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 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 3

Projects in China

QuickTime™ and aTIFF (Uncompressed) decompressorare needed to see this picture.

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

Slide 4

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

Slide 5

原收入Initial Income realized

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

RecommendersInfluencers

品牌消极口碑传播

DetractorsNegative promoters

对品牌保持缄默

Silent majorityneutral

Slide 6

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

Slide 7

Recommendation value (future)

Monetary value (actual)

5-15% of consumers

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 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 …

Slide 10

The value of the 3rd moment of truth

Slide 11

Measure the Recommendation Power of your brand!

Slide 12

Recommendation behavior in China

2

43

38

12

5

No one 1-5 people6-10 people

11-20 people

More than 20 people

• 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

Slide 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

91

76

42

23

16

11

10

4

90

85

49

18

15

12

6

4

91

82

62

13

10

11

6

7

95

81

47

27

14

12

4

4

92

81

47

18

15

11

7

4

86

80

49

19

15

12

10

5

90

81

48

19

15

12

8

5

93

80

50

16

13

9

8

5

87

83

44

24

18

16

8

4 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

To learn a new brand or a new product

Total Sex Age Education(%)


Slide 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

91

41

41

35

30

29

15

14

11

For regular information

2%

98%

Yes No

Want to stay informed The ways to stay informed

Yes

(%)


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

1 Internet 49%

2 Friends 28%

3 TV 14%

4 Salespeople 4%

5 Newspaper 2%

Friends 34%

Internet 31%

TV 19%

Me 7%

Newspaper 5%

For the respondents’ family and friends


Slide 16

• The influencers are more likely to communicate about brands because of their using experience rather than the brand reputation.

31

26

Influence power

My peers have bought

something I recommended

My peers have given up

something I complained

about

84

36

77

44

(%)

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


Slide 17

Ways to communicate

87

62

50

31

18 17

• 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

(%)


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 19

对话结构Conversation Architecture

对话

社团关系

亲和力

信息 MESSAGE

经验EXPERIENCE

CONVERSATION

COMMUNITY

AFFINITY

RELATIONSHIPS

Slide 20

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

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 acontinuously growing interactive database withcustomers (friends, fans...) & prospects, that iscontinuously updated and enriched.

Digital & interactive media can help you build that database

8Unidentified prospects

Identified prospects & clients

database

Slide 22

8 philosophy8 字思维

Slide 23

The data potential of recommendationthrough social networking.• TVC• Newspaper• Magazine• Radio• Outdoor• Events• Web• Mobile

• …..

P1 P2P3P4P5P6

P7P8P9P10P11

Human media

•Influencers•Well networked•Positive experience testimonial•Expected to be honest•Trusted source

Consumer interaction database keeps track of # data concerning allthese 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’sthe profile of the receivers

Slide 24

对媒体的新衡量标准A new way to evaluate media

8

1. 数码化 Digitalness2. 互动即对话 Interactiveness - dialogue3. 潜在客户数据收集 Database enrichment potential 4. 针对性强 Targeting Power5. 个性化潜质 Personalization potential6. 品牌化 Branding power7. 销售力 Sales power8. 独特性 Uniqueness9. 口碑传播者的渗透力和形式 Penetration & usage by evangelists10. 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

Slide 25

Mobile.The 2nd most important medium in people’s mind*

80%

4%

1%

15%

Newspapers TV Mobile phone Internet


Slide 26

Build an integrated campaign

Fully integrated database driven & interactive marketing communication have a unique value to buildconsumer knowledge at the individual levelof identified prospects and clients 8

newspaper ad

Coupontvc

Loyalty program

mobile

banner

i-newsletter

ambassador incentives

Slide 27

The growing field of digital

+ 500 mioMobile users

+ 200 mioInternet users

120 mioWeb chatters

40 mioMobile chatters

Slide 28

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

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.

49, 43

28, 2214, 21

4, 8

Internet

Friends

TV commercial

Salespeople

Newspapers

Magazines

Outdoor

Radio

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


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 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 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 33

Slide 34

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

Slide 35

China is the social network country

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 37

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

Slide 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

Slide 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!

Slide 40

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

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 42

The segment targeted by i-merge

Slide 43

Slide 44

China’s middle class strong80,000,000

• 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 45

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

Slide 46

Thank you for listening

Slide 47

Bencham.April.Louvain

Business

stay informed

important

tv commercials

traffic based

purchasing

sinomonitor

social networks

regular information