ICMYI | 万一你错过了| 당신이 그것을 놓친 경우

Chinese woman offered refund after facial recognition allows colleague to unlock iPhone X | South China Morning Post – when you have a huge population like China even small odds become significant – I do have a nagging doubt about if the story is true though

Outlaw Appeal: The Yakuza in Film and Print | Nippon – nice analysis of the Yakuza in popular culture

Telling AI to not replicate itself is like telling teenagers to just not have sex | Quartz – runaway singularity?

No news, just snooze: Japan’s paper deliverers enjoy press holiday | World news | The Guardian – I love that Japan still values print

FT Opening Quote – Dixons Carphone profits fall 60% – UK consumer upgrade cycle stretched. More people going for SIM only deals and upgrades are pretty meh (paywall)

Family Greatly | Kraft Brand – YouTube – classic planner driven creative targeting important family moments. Textbook FMCG advertising

Five for Friday | 五日(星期五)

Things that made my day:

Ford’s video spot for the Mustang is emblematic of the craft in ad planning. Ford realised that a loud noise, that emblem of sporting automobiles can be beneficial or damaging in the wrong social context – like waking your neighbours up early on a Sunday morning. What was interesting is how this became a central part of their campaign.

Contrast this with the approach that Toyota took in marketing the Lexus LFA to Americans back in 2010

Back in the late 1980s through through the 1990s Alex Cox or Jonathan Ross would have screened a series of these films on BBC2 or Channel 4 late one night. Mubi tries to do this curation, but fails miserably – it feels like an intern cobbled together the posts by raiding the BFI book shop. Video intros are definitely needed, both Cox and Ross have genuine passion. There is a space for Netflix or Amazon Prime to pick this format up and run with it (but for the fact Amazon makes some godawful film picks).

Instead we get this documentary from Vice that just scratches the surface and hints at the gold beneath

Whilst we are talking about films, I can recommend Alex Cox‘s book 10,000 Ways To Die which is one of the best works I know on the Spaghetti Western genre. It is free to download from his old website.

Tim O’Reilly on his vision of the future

This week I have been listening to:

This new David Morales track

An amazing mix of funk influenced Thai music

ICMYI | 万一你错过了| 당신이 그것을 놓친 경우

China’s Guangzhou Tengshi secures further funding to expand automated convenience stores | South China Morning Post – interesting store concept that turns the retail space into a giant vending machine

Germany accuses China of using LinkedIn to recruit informants-Sino-US – not terribly surprising

brandchannel: Unboxing Boxed: 5 Questions With CMO Jackson Jeyanayagam  – good to see this write-up with fellow WE veteran Jackson

How brands secretly buy their way into Forbes, Fast Company, and HuffPost stories | The Outline – this looks far more corrosive for the PR industry than Bell Pottinger

CryptoCurrency Screener – Yahoo Finance – it gives you an idea how mainstream cryptocurrency speculation has become

Qualcomm’s Anti-Competitive Conduct Could Be Exacerbated By Mergers | Disruptive Competition Project – interesting analysis

Twitter Users Like Long Tweets More Than Short Ones | Buzzfeed – impressive if true

California fires: Navigation apps like Waze sent commuters into flames, drivers say | USA Today – this will damage Waze in California.

3D printed Wi-Fi – still getting my head around this (PDF) via our Matt

Bill Brewster Recalls His NYC Stint Living (and Record Collecting) in the ’90s – via our Jed

Cathay Pacific reuses uniforms to create sustainable red envelopes for Chinese New Year | The Drum – I really like this idea, although it might jar with job and pay cuts at Cathay Pacific

China marketing agency landscape changes

Chinese poster

The Xi-era of China has seen the end of the go-go years in economic growth which was one of the factors picked up on Arun Sudhaman’s analysis of the market for PR services.

Arun also noted that the fortune of domestic and multi-national firms diverged.

Here are some of my thoughts:

Multi-national PR agencies often led with corporate communications and public affairs expertise. This meant that their businesses were led by leaders who paid lip-service to digital at best. My experience trying to sell digital internally was one of the most painful processes that I have ever done. It was one of almost insurmountable cultural differences: not Irish-Chinese, but analogue-digital.

To be fair many corporate and public affairs specialists in London are still trying to get to grip with what digital means. They know it’s important, but they don’t have a clue how it all comes together.

That mean’t that they didn’t really get social media beyond being a publishing platform. Chinese KOL (key opinion leader) work whilst effective, is paid media. PR agencies generally don’t have the depth of tools and analytics to provide comprehensive planning and execution for KOL projects. It is hard to get management teams to invest adequately in tools and talent.

Premier Xi has changed the landscape for public affairs practitioners. The government is less flexible, it feels that it no longer needs to be. China is on the ascendence in the face of western existential crises and America in rapid retreat from the world stage. Hence, new laws that discriminate against foreign technology companies as part of its wider approach to cyber sovereignty.  Public affairs still has a place in terms of research to provide understanding, but their foreign multinationals won’t like what the results will likely tell them.

Digital has hit the industry hard. It moved at an accelerated pace compared to other industries. Unlike the west were television isn’t in decline but has stopped growing, Chinese TV isn’t undergoing the golden age that we are seeing in the west. The government has made it less entertaining – which has only helped the acceleration of digital marketing channels in China. Government control of television content has meant less reality shows or remakes of Korean drama stories and more content extolling Chinese Communist Party values. Worthy content, but not particularly engaging.

May online marketing

In China, the major digital platform companies try and go direct to clients for social media advertising cutting out the media buying agencies. This gives media and digital agencies extra incentive to go and grab the paid engagements of key opinion leaders. These are often performance-related deals with directly attributable online sales or online-to-offline voucher redemption. Digital and media agencies are better equipped to handle influencer relations than their public relations peers. It is less about influence and more about performance.

Multinational PR agencies also have problems with their established client base of international brands. Under Premier Xi we have seen a more confident China. This confidence is manifested in Chinese board rooms. The way strategy and goal-setting works in Chinese companies illuminates this difference:

  • Big board meeting where outrageous unrealistic targets are set by the Chairman
  • Planning department turns the ridiculous goals into plans
  • Management goes to arrange funding

The business then goes to staff up and do whatever is needed. They will build massive conglomerates – what is known as building the eco-system – something that is frowned up in the West as being bad for shareholder value

Chinese entrepreneurs care about market share more than profitability. And sometimes they fail spectacularly like LeEco.

A lot of it reads like bubble-era corporate Japan. While it seems insane to outsiders, corporate China is much more closely knitted into the government than the keiretsus ever were. Corporate China may go pop in the future, but it won’t happen at the moment.

By comparison, multinationals are worried about activist shareholders and meeting their quarterly numbers can’t be as aggressive in comparison to their Chinese peers. This type of aggressive pursuit of growth would also be an anathema to the likes of WPP, Omnicom, Publicis and IPG who suffer from a similar risk of activist shareholder shenanigans as their multinational clients.

Which is why Chinese brands have been blowing up across sectors. 91 percent of smartphones now sold in China are from domestic brands. Apple has somewhere around 7 per cent share. Foreign FMCG brands are being slaughtered, even Amazon has only a few percentage points of market share.

Quite simply, multinational PR firms have generally bet on the wrong horse. China is the one market were American scale and capital actually diminishes in impact over time as the Chinese domestic market picks up. Multinationals in strategic business areas were always going to lose over time.

Where Chinese brands have wanted to expand globally, they have taken on foreign PR agencies. Part of this process was knowledge transfer. If one looked at an organisation like Huawei, you can see how they have learned and built internal capability with Chinese characteristics in their corporate communications function over time. It would be a similar process in other companies.

Even foreign luxury brands have struggled to be as agile as their Chinese customers. Between the crackdown on corruption and the rapid development of experienced luxury consumption – the only constant in the luxury market has been change. It is only a matter of time before China has its own answer to Michael Kors or Christian Dior. Western luxury brand problems will affect the agencies that work with them with massive fluctuation in marketing budgets.

A second transfer of capability from foreign to domestic is the move of multinational agency talent into local agencies. You combine that Chinese entrepreneurship and foreign agencies look vulnerable. Clauses that have kept western agency staff in check from plundering clients and talent don’t hold up as well in China.

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Things that made my day this week

Things that made my day this week.

Rhythm of Love Wall – YouTube – I respect the craftsmanship but do find the concept a little creepy, this was for 7-Eleven in Taiwan.

Great interview with the founder and manager of Tokyo’s famous Robot Restaurant

LOUIS XIII Cognac presents « 100 Years » by Pharrell Williams (English) – YouTube – advertising does CSR

Sweating bullets: notes about the creation of PowerPoint by Robert Gaskins – (PDF)

Joanna Wiebe Old School Copywriting for New School Businesses