One Successful China Strategy

Sales for Estee Lauder’s cosmetic products increased in the fourth quarter driven by a 33% increase in the Asia-Pacific region. Central to the APAC growth has been China where “a savvy local strategy that includes a 50-person dedicated team, branded Tmall storefronts, and freestanding e-commerce sites” has successfully expanded the brand’s presence.

Underlying the local Chinese strategy is the company’s overall digital technology investment that has increased online performance and has helped the company see five consecutive quarters of growth.

Dennis McEniry, president of the brand’s online business, articulated the secret, “China is a unique market. Product preferences and descriptions used in marketing are different. Social media and influencers are important, but the way to navigate that space is nuanced. Being locally relevant is key. We don’t take programs and strategies developed in New York and just launch them in China, because it won’t work.”   Source: Businessweek; Digiday

Five Ad Fraud Defense Strategies

At this point, ad fraud is thought to be so pervasive, it is challenging formerly trusted business relationships.  Action must be taken.  Best practices suggest that all five of these ideas should be part of your regimen.

  1. Use third-party ad verification. It has been shown to block billions of questionable impressions and have reduced fraud by as much as 86%.
  2. Use ads.txt, IAB’s initiative to reduce spoofing, which protects publisher’s inventory from being highjacked by malevolent forces while authenticating the inventory for advertisers.
  3. Document internal policies and procedures that fight ad fraud.  Internally, this will standardize the company’s practices for handling fraud.  Externally, transparent reporting will instill customer confidence.
  4. Machines are great, use them.  Third-party verification is great too, but your own data can augment the standard approach of outside players.  The benefits are worth it.  You will learn about subtitles in your own business that no outsider will see and given the ever-changing activities of the fraud makers, being in front is a good thing.
  5. Machines are great, but the importance of human review must be recognized. Our friends at FaceBook learned the hard way that they needed to hire many more human reviewers to assure the ads they deliver are legitimate and appropriate.   Source: Forbes

Confidence in the 60th Percentile

 

Confidence in the 120s suggests Chinese consumers are relatively positive as they look into the future.  On this scale, 0 is disaster, 200 is nirvana and 100 is neutral.  This level of positivity is in line with other data coming out of China making it believable.  As long as the Chinese consumer expresses this kind of confidence they are buyers. Sources: Tradingeconomics.com; Nat’l Bureau of Statistics, China

China’s Leading Economic Index Hits its Highest Point in Five Years

 

Where most other indices coming out of China are positive and steady, China’s Leading Economic Index hit its peak for the last five years in November. That indicates the positive flow is likely to continue and even improve, which is consistent with indicators in the broader world economy.  Source: National Bureau of Statistics, China

Eight Drivers Behind the Move to In-House

 

We have written about the trend to bring programmatic systems in-house at many media companies.  New data from Centro in which more than 150 digital media professionals were surveyed reveal a myriad of reasons behind the shift.  Control is by far the lead driver, but seven more strong motivators taken together probably would be enough to push the trend forward without the need for control.  Half of the reasons given have to do with money – in coming or out going.  Together they are at least as powerful as control.  Sources: Centro; Advertising Perceptions

Coming US – China Parody: Retail Sales

If one asks why we spend so much time watching the emerging middle-class in China, this graph is the reason.  According to projections made by Japan’s Mizusho Securities 2018 is the year that retail sales in China will, for the first time, be equal to sales in the US. Both countries are approaching the six trillion dollar mark.  Many US multinational companies get a significant share of their sales in China – not a surprise.  Many smaller US companies should be considering how they too could grow their sales by approaching the Chinese consumer. Source: Washington Post

Must Have Anti-Spoofing Protection

TAG, the Trustworthy Accountability Group, has created ads.txt as mechanism for publishers to fight ad spoofing, a leading form of high jacking ad revenues meant for legitimate publishers by legitimate advertisers.  Advertisers pay for an audience unreached and publishers lose revenue rightly earned.  It’s estimated that thieves siphon out of the system between $6 and $16 billion annually.

Ads.txt creates a digital handshake between publishers and inventory resellers, which makes them an authorized reseller, a safe bet for advertisers.

To get TAG’s seal, which certifies a publisher against fraud, ads.txt must be implemented by June 2018.  A new AdForm survey of top sites claims 82% compliance in the US and an average of 70% worldwide.   Seems we are beyond the tipping point where legitimacy is required.  Source: AdAge; MarketingLand

More Healthy, Steadiness in the Chinese Economy

December’s consumer price data is yet another indicator of an economy that is moving steadily in a good direction.  It is not racing up or down, rather it is consistent with other numbers such as the equally steady inflation rate we reported last week. The 101.8 sits just two tenths above the 13-month average.  Sources: www. Tradingeconomics.com; National Bureau of Statistics of China

Reasonable Parameters

China’s inflation rate has hovered around its current 1.8 for the last six months, which averaged 1.7.  This is a case where no news is good news.  Coupled with a steady GDP, reported earlier in the week, the Chinese economy is not on fire in either direction.  Given where it came from, its blazing GDP of the past was understandable, but unsustainable over the long haul.  This economy appears to be healthy and more mature within reasonable parameters.  Sources: Trading Economics; National Bureau of Statistics, China

Projected Programmatic Growth: 13.6%

 

According to Zenith research programmatic delivery of digital advertising will increase by 13.6% worldwide by 2019.  Leadership in the world comes from three English speaking countries; Canada, the US and the UK.  In terms of dollars driven through the pipes, the US is by far the leader with $32 billion followed by China’s relatively merger $5.3 billion.  Given its relative low programmatic penetration, China’s market will be a major factor in immediate -term growth of programmatic usage.

Jonathan Barnard, Zenith’s Head of Forecasting and Director of Global Intelligence, noted, “The most advanced display markets will be 90% programmatic by 2019….The question then is how rapidly programmatic techniques will spread to other media.” The US is the leading indicator for the rest of the world.  Source: Zenith’s Programmatic Marketing Forecasts