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PHD’s study into Chinese consumers and the motivations behind their digital behavior.

What is the Thread?
We’ve called this project ‘Thread’ because connectivity is at the heart of how people journey through the digital space. Chinese Netizens’ activities are increasingly inter-connected, rarely independent of other Netizens. These connections therefore form ‘threads’ along which information and influence flow.

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  1. 1. About PHD Formed in 1990, PHD ( is a media and communications agency with over 100 offices and 3,500 staff globally. PHD is a media business that has been built on a culture of thought leadership, creativity and innovation. At our core is a strong belief that great media ideas matter. In our hearts is a commitment to lead the industry with thought provoking opinion and pioneering thinking. PHD China launched in 2006 and currently has offices in Shanghai and Beijing with over 200 employees who are helping grow business for many domestic and international brands. We are always on the lookout for people whocan make a difference to join our team and of course, are happy to extend our client partnerships. If you would like to talk to us, please pick up the phone or drop us an email. PHD Asia Pacific was crowned Media Agency of the Year 2009 by Haymarket Media. P: +86 21 2412 3000
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  5. 5. The Engagement Curve The Engagement Curve structures the channel e Engagem Engagement C rve structure Enga ve structures e channe tructures c ch channel Fulfil con m Fulf Fulfil a consumer lfil co fil need and ensure d and en and ens planning process with a view to ultimately la ning process with view to ultimately ing proces n roce oc ith u t ma t l y the audience value ienc val enc value ncce c forming a strong, lasting a d meaningful g strong lasting and meaningful lasting ng n ean the the brand’sd relationshi relationship between brand an consumer. relationship between brand and consumer. The t n t n b ra consumer sumer com communic commun communications omm m s Engagement Curve guides the progression of e ogression of ssion cha channe the channels there channels there channels thereby channels thereby hannels hannels hann communications from straightforward story m develop developing the develop ng the developing the eveloping h evelo elopin eloping eloop oping telling, through intimate consumer connection g m Connect Influencers u lasting relationship asti g relationship ting relation hip elationsh elation lati n lation ationshi ti nship i and finally on to lifestyle integration. l t to the masses and s Personal accelerate the e growth of a l rger rowth f larger th h larger g Brand group f b nd group of brand p brand bran Relationships advocate adv advocates vocates t tes Being P t ownable content Put ownable conte t e in th ha s of the hands ands Useful active Influencers. active Influencers. c f c Arm the with the Arm th r them th th tools to a plify your ols amplify you story tory ify y Getting Social Tell consistent clear Tell a c nsistent, cle ent, and exciting brand nd excitin rand ex story cro sto across c mass mass-ma t and s-market d Gathering narrow cha na w channels annels Influnecers Engaging With Rich Content6 7
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  12. 12. As a Mum the internet takes on a whole new role in their life that might run in parallel with, or overtake, their relationship with digital as a White Collar. The nature and job of content, influencers, social media channels and useful communications changes dramatically. A compressed Engagement Curve To a degree the early elements of the curve regarding content, influencers and ‘Getting Social’, become compressed as the provision of simple, one way content becomes less important. The danger is that content can become a distraction from their lives and pressures rather than something to improve it. Content should increasingly play a role and ‘Be Useful’ in itself as their downtime is well catered for by more passive media like TV – Digital is largely addressing a more active need. When applying the concept of useful content to Mums we can broadly categorise it as either ‘functionally useful’ or ‘emotionally useful’. Emotionally useful content could celebrate Mum’s new life and play a role in lifting her self-esteem and in contributing to her happiness. Motherhood is often a combination of the mundane and the wonderful – the tiresome tasks like cooking and caring, coupled with the emotional rewards of seeing her family grow and succeed. Emotionally useful digital content can make the routine inspiring and empathise with the joys of motherhood. Functionally useful content is a clearer proposition – content that acts as a delivery system for advice direct from the brand, through key influential figures or through peers [in themselves key influencers]. The challenge is to merge the two to develop an attractive tool for Mums. This might be represented by a cooking show placing their ‘traditional’ parental role in a more aspirational, lifestyle-orientated context – for example taking a celebrity mum and show her cooking with kids, glamourising her daily role whilst communicating valuable advice. As with content, influencers and social media have to be far more intrinsically linked to ‘Being Useful’ – when looking to travel all the way through the Engagement Curve connection or expression just for the sake of it no longer applies. It needs a purpose beyond ‘winning’ or fame – communication needs to become ‘bonding’, consuming content to become ‘learning’. Suddenly she is faced with a whole new set of pressures and anxieties. Mum’s priorities realign to focus on their children - how they look after them and, importantly for us, what they buy for them. Media consumption is shifted from entertainment to knowledge gathering.22
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  14. 14. However… It is crucial at this point to include a caveat. The Engagement Curve is a guide to achieving the ambitious. A guide to reaching the ultimate goal for any brand – Personal Brand Relationships. However for Mums in particular there will be occasions when we will need to be pragmatic and focus more on adapting to their base behaviours rather than pursue our ambitions. For instance should we be engaging in particular with lower tier Mums, whose behaviours are even more limited [primarily to channels like Chat], we need to consider how far up the curve we need or can travel. Often, when targeting this audience, the budgets can be limited or the long-term investment not confirmed so digital will be relegated to an amplification or simple, efficient content delivery role. In this case the need for our channels of communications to ‘Be Useful’ might be dulled with the need to keep it simple prioritised. Whilst for the more ‘naturally social’ students and first-jobbers even small budgets should look to drive all the way through the curve as their chatter will serve to amplify the message, for Mums we need to pick our battles and only push the agenda when the conditions are right. So, central to tackling digital communications with Mums is recognising the contradiction between their relatively unsophisticated digital behaviours and their complex requirements from the channel. Everything we do needs to strike a delicate balance.26 27
  15. 15. NIKE+ Nike+ continues to be a huge achievement and an awesome demonstration of what communications projects can become if tracked fully through the Engagement Curve. It has blurred the boundaries of where brand and services meet, as a result creating an unbreakable bond with its consumers.28 29
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  18. 18. Mobile Internet: 3G will amplify existing behavior One distinctive consumer behavior of the Chinese market is that mobile phone owners use their devices for a broader range of activities, particularly for entertainment and communication needs. In addition to calling and sending short text messages, Chinese mobile-phone users send multimedia messages, play mobile music, games and SNS, download ringtones, take pictures and watch mobile videos more than do users in more developed countries. Nearly one-quarter of Chinese mobile phone owners use their devices to access content online, an extraordinarily accelerated progression of the medium (Boston Consulting Group 2010). Although the number of Chinese users grew to 233 million in 2009 (CNNIC 2009), mobile-internet use in China is still in development. The current developing mobile broadband market points to a growing opportunity for mobile applications, particularly as 3G develops. Both the software and bandwidth must catch up with consumer expectations, although many mobile apps companies are already on the move, and the Chinese government continues to pressure the telecoms providers to accelerate 3G network upgrading. An indication of the wide spread use of both the internet and 2G mobile devices as personal entertainment platform hints at the immense marketing opportunity. eMarketer estimates by 2014, 73% of mobile subscribers in China will access the Web on their mobile devices, representing 957 million mobile internet users. This means that as many people will be accessing the internet by mobile as will by computer. While mass usage of many of the more sophisticated digital behaviors are not yet habit, the good news is that the current network already supports and allows brands to do most of the interactions that you want to engage your audience with. For example product introductions, mapping apps, downloading/ uploading media, games, utility / entertainment apps, micro-blogging, voting, inviting friends, etc. are all do-able. Social networks go Mobile Social networking in China has already proven its appeal and worth in the PC world and the move to mobile is a natural evolution for the medium. Global mobile subscribers are on their way to five billion and the world’s biggest mobile operator, China Mobile, has close to half a billion customers in there China market alone. The traction of the medium is obvious as the millions of active users on Chinese social networks will migrate to mobile. According to Informa Telecoms & Media, the importance of mobile social networking will escalate exponentially over the next five years, creating a much larger industry. They state that there is sufficient diversity within the social networking arena, and predict that nearly 25% of total mobile subscribers worldwide will be actively participating in mobile social networking by 2013.34 35
  19. 19. The growth in mobile subscriber numbers will come from the mobilisation of existing PC-centric All smartphone operating systems are racing to court application developers and encouraging them to communities, providing further confirmation that the mobile model is robust, allowing users to access innovate on their platforms. The composition of smartphone owners will continue to evolve as new their communities when all they have with them is a mobile handset. It is natural that people who value technology in mobile devices are released and new features introduced. Brands need to monitor immediacy and contextual relevance in their communications would seek to have them when they are consumers’ behavioural changes, attitudes, preferences and increasing level of app usage. not in front of their PC. After all, in reality your social life doesn’t happen while you’re sitting at your desk, so the mobile allows users to report, comment and share on things that are happening now, without having to wait until they get back to their computers. App for everything Mobile social networking encompasses a diverse range of technologies and services, ranging from As advertisers explore new methods to create closer relationships with their consumers, and to invite simple chat applications to multimedia-rich environments, content generation and sharing communities. them into personal exchanges and immersive experiences, brands need to develop apps that are Different users are motivated by different needs and have different ways and means of experiencing relevant to their audience lives by being useful and valuable. There are now mobile apps that fill their mobile communities. Early adopters are using more powerful, community-centric handsets and utilitarian needs, serving up informative and educational tips and plenty that offer pure entertainment services for finding and communicating with others, quickly adapting their lifestyles to the benefits and everything in between. The right kinds of mobile apps linked to social media can move brands provided by the services. closer to their goals. According to mobile social network Gypsii, there’s a monumental change happening on three levels — Of the three major operators, China Mobile was the first to introduce an application store, Mobile Market, consumer, device and distribution. They state “Consumers have been looking to do more on mobile, in August 2009, and has around 11,500 apps available. It has recently started expanding the reach of particularly in emerging markets where they don’t have convenient access to the internet through a PC.” the store by placing access links on major Chinese portals. China Telecom formerly launched its online While Gypsii’s presence is global, its largest market is China, where the company operates in app store, eStore, in March of this year. Finally China Unicom just launched Unistore in July 2010 and partnership with China Unicom, targeting the carrier’s 148 million mobile subscribers. Social networking offers apps best used on smartphones. Unistore will not only support China Unicom users but also will is expected to drive the data business. One of the greatest influences on social networking is cultural be available to subscribers from China Mobile and China Telecom. conventions, especially where those conventions are in a state of change. Gypsii notes that Chinese users are “ferocious” social networkers, spending about ten times more time pursuing the activity than Advertisers are naturally angling for mind share on this most personal of devices through mobile apps Gypsii users in Europe and the US. As Chinese users are coming out of a closed society there is wave and there are solutions beyond developing your own branded app. By choosing to partner with or of curiosity as well as massive migration from rural to urban areas. This is stimulating a natural embrace sponsoring existing apps, advertisers can access and leverage an existing base of passionate users. In of mobile platforms as Chinese users actually want to make friends. this scenario, the advertiser is a sponsor of the mobile app content with display ads or boxes, links to promotions and other forms of content on the app. Smartphones In addition, brands need to explore how an app will tie into their overall digital and mobile marketing and Chinas three big carriers - China Unicom, China Mobile media strategy. They need to understand the connections and potential as well as planning social media and China Telecom - have all sought more diverse handset aspects apps. Brands need to come up with a strategy whereby an app fills a unique and compelling ranges to match the expansion of their 3G networks. In need. It should make a consumer’s life easier and more fun, or offer a useful benefit. late 2009, China Unicom began selling the iPhone, China Mobile has secured a deal for a BlackBerry model and Beyond developing mobile apps that are useful and entertaining, the need to create conversations China Telecom has said it is in talks to offer the Palm Pre. To boost their smartphone sales, the carriers are widening their pool of apps and other content, such as music services and mobile TV. Each are building their own app stores to expand their content offering as they begin to realise the differentiation possible with treating these retail outlets as opportunities in merchandising, community development and monetisation.36 37
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  24. 24. An Envolving Channel 1. Open API’s on SNS Though QQ’s remains closed Kaixin001 have recently opened their API, following RenRen and’s lead. All 3 willl benefit from the superior quality of the games available with their key rivals who are when working with more advertisers and foreign dvelopers. This will in turn create greater opportunities for advertiser collaboration and long term gaming strategies. 2. Increased sociality Players will begin to experience new ways of communicating within the SNS games. The methods, such as instant chat, will not be new to them but will be new to their social gaming experience. These new elements will deliver improved ‘stickiness’. 3. Brand Zones We expect to see a growth in gaming ‘worlds’ whereby brands work with developers and SNS sites to create linked social gaming zones akin to the child orientated Club Penguin [www.clubpenguin. com]. These offer consumers greater choice and depth still within the brand’s touch. Rules Of Engagement 1. Maximise communication within the game to build stickiness - both with other gamers and with the brand. 2. Build levels of complexity within a game, simple and complex play must be allowed to exist within the same close community of friends. 3. Facilitate virality by generating content that can be passed on. 4. Place reward at the heart of the game – virtual or real, ‘tangible’ or intangible. Reward could either be currency or just fame.46 47
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  27. 27. Key Opportunities for 2011 To build our presence in gaming. Gaming is nothing new but remains a fundamental driver of social media usage and thereby advertiser success. In 2011 we should be looking to establish a heavier gaming footprint and closer relationships with SNS sites allowing for rapid roll-out to work with fast moving consumer trends and brand needs. To wrap social media around TV content. To maximize the efficacy of our investment in TV content we need to have a robust social strategy surrounding it to allow consumers to discuss, communicate and even affect the storyline. Social media can drive the explosion of ‘water-cooler moments’ shows can only hope to achieve in the real world. To sync up social media with our mobile strategy. There are opportunities to be pioneers by aligning with key publishers [like RenRen] as they improve the transfer of user input from handset to profile. Location-based mobile technology offers Unilever brands an opportunity to be true pioneers in China. To develop a social networking service. Such is the immaturity of the niche SNS market that there is room to dominate a platform – to literally own or dominate a social network that fulfills a specific need relevant to our target. Not re-inventing the wheel, just finding a key consumer need that would benefit from a narrow, focused social network. A great example of ‘Being Useful’.52 53
  28. 28. I ‘Like’ connecting In Israel Coke hosts an event each year – The Coca Cola Village. Thousands of youngsters live in the village, with its pools and discos, for 72 hours at a time. This year Coke used Radio Frequency Identification [RFID] technology to automate the uploading of all the fun onto facebook in real-time. ‘Villagers’ were given RFID bracelets with chips that held details of their facebook profile. Around the event they were invited to use the bracelet to ‘Like’ certain activities by holding it to a sensor – their pleasure was uploaded in real time! Furthermore the RFID bracelets allowed photos of the villagers to be automatically tagged as they were uploaded. The boundaries between their social worlds – the real and the virtual – weren’t blurred… they were knocked down. Look for ‘The Coca-Cola Village’ on Youtube.54 55
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  32. 32. Give yourself a Gu Tianle grin What’s the worst that Mentos made great use of Image can happen? Recognition [or rather ‘Tooth Dr. Pepper took control of users Facebook status updates Recognition’] Technology to give you to bring to life their ‘What’s the worst that can happen’ a winning smile. campaign and take it social. Stare into your webcam, play around Downloading their app allowed you to choose how with the app on the website, and shamed you were willing be – just ‘Mildly Embarrassing’? give yourself the kind of white teeth Or go all the way with ‘Properly Embarrassing’. that otherwise cost a lot of money Dependent on your chosen level the app would automatically change your status each day with an Hello geek… excruciating new revelation there for all your friends to see The longer you can stand it, the more points you get. And points win prizes!! Who the hair’l am I? L’Oreal invented a new vocabulary (Hairoscope + Hairitage) and launched a fun and quirky new education campaign for their hair care/repair solutions in Singapore. Things We Love Answering a series of queries and uploading your pic would reveal your personal “hairscope” predicting your personality type which you can share/match with your friends. L’Oreal did a great job in putting ownable content in consumers hands and feeding the thread. Best Buy has always boasted the most knowledgeable salespeople in town but always hid them away in-store. They decided to create ‘twelpforce’ to unleash their geeks. With a simple tool on twitter it afforded bemused buyers 24/7 access to these fountains of knowledge. The twelpforce was always on hand to answer techy questions.. With the ultimate soft-sell Best Buy just provided a service suited to the digital age. Even technophobes who have never set foot in a store now feel they can trust Best Buy www.hairoscope.com62 63
  33. 33. Have my friends The African Medical Research Foundation tapped into people’s desire to do good [and be seen to do good] by asking people to give a voice to those in need. Facebook users could ‘donate’ their profile page and twitter accounts to impoverished individuals who otherwise would never get the chance to tell the world their story – it could be anyone from a Nairobi streetkid to a Nomadic tribe member A fantastic way for a charity brand to humanise suffering and drive donations by connecting those outside the Thread Connecting ideas with ingredients Food52, a website ‘Where Kitchens Keet’, is using mobile to provide access to their recipe database while you are at the grocery store. They have linked hundreds of their online community’s recipes to bar codes on the packs of potential ingredients. Take a photo of the bar code and list of potential Things We Love recipes pops straight up. You’ll never return from the store with a missing ingredient ever again!! A fantastic way to make your communications useful, reach into store and get your brand talked about.64 65
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  35. 35. Thank you to all from the PHD China Creative Channel Planning, Research and Digital teams who contributed to the PHD Thread project... Authors: Jason Grosz Paddy Crawshaw Ali Kazmi Amo Jiang Coolio Yang Researchers: Yvonne Shen Claire Jiang Special thanks... Designer: Neuneu Wu
  36. 36. PHD Thread was wri en and produced by PHD China.