy’ across generations: In mature western markets, brands tend to pass from generation to generation: if your parents used Colgate, you are much more likely to buy Colgate for the rest of your life. In China, brand preferences differ greatly across key demographics (age, income, rural or city residents, etc…). We also see numerous cases of fast moving consumer goods (FMCG) products and brands introduced by children in the household.

With so little history and legacy in consumer minds, brands setting up in this market at that time had the unique opportunity to do it from a blank piece of paper. This made even more sense in the light of China’s huge and fairly isolated population. As a result, we witness today huge differences in brand positioning and offerings between China and other countries. The general recipe of success for foreign brands was to project some cliché elements from the country of origin and totally revisit the local offering.

Brands were focused on creating new needs, growing their market base while at the same time keeping leadership in their category. There was a clear advantage to early comers with a long term vision and means to back it up such as Nescafé who introduced instant coffee to China in the mid 80’s and has been defining coffee consumption and lifestyle since then.

Developing market awareness was – and still is in many consumer markets – the main focus of brands, through massive (and often simplistic) ad campaigns, often riding on the fame of local celebrities acting as ‘brand ambassadors’.

e Deban Arnaud ager n a M l Genera hina rands C Superb

Along with the emergence of middle class and wealthy consumers, Chinese people started to turn to brands as symbols of lifestyle, social status or personality. In a Chinese culture that traditionally values uniformity, brands provided a unique way for individuals to assess and state their personality. Today, as consumer markets are becoming and more mature and competitive, brands start to target smaller sets of clients and differentiate along a set of values. In the setting, brand awareness is less relevant – customer interaction and engagement are the names of the game. Social media proves to be the ideal platform to support such interaction; it enables a brand to engage directly and efficiently target customers and can provide an environment for customers to express their personality. Consumer brands are now investing heavily in ever more creative and sophisticated campaigns combining hard advertisements, couponing, promotions and social media with mobile device localization.

3

Interesting Marketing Facts About The Asia-Pacific (APAC) Region

4

Country

Australia

China

Hong Kong

India

Indonesia

Japan

South Korea

New Zealand

Philippines

Singapore

Thailand

Vietnam

Marketing Facts

Interesting Marketing Campaigns Tourism Australia launched a new tourism campaign focusing on Australia’s natural beauty.

social media penetration

96%

mobile penetration

125%

social media penetration

53%

mobile penetration

78%

social media penetration

93%

mobile penetration

214%

social media penetration

95%

Chennai's Tapas bar, Zara's joined efforts with Chennal City traffic police to create a social

mobile penetration

78%

YouTube, this video generated up to 85,000 likes and immediately became popular.

social media penetration

94%

A public health campaign was launched in Indonesia, testing the limits of an actress. It

mobile penetration

105%

social media penetration

58%

mobile penetration

106%

social media penetration

87%

E-Mart solved their problem with slow crowds during lunch hours by introducing a new

mobile penetration

110%

and 1pm, in the form of a special offer or daily promotion. Marketers were excited that

social media penetration

95%

mobile penetration

117%

media, you moved further up the virtual line, and eventually earned your place in the

social media penetration

96%

Volvo invited Faith Dickey, a world class rope walker, to cross a rope tied between two

mobile penetration

94%

garnering over 5 million views on YouTube in less than a month.

social media penetration

94%

Coca-Cola positioned itself as a non-threatening ally to affectionate youth by creating a

mobile penetration

147%

social media penetration

96%

The Thailand Convention and Exhibition Bureau introduced "Thailand Connect", a global

117%

next year. The new campaign focuses on three key strategies: a diversity of destinations,

mobile penetration

This new campaign cost 250 million USD.

Extra's ongoing advertising campaign portrays a love story between two young people while highlighting their gum product. Combined with celebrity actors and detailed background music, the campaign has been very successful at reaching the younger generation.

By shaking their smartphone at Coca-Cola's new television commericial, customers could collect bottle caps that earned them mobile games, discounts and sweepstakes entries.

This app reached the top of the local app downloads for iOS in a single day, receiving 380,000 downloads in one month.

media initiative that raised awareness for drunk driving. Within hours of being uploaded on

required the actress to smoke a total of 100 cigarettes for a commercial, portraying the lack of glamour from smoking.

Japan's most popular ad family, 'The Whites' remains #1 with viewers for the past six years. 'The Whites' family' has become a staple of telecom Softbank’s marketing by being the most popular recurring commercial characters in Japan.

sun-based QR Code for shopping convenience. The QR Code is revealed between 12pm sales increased during lunch time by a whopping twenty five percent!

Samsung launched the 'Smart Phone Line' app so that customers could virtually line up to purchase the new Galaxy S4. By sharing the S4 features released every day on social purchase queue.

moving Volvo FHs with a time bomb element. This video stunt ad quickly become viral,

Coke vending machine that responds only to the currency of hugs.

marketing campaign with the goal of generating almost Bt100 billion in revenue over the unrivalled business opportunities, and high quality of Thailand's MICE (meetings, incentives, conventions and exhibition) professionals.

social media penetration

94%

mobile penetration

147%

WWF and TRAFFIC have launched an ad campaign depicting a rhino with human feet in place of its horn. The campaign provides a though-provoking visual to communicate to citizens that rhino horn is made largely of keratin, the same substance that makes up human finger nails and toe nails. The print adverts conceptualized by Ogilvy & Mather Viet Nam hope to stop the poaching crisis and debunk the widespread myth of rhino horn's curative properties.

5

Case Study: Hamilton Beach: Showing Chinese Consumers the meaning of “Good Thinking” in Cooking Situation Analysis: American small kitchen appliance brand Hamilton Beach launched into China in an attempt to penetrate a very lucrative market. The brand met with several obstacles such as low brand awareness as well as intense competition from larger kitchen appliance brands that have had a longer market presence and larger distribution network. Hamilton Beach needed to devise a marketing strategy that would help set them apart from the competition while at the same time add value to consumers seeking a better and more premium lifestyle.

Solution: After conducting some qualitative research as well as a competitor analysis, we developed a strategy based on a key consumer insight: the Chinese target audience wanted to learn how to cook Western/ International cuisine in order to show that they have attained success in their lives. As a result, we developed the brand strategy: “My Culinary Companion: An Inspiration for a Premium Lifestyle for both Family & Friends”. Rather than trying to be too hard sell, we focused on positioning the brand as a consultant who would teach the eager consumers some cooking tips, share some recipes, and would also encourage people to share their culinary experiences online via the different platforms.

We also implemented the following activities based on the brand strategy: a. Launched a media outreach plan aimed at telling the brand story of Hamilton Beach that focuses on 100 years of American innovation as well as the Good Thinking behind the brand’s product features b. Launched a social media campaign that leveraged promotions on Weibo (Chinese Twitter) as well as Key Opinion Leaders (KOLs) who have a strong fan base interested in cooking, sharing recipes, and culinary experiences

6

c. Generating relevant online content that is strategically inserted into the relevant channels in order to position Hamilton Beach as an expert in cooking/ recipes as well as small kitchen appliances

The Results (so far): The campaign has generated some comprehensive media coverage (16 media clippings within 2 months, with a total of 703,500 impressions), most especially in online sources linked to lifestyle. In addition, we managed to increase the number of Weibo fans by more than 100% thanks to the seasonal promotions that we implemented. Furthermore, we succeeded in engaging fans online through KOLs and chat forums, thereby driving more traffic to the brand website, the Hamilton Beach Weibo page, as well as the brand store on T-Mall.

Good Thinking

Marketing Sans Frontieres Working collaboratively brings out the best for brands – local agencies can help marketers understand what works best in their markets, but without losing sight of the brand’s international goals and vision.

Magna Steyr Adsmith worked with SPS Marketing in Austria to support Magna Steyr, one of the world’s key automotive parts manufacturers, to develop a completely Chinese version of their HR video series “My Life.” My Life features employees from the Chinese HQ of Magna Steyr – portraying their work and free time environments. SPS in Austria helped with the storyboard and post-production, ensuring world quality standards, while Adsmith China handled the local video shooting and script writing.

Metsa Fibre Helsinki-based Recommended Finland and Adsmith China have collaborated for over 3 years to develop marketing materials for one of the world’s key paper pulp producers, Metsa Fibre. This included developing the key graphics and text in Finland, followed by Chinese text development and editing in Shanghai.

Stubb’s Shanghai Stubb’s is a famous BBQ restaurant from Austin, Texas, and also the brand owner of Stubb’s BBQ sauce, found in supermarkets across the USA. Entering Shanghai with their first restaurant, Stubb’s came to Adsmith China for help developing the marketing materials as well as PR and social media strategy. In need of a website based on the latest technology, Adsmith collaborated with Swiss E3 agency member Duck Dive to design and program the Stubb’s China website.

7

The New Influencers First published in The Melbourne Review, October 2012

By David Ansett, Founder and Chief Creator of Brands, Truly Deeply

Since the spread of the printing press across the globe more than four hundred years ago, media has played an influential role in what we think and the way we feel about everything from politics and social issues to business and brands. Over the last century, the influence of media has grown exponentially with the advance of technology. The impact of mass-distributed newspapers and magazines, radio and television has reached further and deeper into our lives. The few who own and control these valuable media interests have the power to exert their views – paid-for or otherwise – in an extraordinarily influential manner. In the USA just five companies; Time Warner, VIACOM, Vivendi Universal, Walt Disney and News Corp generate as much as 95% of all mainstream media. But as technology spins ever faster, we’re seeing the emergence of a new breed of influencers who play by a completely different set of rules.

In less than a decade, we’ve witnessed the rise of bloggers to a position of real influence. In a trend that’s still growing, the gap between those who consume traditional media, and those who read blogs is closing – and faster than most comprehend. In the USA, the most widely read newspaper is the hundred year-old Wall Street Journal with around 65 million readers each month.

Comparatively, U.S.-based news and opinion blog; The Huffington Post is not far behind, building a readership of around 54 million in just seven years.

However, influence cannot be measured by readership figures alone. Research has shown blog readers to be

8

considerably more polarized than consumers of traditional media. Demonstrating that word of mouth is being supplanted by ‘word of mouse’, online readers are gravitating towards blogs that accord with their personal interests, beliefs and philosophies, drawing more accurate comparisons with television programs and magazines.

A glance at magazine circulation provides another startling insight into the strength and popularity of today’s bloggers. Time magazine - an icon of U.S. publishing - has a monthly readership of just over three million people, compared with the business news blog; Business Insider, which has a readership of more than twelve million. People magazine with a readership of three and a half million compares no more favourably with celebrity news blog Perez Hilton, read by more than ten million people each month. And whilst magazine publishing is defined by geography, the world’s bloggers assert influence without borders, dipping-into the richest local scenes around the world in a way traditional publishers never could.

But perhaps the most critical ingredient of influence is the bloggers’ independence. Disconnected from any sense of editorial or commercial direction, bloggers are seen as enthusiastic, independent passionistas a powerfully positive credential. As the influence of bloggers has grown, so-too has their value in the eyes of brands from fashion to food, from travel to politics and beyond.

Once seen as enthusiastic amateurs, bloggers are now a front row fixture at the highest profile fashion shows and paid columnists in the pages of world famous fashion magazines. Fourteen year-old American blogger Tavi Gevinson who blogs as The Style Rookie is a front row regular at Marc Jacobs shows and a columnist for Elle Magazine. Other established fashion bloggers; Fashionista, Bryanboy, Susie Lau of Style Bubble, Geri Hirsch of Because I’m Addicted and Scott Schuman who’s also known by his blog moniker The Sartorialist are considered ‘must invites’ for up-and-coming and established fashion houses. At the Swarovski New York Fashion week last year between 10 and 20 percent of media invited to each show were bloggers. “Bloggers are increasingly important to us and we invite a select group of 35 to 40 to the show,” said

Eric Delph, Vice President of public relations and marketing at Nicole Miller. “Moving more bloggers into seats and putting some as far up as the first and second row was a priority.” Fashion designer Prabal Gurung agrees “Blogging opens the door to greater brand recognition and familiarity to a younger generation. It is an approach to marketing in a more unconventional way that is becoming almost the norm.”

Like their fashion peers, food bloggers have also stepped out of the media shadows. Leading food bloggers such as Pim Techamuanvivit of Chez Pim and Clotilde Dusoulier of Chocolate & Zuchini fame have a readership that exceeds those of many traditional magazines in their space and are feted with book and TV deals. The Australian hospitality industry is also fast coming to terms with the influential role of bloggers. Melbourne food blogger Jess Ho was recruited by hip Melbourne eatery Chin Chin as part of their social media strategy. Ms. Ho who runs the blog; ‘That Jess Ho,’ was employed when the restaurant launched in a dual role as front of house and social marketer. Chris Lucas, owner of Chin Chin, was attracted by Ms. Ho’s blogging and public relations background, ‘’She understood the space and she had credibility in that space,’’ he said.

Another category to have shot to prominence is mom bloggers. In the USA there are now almost 4 million mom bloggers, including Rebecca Woolf of Girls Gone Child, Jenny Lawson from The Bloggess and Catherine Connors of Her Bad Mother who have become household names amongst their audience. Of the 32 million moms who go online each month, more than half of them visit a blog. With a combined readership of more than 50 million moms each month, this category of bloggers are becoming heavy hitting brands in their own right with book deals and spots on CNN, Today and Good Morning America.

Fashion blogger Phoebe Montague of Lady Melbourne sees an increasing awareness by brands of the subtleties of social media; “Brands are not only asking for a mention on the blog but wanting to be mentioned on my social networks as well. They are far more aware of the reach of Twitter and Facebook and usually want to know how many followers or likes I have.”

A common thread for bloggers and a powerful differentiator from traditional forms of media is their absolute love for what they do; their shared passion for writing, for connecting with their online community, and most importantly their pure passion for the subject matter. Rohan Anderson, Author of food blog Whole Larder Love says; “I love writing the blog, it’s just part of my life. I do like having a subversive message of being a little more involved with where your food comes from, and my hope is that people can take notice of my example of an alternative life.” Hillier of Checks and Spots tells a similar story; “The reason I blog is to simply share. I love sharing with others the things, people, places and trends that I discover. I love sharing in the sense of community that Checks and Spots has created. And I love the chance to meet people from all over the globe that I share interests and passions with.”

It’s precisely this undercurrent of passion that both fuels the blogging industry as well as provides its critical point of difference from traditional media. And this passion also plays a critical role in managing the conflict that arises when brands seek commercial relationships with bloggers. As Lady Melbourne’s Phoebe Montague sums-up; “It’s a pretty simple formula: I only blog about what I love. That keeps the checks and balances pretty even.”

9

The difference in advertising styles: East vs. West Advertising and visual communication is without a doubt an essential component of every company’s marketing strategy. As technology continues to improve and break cultural, as well as linguistic barriers, the art and science of marketing certainly becomes much easier.

That being said, it is important to note how important and applicable HSBC Bank’s motto is when it comes to advertising and graphic design: “Think globally. Act locally.” Having a consistent style, tonality, and message is no doubt imperative to a company regardless of the market in which it operates, but so is a deep understanding of local market dynamics as well as cultural and linguistic differences.

So what are the differences between Western and Eastern design styles? The following explains the DOs and DON’Ts of designing from an Asian target audience perspective (our main focus here will be for a predominantly Mandarin-speaking demographic):

Eastern Design

Western Design

Color • A lot of black & white is used, as it represents purity, style, & looks clean • Bright colors or any multi-colored combination are normally avoided as it would make the design look too “loud”

• Black is avoided because it represents misfortune • White is the color used during funerals (linked to death) • Red, gold, & yellow are welcomed as they symbolize good luck, fortune, prosperity, & good energy

Shapes • A lot of straight lines are used • No large discrimination between the usage of round, rectangular, or triangular shapes

• Round shapes are encouraged, as they symbolize unity & harmony • Triangular shapes or sharp edges are avoided, as they represent bad luck

1 Symbols/Numbers • Strong visual imagery is often used to represent a marketing message or a brand • Numbers often have either a Biblical representation or a link to some common Western folklore or stories

• Need to be careful when using Chinese characters in the design layout, due to their double meaning • Avoid numbers such as 4 (anything in groups of 4), as the Chinese word for 4 sounds similar to the Chinese word for death • Use numbers such as 6, 8, & 9 as they bring good fortune

f

Spacing/Font & Type Treatment

• Modern Western design calls for simple, clean, yet striking layouts

10

• Empty or “clean” spaces in a design layout are generally considered boring or not outstanding enough

• Font/type treatment: clean & new types of fonts are pre-

• Be careful when using Chinese characters in the layout,

ferred into contrast to older ones, & there is also the flex-

as the spacing & size are not the same as letters of the

ibility of being able create strong visual imagery using

Roman alphabet

Western fonts

Spotlight: Chinese social media With almost 600 million internet users, China’s internet sphere is massive. Instant Messaging, Search, Music, Microblog, Games and Video are the most popular applications on the net – and all of this in a place where most Western social media (Facebook, Twitter, YouTube) is blocked.

Have no fear – Chinese have grown their own social media sites: Weibo, WeChat, Douban…some are copycats of Western sites, some are completely original.

Qzone

712

Tencent Weibo

507

Sina Weibo

500 300

WeChat Pengyou

259

51.com

200

Renren

172

Douban

172

Kaixin 001 Jiayuan

113 73

* Millions of registered users, 2012 Weibo, similar to Facebook, boasts 500 million registered users – but the number of active users is only 10% of that number, according to recent studies. Chinese are brand loyal: 66% of users follow brands, and the average user follows 8 brands on social media.

Marketers in China typically user key opinion leaders – bloggers and microbloggers with substantial followings – to put out key messages, new product introductions and brand information. Seeding content across blogs and forums is also a common practice. Brands must be wary to monitor the web carefully for negative comments posted not only by disgruntled customers, but also their rival brands.

11

Ten Things to Consider Before Launching your Brand in China 1.

Prepare to be persis­ tent and patient. Take your business plan and double or even triple the amount of time.

2.

China isn’t that cheap anymore.

3.

HR Headaches. Hire the best people you can find. And then be prepared to let them go after major disappointments.

4.

Visit China 10 times before starting any­ thing. Talk to as many people as you can.

6.

5.

Be aware that ‘mainland’ China, Taiwan (Mandarin or Standard Chinese) and Hong Kong (Canton­ ese) use different speech as well as written characters. You will need separate entry strategies for these regions.

Make sure your business has a Chi­ nese brand name and that you trade­ mark it in China.

7.

Be sure to make business cards (preferably with Chinese and a Chi­ nese version of your name) before visiting. Don’t use Google Translate for this (one client showed up with “Black Conquer Death” on his card).

8.

Brace yourself for long banquets with potential clients. These may include toasting red wine in shot glasses, long pours of warm beer, and unidenti­ fiable meats. Sucking this up is what ‘culturally sensitive’ means.

9.

Keep control of your brand image and marketing col­ laterals. Keeping your inter­ national image is important; the local marketing agency can help make sure the text and photos make sense in Chinese and portray your brand identity and position correctly.

10.

E3 Network

Last but not least…don’t be scared off by all this!

The market in China is fantastic and Chinese are ready to do business.

Adsmith / China Advertigo / Romania Aloft Group / USA Ansel & Möllers / Germany Audacity / USA Base One / UK BB&B / France BBC / Belgium Bernstein / Germany BMLab / Russia Café Design / Hungary C&COM Advertising / Czech Republic D.A.G. Communication / Italy Epoka / Poland Igriega / Spain Maitri Advertising Works / India Media Consulting / Portugal Oz Branding / Israel Preferendum / France Rainfall / Romania Recommended / Finland Recommended / Sweden S’P’S Marketing / Austria SanderWerbung / Germany Schindler Parent / Germany TANGRAM / Liechtenstein TANGRAM / Switzerland Truly Deeply / Australia

E3 network

B2B Communications

Adsmith

The E3 Agency Network is a closely integrated

The E3 Network offers global expertise in B2B

This issue of the E3 Global Insights

coalition of independent brand strategy and

communications. To connect with customers

Magazine was published by Adsmith

marketing communications firms from around the

around the world or in your home market,

China, a creative agency specializing

world. With access to this wide pool of talent,

please contact b2b@e3network.com

in PR & digital solutions in China.

E3 agencies give clients a real chance to make an impact nationally and internationally.

Adsmith China, 3E Anken Green

Find out how the E3 perspective can help you.

668 Huai An Road, Jing’An District Shanghai PRC 200041

www.e3network.com

Tel.: +86 21 6083 1123

Administration: veerle@e3network.com

www.adsmithchina.com info@adsmithchina.com