Is Human Media the Next Frontier? A Chinese Case Study

By now, we all know that we live in a world in which word-of-mouth rules.  The recommendation of a friend or family member outweighs anything a brand may have to say for itself.  

As a result, marketers from around the world are racing to measure the degree in which their customers, and the market at large, is likely to recommend them.  And, more importantly, what they should do to be more liked in the social media space that is called my kitchen.

For this, various measures are used, of which my favourite is the Net Promoter® Score.  It not only measures the propensity of customers to recommend, but also links these insights to economic behaviour, competitive position and opportunities for operational improvement.  But ever since I discovered it in 2006, I’ve had this feeling that there was even more mileage to be gotten out of that famous question “How likely are you to recommend this brand … ?”.

A few weeks ago, Futurelab’s Shanghai associate Jan Van den Bergh proved that there was.  Together with two partners he has set up Holaba, China’s first brand recommendation platform. 

In line with Net Promoter® thinking, Holaba surveys an ever increasing group of Chinese netizens on the likelihood in which they are willing to recommend 5,000 different brands (50,000 products), as well as their reasons for doing so.  Combining this NPS®-data, with additional customer experience, shopping and popularity measures, allows them to create an ongoing picture of every brand’s recommendation power.

But more importantly, by offering brands to connect out to individual consumers which declare themselves to be promoters (or in China recommenders) Jan’s team has effectively created the first human media network in China.

How this will effectively be used by brands, the future will tell.  But the following two slides are already a nice illustration of the information this can generate.  It’s all still experimental, yet the direction is quite promising (for the full Holaba presentation scroll to the bottom of this post):

• The first slide gives an overview of the recommendation scores achieved by the top 18 social networking services in China, using the Net Promoter® methodology  (n = 1500 to 7500 per brand)
• The second one cross-correlates the propensity to recommend a given social media brand (Tencent) with the loyalty to other brands.  This opens up a world of opportunities for cross-promotions, multi-brand community development, etc.

Recommendation scores of social networking sites in China

Have you heard of other human media initiatives that operate at this scale?  If so, I’d be quite interested to hear about them.

Social Networks & Recommendation in China

Full disclosure: As is apparent from the article, Jan Van den Bergh is a Futurelab associate, which is a cause for bias.  Still, even if a complete stranger would have walked in with the same proposition, I dare say I would have reacted the same.

Trademark notice:  Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.

Should Southern European Marketeers Move to China?

I had a very interesting debate last night with the CEO of the Greater China chapter of the American Management Association on the cultural differences between Chinese and Europeans and how this applies to executives who want to do business here.

In this he recounted from the experiences in one of the more successful training programmes they run in Shanghai and Hong Kong on "intercultural communication".  What was very striking to me was that none of the big issues he mentioned were "new" to me.

Not because I'm such a wise man of the world, yet more because the issues which business people - read mainly Anglo-Saxons - face in China are extremely similar to the ones they, and their nordic counterparts face when moving into Southern Europe, in which I define anything south of Brussels as Southern Europe).

"Yes" doesn't always mean "yes", if something is "normally" or "in principle" OK, it isn't necessarily so in practice and there is a bit more of a nuanced/balanced, even hesitant attitude to new initiatives. This offers in my opinion a great competitive edge - to which my dinner companion agreed - for marketeers from countries like Belgium, France, Italy, South Germany, ... who have been brought up with this working enviromnent as they will be able to much quicker to work with the local Chinese counterparts and thus achieve results.

So, if you're a marketer in this category and are worried about your business being outsourced from right under you, it may be wortwhile to just pack your bags and go East.  It is really happening over here.

Posted from Hong Kong.

Shanghai Wrap: Elevatorcasting

When you travel, you learn.  And as I'm visiting Shanghai for the first time, I'm learning a lot (even though I'm only here for a day).  One of the things I saw was a narrowcasting concept which I had never thought of to date and which I've dubbed elevatorcasting. 

In short, what our Chinese friends have done is come up with small screens which fit between or next to elevators and display short burst advertisements (5-10 seconds only) which fit in the time-span you're waiting for an elevator.  While still a recent development, you actually have them in many locations across town (on a 2 hour stroll I saw at least a dozen of them).

Typically the advertisements relate to stores and products which are available in the immediate viscinity yet I've also seen some very interesting adverts for mobile phones and cars (which works remarkably well on public screens without audio).

Let's start learning more from the Chinese.

PWC Announces Bright Future for Entertainment and Media Industry

Media and entertainment is already one of the biggest industries on the planet, and by the looks of it, it's getting even bigger. 7.3 percent per year to be exact, and that until 2009.  This is at least the take of Price Waterhouse Coopers (PWC) who just released their Global Entertainment & Media Outlook 2005-2009, in which the billion dollar growth figures fly around like the dot-com days were back again.

Biggest growers remain video games and the internet, while digital distribution & mobile music will boost the recorded music industry.  Geographically China is once again going for the number one spot, in which they're predicted to become Asia/Pacific's largest entertainment market by 2008.  Also, advertising is back on the upswing.  Over the coming 5 years annual growth figures of 5.9% will push advertising expenditures from $ 358 billion in 2004 to $ 477 billion in 2009, in which internet advertising at 15.9% a year is going to be the fastest growing category.  While I'm always a little amazed on how anyone can put together this type of forecasts, I would say that even if they're only half right (which being PWC they should be), happy times are coming for those in marketing & media.

Via: PR Newswire

For the full report Click Here

And the Winner is ... China

Last week AC Nielsen reported that Chinese shoppers visiting Europe spend a whopping $1,781 (€ 1413) per person per trip.  Interestingly, where their fellow-countrymen travelling to non-European destinations mainly bought cosmetics & designer clothes, Euro-visitors focused their spending on alcohol, perfume and tobacco.

Either way, the Chinese royally beat the record which was held by the Russians and Japanese, who according to Bain spend ca. € 1300 per trip. 

On a global scale, travelling Chinese are now also bigger spenders than the shopping afficionados from Japan.