Bencham.April.Louvain

Slide 1: Weapons are an important factor in war, but not the decisive factor. It is people, not things, that are decisive. Slide 1

Slide 2: Why I came to China? • In advertising in Belgium since 1978 • Worked as [everything form copywriter to CEO] within an ad agency called LVH/Alliance. • Entrepreneur since 1991: founded Quattro which is now S&S Brussels • 1st on the web in 1994 • Created i-merge [now Boondoggle in Europe] in 1998 as a Quattro business unit • Officially incorporated in 2000 • 3 partners [ir,psycho and me] + vc [Capricorn] • Offices in Be, Nl, Ire … and China • 100 fet in 4 countries • China? – Not only to sell the regular services (marketing, strategy, concept development) – Bank on our [sizeable] media & technology knowledge in China • Size (market, population) • Growth of advertising and much more. • Mobile • Databases and “human media” Slide 2

Slide 3: Projects in China 13 Staff: 1ceo, 1office manager, 1CD, 2 designers, 4 am, 1 IT, 2 sales and me Next to pure advertising projects (Flanders, Jahwa, Marvelon, Yue Sai, Sloggi, Bencham …) we mainly develop media/tech projects with and for … Online mobile payment Mobile social network QuickTimeﾪ TIFF needed to see anddecompressor a are (Uncompressed) picture. this Loyalty platform On site behavioral targeting Silk art E-commerce Bluetooth POS Media Slide 3

Slide 4: It does not matter how slowly you go, so long as you do not stop. Slide 4

Slide 5: 积极推荐带来的额外收入 Extra Income realized by recommenders 品牌积极口碑传播 最后实现的真实收入 Promoters Real & final value for your brand! Recommenders Influencers 对品牌 保持缄默 品牌消极 Silent 口碑传播 majority Detractors neutral Negative promoters 消极口碑造成的收入损失 Potential Income destroyed 原收入 by negative word of mouth Initial Income realized Slide 5

Slide 6: 最后实现的真实收入 Real & final value for your brand! Slide 6

Slide 7: Recommendation value (future) Monetary value (actual) 5-15% of consumers Slide 7

Slide 8: If you think in terms of a year, plant a seed; if in terms of ten years, plant trees; if in terms of 100 years, teach the people. Slide 8

Slide 9: The 3 moments of truth for a brand 1. Is the advertising (relevant) (creative) acquisition (impactful) (persuasive) enough for me to even consider buying the product conversion 2. Is the product / service fully delivering the promises made during the pre-usage period? retention 3. I am so happy about my choice that it recommendation is very likely I will recommend the brand to friends, colleagues, neighbours … Slide 9

Slide 10: The value of the 3rd moment of truth Slide 10

Slide 11: Measure the Recommendation Power of your brand! Slide 11

Slide 12: Recommendation behavior in China • On average, one consumer communicates in one month with 8 people about brands. • 17% of the consumers talk about brands with more than 10 people monthly. 5 12 (%) 38 Mean: 8 people 43 2 11-20 More than 20 No one 1-5 people 6-10 people people people i-merge | sinomonitor research Slide 12

Slide 13: To learn a new brand or a new product • The Internet is the most important medium for the consumers to learn about a new brand or a new product, followed by TV commercials. • Comparatively, male consumers tend to choose the Internet and the newspapers. Women are a bit more TV-minded. • Older people are more likely to get the information from the newspapers. • The higher the education, the higher the percentage of people using the Internet. Total Sex Age Education (%) 93 91 95 the Internet 90 90 92 87 91 86 TV commercials 80 76 81 81 83 85 81 82 80 Newspaper ads 42 47 50 48 44 49 47 62 49 Outdoor poster 16 23 27 19 24 18 18 13 19 Magazine ads 13 16 14 15 15 15 Friends 18 10 15 9 11 12 12 12 11 Master and sales material/ salespeople 16 11 12 above Base=113 20-29 Bachelor 8 10 Base=520 4 /undergraduate Radio commercials 8 6 7 8 Male 6 30-39 10 Base= 757 Base=711 Base=521 Junior college Total 5 Female 4 40-45 4 and below 5 Base=1200 4 4 Base=330 4 Base=489 7 Base=159 5 i-merge | sinomonitor research Slide 13

Slide 14: For regular information • 98% of the consumers want to stay informed regularly about a brand after they buy it. • The Internet is the main medium people use to get regular information about a brand. Want to stay informed The ways to stay informed Consulting the Internet 91 (%) Watching TV 41 Going to the shops 41 Asking friends with experience 98% 35 Yes Reading newspapers 30 2% Reading magazines 29 Phoning the manufacturer 15 Watching Outdoor posters Ye s No Listening to the radio 14 11 i-merge | sinomonitor research Slide 14

Slide 15: • As for the respondents themselves, the Internet is the most effective medium when they decide to buy a brand, and the second most influential medium is their friends. • However, the respondents deem that for their family and friends, friends’ recommendations are the most important influencing factor and the Internet is the second one. • 7% of the respondents think that they themselves can influence their family and friends the most on purchasing decision. Top 5 influential media For the respondents For the respondents’ family and friends 1 Internet 49% Friends 34% 2 Friends 28% Internet 31% 3 TV 14% TV 19% 4 Salespeople 4% Me 7% 5 Newspaper 2% Newspaper 5% i-merge | sinomonitor research Slide 15

Slide 16: Influence power • The influencers are more likely to communicate about brands because of their using experience rather than the brand reputation. Influence power Communication possibility of the influencer (%) (%) Recommend because of My peers have 84 satisfying experience bought 31 something I Recommend because of recommended 36 positive brand reputation My peers have Complain because of given up 77 dissatisfying experience something I 26 complained Complain because of about 44 negative brand reputation Base=all consumer respondents Base=influencers i-merge | sinomonitor research Slide 16

Slide 17: Ways to communicate • Nearly 90% of the consumers communicate with others about the brands face to face, which is the most popular way. • Using instant messages and phone calls are also common ways people communicate. (%) 87 62 50 31 18 17 Face to face Use instant messages Phone them Send SMS Send an e-mail Blog about it i-merge | sinomonitor research Slide 17

Slide 18: You can't solve a problem? Well, get down and investigate the present facts and its past history! When you have investigated the problem thoroughly, you will know how to solve it. Conclusions invariably come after investigation, and not before. Only a blockhead cudgels his brains on his own, or together in a group to "find a solution" or "evolve an idea" without making any investigation. It must be stressed that this cannot possibly lead to any effective or any good idea. Slide 18

Slide 19: 对话结构 Conversation Architecture MESSAGE 信息 EXPERIENCE 经验 CONVERSATION 对话 COMMUNITY 社团 关系 RELATIONSHIPS AFFINITY 亲和力 Slide 19

Slide 20: I hear and I forget. I see and I remember. I do and I understand. Slide 20

Slide 21: Use data to find recommenders. And communicate with them The starting point for all excellent interactive brand campaigns (with a high ROI), is the creation of a continuously growing interactive database with customers (friends, fans...) & prospects, that is continuously updated and enriched. Digital & interactive media can help you build that database 8 Unidentified prospects database Identified prospects & clients Slide 21

Slide 22: 8 philosophy 8 字思维 Slide 22

Slide 23: The data potential of recommendation through social networking. • TVC • Newspaper Consumer interaction • Magazine database • Radio keeps track of # data • Outdoor P1 P2 concerning all • Events P3 these interactions • Web P4 • Mobile P5 •Who saw, clicked, forwarded • ….. P6 P7 •Where did it happen P8 P9 •What was the interaction P10 •When did it happen P11 •How often action/interaction •Size of network •Kind of message •Sales Human media •To whom he recommended and what’s •Influencers the profile of the receivers •Well networked •Positive experience testimonial •Expected to be honest •Trusted source Slide 23

Slide 24: 对媒体的新衡量标准 A new way to evaluate media 1. 数码化 Digitalness Tvc 电视 2. 互动即对话 Interactiveness - dialogue Newspaper 报纸 • 潜在客户数据收集 Database enrichment potential Magazines 杂志 • 针对性强 Targeting Power Outdoor 户外 • 个性化潜质 Personalization potential 关 PR 公 • 品牌化 Branding power 览 Exhibition 展 会 • 销售力 Sales power • 独特性 Uniqueness 邮 Dm 直 • 口碑传播者的渗透力和形式 Penetration & usage by evangelists • 价格 Price Website 网站 Banner 通栏 Games 游戏 I-dm 电子直 邮 Bbs 论坛 Blogs 博客 POS 销售收银点 Mobile 手机 8 Unidentified prospects 认 未确 的潜在消费者 Identified prospects & clients 认现 确 的潜在和 有消费者 Slide 24

Slide 25: Mobile.The 2nd most important medium in people’s mind* 15% 4% 1% 80% Newspapers TV Mobile phone Internet i-merge | sinomonitor research Slide 25

Slide 26: Build an integrated campaign 8 newspaper ad tvc Fully integrated Coupon database driven & banner interactive marketing communication have a unique value to mobile build consumer knowledge at the individual level i-newsletter of identified Loyalty program prospects and clients ambassador incentives Slide 26

Slide 27: The growing field of digital + 500 mio + 200 mio 120 mio 40 mio Mobile users Internet users Web chatters Mobile chatters Slide 27

Slide 28: Adspend >< Influence BIGresearch ﾕ s (http://www.bigresearch.com) most recent Simultaneous Media Survey (SIMM 11, Dec. 07) Slide 28

Slide 29: Media Influence on Purchase • The marketers overrate the media influence of the TV commercials on consumers' purchasing decision, while they underrate the influence of the Internet and the friends of the consumers. Marketers’ If the media are on the diagonal, it opinion means the marketers understand the consumers well. (%) If the media are above the diagonal, they are overrated by the marketers. The ones below are underrated. * Values according to the marketer’s opinion * Internet 49, 43 Friends TV commercial Salespeople 1 4 , 2 1* 28, 22 * Newspapers Magazines Outdoor 4 , 8* Radio Consumers’ i-merge | sinomonitor research choice (%) Slide 29

Slide 30: It is easy to hate and it is difficult to love. This is how the whole scheme of things works. All good things are difficult to achieve; and bad things are very easy to get. Slide 30

Slide 31: Interactive in China still a very small market. • Total advertising spending 2007 [guesstimate] – all media $ 37 – 50 billion (TV,TV, TV!) – internet $ 0.6 – 1 billion [2007:182 million internet users/2008:244 million] – mobile $ 100 million [500 million mobile users - 90 million use mobile internet] • Predicted growth of mobile advertising » 2006: $65 mio » 2007: $100 mio » 2008: $142 mio » 2009: $193 mio » 2010: $243 mio Slide 31

Slide 32: We think too small, like the frog at the bottom of the well. He thinks the sky is only as big as the top of the well. If he surfaced, he would have an entirely different view. Slide 32

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Slide 34: Also in China (like in the US): online video & social networks. Slide 34

Slide 35: China is the social network country Slide 35

Slide 36: U.S. Lags in Social Media Creation • Consumers in the U.S. and Western Europe are more likely to be passive social-media participants -- sharing videos and reading blogs -- while those in emerging markets often create content through blogging, social networks and video and photo sharing sites. • "By and large, in the U.S. we're a country of voyeurs," said David Cohen, U.S. director of digital communications at Universal McCann, which conducted the study. "We love to watch and consume content created by others, but there's a fairly small group that are doing that creation -- unlike China, which is a country of creators." • + 60 percent of Internet users in the U.S. said they read blogs • 92 percent of South Koreans read them. • In China 88 percent read blogs. • Us – Eu just 26 percent had created a blog • +70 percent of Internet users blog in South Korea and China. • In China blogs tend to be about daily life rather than current affairs. UM surveyed 17,000 Internet users worldwide in March 2008 Slide 36

Slide 37: Our greatest glory is not in never falling, but in rising every time we fall. Slide 37

Slide 38: Awareness 了解 Cognitive 辨识 Emotion 情感 Traffic 引导 Past ad- Trial investments were 尝试 Repeat largely 重复 Loyalty pre-traffic based 忠诚 using mass media Advocacy 拥护 … Slide 38

Slide 39: Awareness 了解 Cognitive 辨识 Emotion 情感 Future ad investments should be traffic & post-traffic based, inviting people to act and Traffic interact. 引导 Trial 尝试 They will be more on POS too! Repeat 重复 Loyalty 忠诚 Advocacy 拥护 Slide 39

Slide 40: It doesn't matter if a cat is black or white, so long as it catches mice. Slide 40

Slide 41: • 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. Slide 41

Slide 42: The segment targeted by i-merge Slide 42

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Slide 44: China’s middle class strong 80,000,000 • According to Hou Yunchun, director of the Research Office of the State Council about 6.15% of the population were considered middle class, and the number was still rising. 根据相关部门的调查，中国人口的 6.15% 可以被认为是中产阶级， 而且这个数字还在上升中。 • National Bureau of Statistics (NBS) defines middle-income households as having an annual income between US$7,792 and US$65,790. 国家统计局定义的中产家庭年收入范围： US$7,792 － US$65,790. • McKinsey argues Chinese middle class incomes would be the equivalent of between US$13,500 and US$53,900. 麦肯锡主张中国中产阶级的年收入应该相当于 US$13,500 － US$53,900 • 19 June 2007 Slide 44

Slide 45: The superior man understands what is right; the inferior man understands what will sell. Slide 45

Slide 46: Thank you for listening Slide 46

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