The document discusses advertising and media in China. It notes that interactive advertising in China is still a small market compared to traditional media like TV, but is growing rapidly especially in mobile advertising. It also discusses the importance of social networks and word-of-mouth recommendations in China and how to measure their influence on purchasing decisions.

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

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”

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

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

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

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

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

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.

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

10. The value of the 3rd moment of truth

11. Measure the Recommendation Power of your brand!

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. Mean: 8 people (%) i-merge | sinomonitor research More than 20 people 11-20 people 6-10 people 1-5 people No one

13. 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. the Internet TV commercials Newspaper ads Outdoor poster Magazine ads Friends sales material/ salespeople Radio commercials To learn a new brand or a new product (%) i-merge | sinomonitor research Total Base=1200 Master and above Base=113 Bachelor /undergraduate Base= 757 Junior college and below Base=330 20-29 Base=520 30-39 Base=521 40-45 Base=159 Male Base=711 Female Base=489 Education Age Sex Total

14. 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. Consulting the Internet Watching TV Going to the shops Asking friends with experience Reading newspapers Reading magazines Phoning the manufacturer Watching Outdoor posters Listening to the radio For regular information Want to stay informed The ways to stay informed Yes (%) i-merge | sinomonitor research

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’ family and friends i-merge | sinomonitor research For the respondents 2% Newspaper 5 4% Salespeople 4 14% TV 3 28% Friends 2 49% Internet 1 5% Newspaper 7% Me 19% TV 31% Internet 34% Friends

16. 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 satisfying experience Recommend because of positive brand reputation Complain because of dissatisfying experience Complain because of negative brand reputation (%) Base=all consumer respondents Base=influencers Influence power i-merge | sinomonitor research My peers have given up something I complained about My peers have bought something I recommended

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. Face to face Use instant messages Phone them Send SMS Send an e-mail Blog about it (%) i-merge | sinomonitor research

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.

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

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

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 Identified prospects & clients database

22. 8 philosophy 8 字思维

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

24. 对媒体的新衡量标准 A new way to evaluate media 8 数码化 Digitalness 互动即对话 Interactiveness - dialogue 潜在客户数据收集 Database enrichment potential 针对性强 Targeting Power 个性化潜质 Personalization potential 品牌化 Branding power 销售力 Sales power 独特性 Uniqueness 口碑传播者的渗透力和形式 Penetration & usage by evangelists 价格 Price Tvc 电视 Newspaper 报纸 Magazines 杂志 Outdoor 户外 PR 公关 Exhibition 展览会 Dm 直邮 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 Unidentified prospects 未确认的潜在 消费者 Identified prospects & clients 确认的潜在和现有 消费者

25. Mobile.The 2nd most important medium in people’s mind* i-merge | sinomonitor research

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

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

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

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’ opinion Consumers’ choice If the media are on the diagonal, it 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 i-merge | sinomonitor research

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.

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

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.

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

35. China is the social network country

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. &quot;By and large, in the U.S. we're a country of voyeurs,&quot; said David Cohen, U.S. director of digital communications at Universal McCann, which conducted the study. &quot;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.&quot; + 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

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

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

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

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

41. Of course there aren't 1.3 billion consumers in China. There's a &quot;survival China&quot; and a &quot;consuming China&quot;. 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.

42. The segment targeted by i-merge

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

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

46. Thank you for listening