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Brand winter & how to cope

Reading Time: 7 minutes

I started thinking about ‘brand winter’ when I read about TBWA Hong Kong and their ‘Brave Bear Pack’ offering. Campaign Asia describes as a new product focusing on growth hacking and cost efficient tools for surviving the financial winter brought on by Hong Kong’s anti-ELAB protests.

I thought financial winter was an interesting metaphor to use in Hong Kong. I get the analogue of the ‘bear market’. But the winter in Hong Kong is very dry (rather than humid), cool and exceptionally pleasant for the most part.

They probably feel that the ‘Brave Bear Pack’ opportunity has been amplified by the late 2019 novel Corona Virus outbreak.

According to TBWA the services they are bundling in this are:

  • Demand mapping – which seems to be database / CRM / social marketing data. Looking at market size and going after niches or pockets of the market not previously addressed? A B2B analogue would be ABM (account based planning)
  • Acquisition System Architecture – seems to be marketing automation based on the descriptor
  • Efficient Content Production – presumably to provide the content for the Acquisition System Architecture?
  • Affordable Big Format Film Production – crowdsourced film a la Mofilm, with what I presume is a TBWA mark-up. Again I suspect that the primary role of this is to provide content for the Acquisition System Architecture?
  • Chatbot marketing (on Facebook and WeChat respectively) which is so two years ago
  • Crisis management – TBWA seem to be white labelling Ketchum to do planning and execution- pretty standard stuff in the PR world. A quick look at LinkedIn indicates that Ketchum’s Hong Kong office has a very small, junior team to handle any crisis that might come up

I found it a depressing read. The tactics focus on the bare minimum to harvest sales from existing brand equity and and realised that we’re entering a brand winter. This is down to two factors acting as a catalyst: technology and economic decline.

What do I mean by a brand winter? It’s a time when marketers focus on performance marketing exclusively. The most obvious influence in terminology was the financial winter analogue used in media coverage. I guess it also resonated past discussions I’d had about the circular funding cycle that artificial intelligence has gone through. Decades like now of massive investment, followed by funding droughts or ‘AI winters’.

Technology factors for a brand winter

During the last couple of economic recessions, after the dot com bust and the 2008 bank crisis new performance marketing platforms have come to the fore.

The dot com bust heralded the rise of Google’s search advertising. The 2008 bank crisis saw Facebook and YouTube shake up online display advertising.

What all of them had in common is their ability to drive an action (like a sale), but weren’t so good in building distinctive memorable brands.

The second aspect, was that they could be very targeted using data. The idea is that the more targeted the message and the audience that its shown to; the more effective that it would be. Sounds like common sense doesn’t it? The actual results are counterintuitive. TakeMahabis the slipper brand that tried to build itself just on online media went into administration. Uber has tried to build a brand on price and online growth hacking still hasn’t made a profit.

But this pivot has resulted in the creative side of the advertising industry being gutted.

1707 - ad industry

This presents four problems for marketers:

  • Effective marketing campaigns have found by research to consist of roughly 70 percent brand building and 30 percent performance marketing across both B2B and B2C marketing. Brand building’s full impact can be measured over decades or longer. According to qualitative research by Kings College London on China; Swiss and Japanese watch brands were sought after by post cultural revolution consumers. Brand equity endured despite the worst excesses of Chairman Mao and his red guards.
  • Digital marketing isn’t as effective as one would believe. Digital marketing is only as good as its data and its measures have been defined largely by the media platforms themselves. TV advertising is several orders of magnitude cheaper in terms of reach. Ad fraud is rampant and major brands pushed for better standards led by P&G and Unilever.
  • The plethora of channels has meant that many brands have spread their creative like a thin smear of peanut butter across toast. Again research indicates that this approach is counter-productive. Yet brands have adopted big production capability in-house to feed social channels and online advertising formats. This work is often done at the expense of creativity and ideas
  • Over targeting is counter productive according to research done by the Ehrensberg Bass Institute and captured in Sharp’s How Brands Grow. Instead the authors recommend a ‘smart mass approach’

Marketers have given digital a greater amount of latitude than it deserves due to C-suite level concerns about digital disruption, stoked by their management consultants. When economic head-winds are met shorttermist thinking fit nicely with this performance marketing bias despite the issues outlined.

Economic factors for a brand winter

I won’t go into the background of the 2019 Hong Kong protests as that has been well-documented elsewhere. What I am interested for this post in is the economic impact.

P1088698
Studio Incendo: P1088698

The 2019-2020 Hong Kong protests seemed to impact a number of sectors:

  • The FT talked about the serious downturn in life insurance policy sales. Life insurance policies are used by mainland Chinese to build up assets outside of China in dollar-denominated investments
  • Data released last year indicated that for the month of October 2019, retail sales were down 24%
  • Chow Tai Fook Jewellery Group is looking to close 15 out of 91 stores in Hong Kong
  • Swiss watch sales in Hong Kong declined 4.6%
  • The leisure sector is down on earnings and Ocean Park is in serious financial trouble
  • Occupancy levels in Mandarin Oriental hotels went from 71% to 49%

Products and services that are aimed at the mainland Chinese market have taken the brunt of the damage.

Learning from the successes of the past

I wanted to draw lessons from two events.

  • The first was the Great Depression and how it profoundly affected FMCG brand marketing
  • The second event is the 1967 Hong Kong riots

The Great Depression

The Great Depression has slipped from popular consciousness as the silent generation that lived through it have left us. The Wall Street Crash, the New Deal and the Jarrow march are far away from our collective experience.

Dorothea Lange: Toward Los Angeles, California, 1937
Dorothea Lange: Toward Los Angeles, California

You may as well be talking about the Wild West or Victorian child labourers climbing up chimneys to clean them.

In reality the Great Depression lasted from 1929 until World War 2. Global GDP dropped by 15 percent. Many countries looked to austerity policies to see themselves through. It didn’t work out that well as it depressed demand. And it was a similar case for companies, they cut back on marketing and a demand drop followed.

By comparison Procter & Gamble (P&G) took a contrarian approach. P&G had been founded almost a century earlier. It hit its stride during the late 1850s as the American civil war raged. By 1911 its Crisco vegetable based shortening was launched. P&G were quick to realise the potential of the nescient radio stations springing up in the US and around the world.

They were instrumental in coming up with a new brand marketing format of sponsored programming based around a long running drama called soap operas. Consumers may have been struggling to make ends meet; but soap operas allowed them to develop increased brand affinity.

P&G also used the Great Depression to expand internationally by buying a UK-based soap maker. Because of this contra-cycle investment and spending in brand, P&G became one of the world’s largest companies with operations pretty much everywhere apart from Cuba and North Korea.

In a mirror of this strategy, P&G are now investing in creating content for streaming television services which have emerged over the past few years, in a similar manner to the way radio grew a century earlier.

The takeaway from P&G is that contra-cyclical investing for larger brands can pay dividends as the media landscape has less competition in terms of brand building communications. Secondly, adoption of technology makes sense IF the media can aid long term brand building activities.

1967 Hong Kong riots

In 1967, Hong Kong was a British colony on the edge of China. China had just entered the cultural revolution and ideological fervour was in full swing.

Hong Kong was a hodge podge of identities, and that’s not even including ethnic minorities (Nepalis, caucasian people of different nationalities and south Asians who came across the British Empire).

  • Native Hong Kongers
  • Middle class, business owners and entertainers who fled places Shanghai towards the end of the civil war
  • Former nationalist soldiers who settled in Hong Kong (like their compatriots who ended up in Taiwan and Burma)
  • Mainland Chinese who left China during the hardships and famine due to the Great Leap Forwards. They entered the territory illegally, often swimming across the Sham Chun river or even the Hau Hoi Wan estuary.
Hong Kong - Communists and Police
Roger W: Communists and Police, Hong Kong 1967.

Hong Kong was a tinder box. Work was plentiful but life was hard for the blue collar workers who struggled to make ends meet. What happened next depends on who you believe.

Trouble was brewing, there had been unrest across a number of sectors:

  • Shipping
  • Taxi drivers
  • Textiles
  • Building materials

The previous year there had been riots protesting a rise in ticket prices on the Star Ferry.

At the time Hong Kong was a centre of plastics production, textiles and light industry. Much of the light industry started off literally as cottage industries. Plastic flowers were assembled from parts at home and workers were paid by piece work. In the 1950s, the government got rid of these low rise low quality housing. They built high-rise public housing and multi-storey public factories that rented units to light industries.

The start of the riots was down to an industrial dispute at a plastic flower manufacturer based at the San Po Kong Factory Estate in Kowloon. The factory was owned by a local industrialist called Duncan Tong (唐鼎康). Tong had a number of manufacturing businesses including the Playart die cast car brand which competed with Hot Wheels and is still popular with collectors.

On May 6, picketing workers clashed with members of the management. It got sufficiently violent that the riot police were called. When the police arrived they were pelted with cans and glass bottles by picketing workers and their peers in other neighbouring factory units. The police arrested 21 demonstrators who were represented by the Hong Kong Federation of Trade Unions (HKFTU). The HKFTU is a Beijing-aligned group of trade unions.

Many more were injured in the violence. Local union officials went to the police stations to protest the arrests and ended up being arrested themselves.

Leftist protestors with strong sympathies towards Beijing protested in solidarity with the arrested workers the following day.

Over 100 protestors were arrested and a curfew was imposed by the authorities. This then sparked a low level insurgency. Over 1,100 bombs were planted, 51 people were killed, over 800 people were injured. Almost 5,000 people were arrested and over 1,900 of them were successfully prosecuted. It was only the intervention of the Chinese premier who finally put an end to the violence in December that year.

Business leaders like Li Ka-shing and Harilela invested in property when the 1967 riots depressed prices. They then went on to replace British taipans as the main drivers of Hong Kong commerce.

The takeaway is that chaos has consistently provided opportunities for businesses with enough capital to take advantage of them. But what’s needed more than money is the eye for opportunity.

What does the solution for a brand winter look like?

In the case of Hong Kong, if we look at FMCG brands, there has never been a better time to build a local brand. Advertising inventory in out of home spaces or on streaming media are going to be cheaper due to the lack of demand.

Both ‘yellow and blue’ orientated media offer opportunities if handled in an even handed way. Investing during the contra-cycle in brand offers businesses an opportunity to capture long term profits rather than short term sales.

More information

There didn’t seem to be anything on the TBWA Hong Kong website, but they had this post on their Facebook page.

TBWA HK offers service pack to help brands through the financial winter | Campaign Asia

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Five for Friday | 五日(星期五) | 금요일에 다섯 가지

Reading Time: 2 minutes

German think-tank MERICS China Forecast 2020 is interesting watching if you can spare the time. It’s long, but some of the smartest content that I’ve seen recently, from a European perspective. The Americans seem to have done a better job on Sinology; for instance the likes of Bill Bishop or Kuo and Goldstein at Sinica. MERICS China Forecast 2020 was a collaboration between Mercator Institute for China Studies (MERICS) and Handelsblatt. More China-focused content here.

Global Web Index have done an interesting analysis of Subway’s new product set aimed at tapping into the move towards plant-based diets. Subway – ‘Beyond Meatball Sub’ – GlobalWebIndex – was pitched at flexitarians rather than true vegans.

Meatless meatball marinara launch feels a bit ‘reality TV’ in tone.

Iris put together this work Every name’s a story for Starbucks UK. It won the Channel 4 Diversity Award 2019. It taps into the challenge of gender and identity. But also the primeval power of a name. I thought of Ursula Le Guin’s A Wizard of Earthsea which explored the power of names as it was seen by different cultures. Just five or ten years ago this ad would have brought out sufficient protests for the likes of Starbucks to shy away from. It illustrates the complexity of values in modern Britain: conservative nationalism and cosmopolitanism.

ARTE have got a great interview with Edward Snowden – Meeting Snowden.

Edward Snowden Wired Magazine
Iconic Wired cover featuring Edward Snowden.

Kraft is running a promotional contest for its new Kraft Macaroni & Cheese Big Bowls that targets parents of young children on Valentine’s Day. It’s interesting how Kraft are interpreting their product as what Scott Galloway calls a ‘time machine’. A product or service that allows people to get time from an activity where it otherwise would have been wasted. For instance, the telemedicine aspects of the Babylon Health app.

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中国 | china | 중국 创造力 | innovation | 독창성 初 | hygiene | 기본 商业 | business | 상업 小工具 | gadget | 가제트 思想 | ideas | 생각 消费者行为 | consumer behaviour | 소비자 행동 香港 | hong kong | 홍콩

ICYMI | 万一你错过了| 당신이 그것을 놓친 경우에 대비해서

Reading Time: 2 minutes

Eric ‘Vietnam’ Sadler interview – Folio Weekly – rare interview with Eric ‘Vietnam’ Sadler of the Bomb Squad production team

Public Enemy Papercraft
Public Enemy (without Eric ‘Vietnam’ Sadlerpaper craft figures via csalinas86

Venture capital investors should harpoon more whales | Financial Times – hard versus soft innovation – soft innovation is winning the money. More on innovation here.

Gen Z brand advisors – JWT Intelligence – because they are over millennials

和 Virgil 一同「压轴登场」的 Arc’Teryx,是怎样的户外品牌? – Chinese fashion show people trying to work out why Virgil Aboha wore Arc’Teryx goretex shell. Interesting that they don’t go to the obvious answer – technical outdoor wear is streetwear

Wristwatches (手表) | Mao Era in Objects – interesting read and gives a lot of food for thought on brand and perceived luxury products in the Chinese market

reut.rs | Trump executive order to clampdown on counterfeit and pirate goods sold at e-commerce – interesting as Amazon and eBay sure to suffer

FM音源伝説 | FM音源を愛するすべての人へ – cool game chip based synthesizers

Study: Men who own luxury cars are often jerkswhat types of people own these cars. Sure enough, he found that less cooperative, less kind, and less considerate men often drive high-status cars. “The same traits also explain why such people break traffic regulations more frequently than others,” says Lönnqvist. He found no connection between female self-centeredness and luxury cars. Before you start flashing the bird at passing luxury vehicles, know that not all classy car owners suck. In fact, some are quite dependable: The study also found that conscientious men and women—people who are organized, ambitious, respectable, and often high-performing—are also frequent owners of high-status cars, which Lönnqvist says likely reflects an appreciation for quality and an urge to present a self-image of classy reliability. – a bit more nuance to this than the title suggests

The rapid rise of ‘Buy now, pay later’ – BBC News – this isn’t new, its the Littlewoods catalogue model all over again wearing digital clothes

Bank of England drops productivity optimism and lowers expectations | Financial Times – not terribly surprising

ハタプロ – way too cute robot Google Home type device hybrid

Markera kraftigare mot Kinas försök att påverka pressfriheten | :UtgivarnaUtgivarna urges to mark more strongly against China‘s attempts to influence the freedom of the press. Swedish media pushes back against Chinese government and including the local ambassador and United Front cadre

Apple Hires Key Netflix Engineer in Bid to Boost Subscription Services – WSJRuslan Meshenberg, who helped build out Netflix’s platform and was involved in key initiatives to create a speedier, more consistent service for viewers, joined Apple’s internet-services organization this week

A new year marks a new phase of Hong Kong protests | Financial Timessome are calling on taxpayers to pay more. The aim of the so-called “$1 more” campaign is to cripple the tax authorities’ operations by forcing them to handle possibly millions of rebate payments, tying them up in bureaucracy and bringing the system to a grinding halt

‘Get Ready for Brexit’ was a £46m flop – so get ready for ‘Ready to Trade’ | MAA – this must be embarrassing for Engine Group

Apple TV+ ‘Immaterial’ to Services Revenue Amid One-Year Free Deal – Variety – loss leader

Apple FQ1 20 – Big battery. – Radio Free Mobile – back to basics with battery life being the key USP

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初 | hygiene | 기본 媒体与艺术 | culture | 미디어와 예술 小组会议 | event | 그룹 회의 市场营销 | marketing | 마케팅 无孔不入技术 | web of no web | 보급 기술 艺术与设计 | design | 예술과 디자인 豪华 | luxury | 사치

Five for Friday | 五日(星期五) | 금요일에 다섯 가지

Reading Time: 2 minutes

Adapt! did a great guerrilla wrap for Metro newspapers during the December general election. In their own words:

We designed an alternative newspaper cover wrap for the Metro. On it, we imagined a different approach to the December 2019 election – where climate change was the main focus. From front page to the sports section, we turned every tiny detail of the newspaper into a lighthearted commentary on climate change and the urgent need for a Green New Deal. Once printed the paper cover was applied to Metro newspapers and distributed across London by a large team of volunteers.

I liked this Adapt! project as it reminded me of people like Adbusters and the ethos behind much of the stuff on the Wooster Collective

Metro Guerilla wrap
Courtesy of Adapt!
Metro Guerilla wrap
Courtesy of Adapt
Metro Guerilla wrap
Courtesy of Adapt

Scotty Allen of Strange Parts went to a wholesale market in Shenzhen, China that sells everything you need for a high tech factory. This eco-system is why industrialisation isn’t going to return to the UK any time soon.

Watch out for the vibrating pans in after 8:25 that tilt components up the right way. Such a simple design solution, each one is custom made for the part that they need to work with. Seeing it in action is almost like black magic.

It’s interesting to look back through concept videos at what people thought the future might hold. This one was done in 2001 and captures the ennui of modern life. It was originally made for a Teletext conference… More on the web-of-no-web here.

Brilliant bit of work on Cheetos based on the product flaw / design feature of flavouring that gets all over your fingers. Ride on 90s nostalgia with MC Hammer and you have a Super Bowl memorable experience.

It is right up there with the Steven Siegel ad from 2004 by BBDO New York that had Mountain Dew as the hero product also featured other PepsiCo brands including Cheetos.

LinkedIn Live - the mind boggles
Screen shot from the Louis Vuitton LinkedIn live stream

LinkedIn – Louis Vuitton menswear fall/winter 2020 lifestream – its odd to see a YouTube style lifestream on LinkedIn. Engagement seems to be relatively low given Louis Vuitton’s million-plus followers. And the user experience is really out of context on a business platform.

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中国 | china | 중국 传播媒体 | media | 미디어 信息安全 |security | 정보 보안 初 | hygiene | 기본 商业 | business | 상업 媒体与艺术 | culture | 미디어와 예술 工艺学 | technology | 기술 无孔不入技术 | web of no web | 보급 기술 经济 | economics | 경제학 豪华 | luxury | 사치

ICYMI | 万一你错过了| 당신이 그것을 놓친 경우에 대비해서

Reading Time: 3 minutes

Interesting interpretation of the current approach to online harmonisation by the Chinese government. There is an opinion that China’s censorship mechanisms are somehow overwhelmed. I don’t think that this is the case at all. Instead I believe its part of their wider approach to online harmonisation – As Virus Spreads, Anger Floods Chinese Social Media – The New York Times – this isn’t a government apparatus operating from weakness but smart: just enough venting to stop it boiling over into angry action but not enough for a Velvet Revolution. The clue is in the Chinese government’s own name for this process online harmonisation – to give a harmonious Chinese society

Shenzhen Art Museum government-sponsored exhibition
SARS medical personnel captured in Chinese government-sponsored art capturing their effort and sacrifice made for glory of the motherland and the communist party

Philips plans to hive off unit as it sets focus on healthcare sector | Financial Times – this has been a long time coming, not terribly surprised. Ten years from now I wouldn’t be surprised if Philips is leaving the medical technology industry and licencing their brand to a Shenzhen based MRI machine manufacturer….

Daring Fireball: The iPad Awkwardly Turns 10 – I think its the UX as well as multitasking. Its a consumption machine with limited creative capabilities

Nightmares on wax: the environmental impact of the vinyl revival | Music | The Guardiandigital media is physical media, too. Although digital audio files seem virtual, they rely on infrastructures of data storage, processing and transmission that have potentially higher greenhouse gas emissions than the petrochemical plastics used in the production of more obviously physical formats such as LPs – to stream music is to burn coal, uranium and gas – vegan vintage wearing gen-z will look back on streaming not only as a cultural disaster, but a planetary one. Streaming is the music industry analogue to restaurant’s plastic straws and styrofoam cups

Swiss Watch Export Growth Slows to Weakest Pace in Three Years – Bloomberg – lower end of the market has dried up, which isn’t that surprising. The Apple Watch and G-Shock are aimed at squarely at quartz manufacturers like Tissot and fashion label licencees

Witcher’s Andrzej Sapkowski’s Honest Thoughts on Netflix Show – legendary responses, you can imagine the publicity department at the publishers suffering from severe anxiety

This will probably do a lot of long term damage to China’s aspirations in Europe building up a deep level of distrust – China spy suspect casts chill over EU’s vulnerabilities | Financial Times 

Probably some of the smartest European focused thinking on China at the moment

Country life: the young female farmer who is now a top influencer in China | Life and style | The Guardian“That despair of not being able to find oneself in the ‘Chinese dream’. I don’t think she’s propaganda because one of her major successes is that she’s making that failure highly aesthetic …

Measure to limit self-checkout gets nod from Oregon Supreme Court | gazettetimes.com – not available in EU due to GDPR regulations but you get the idea from the headline

I Sexually Identify as an Attack Helicopter by Isabel Fall : Clarkesworld Magazine – Science Fiction & Fantasy – interesting story that steps on the live wire issue of gender and identity channeled through William Gibson and Neal Stephenson. I am reminded a bit of the ‘Rat Things’ – cybernetic enhanced dogs that enjoy endless dreams during their downtime are are networked via the metaverse – in Stephenson’s Snow Crash

23andMe lays off 100 people, CEO Anne Wojcicki explains why | CNBC – surprised to see market turn… – I was surprised to see this late 20th century version of a faddish product from the Sharper Image catalogue do so well for so long given the privacy implications of it

Is Singapore’s ‘perfect’ economy coming apart? | Financial TimesMid-level jobs in manufacturing and multinational companies are disappearing and being replaced by technology and financial services roles, which are easier to fill with younger, more affordable migrants. Singaporeans like Aziz struggle to get back into the workforce. Only half of retrenched over-50s are re-employed full time within six months. Nearly three-quarters of people laid off in Singapore in the third quarter of last year, the most recently available data, were what the country classifies as professionals, managers, executives and technicians, or PMETs – I’ve been re-reading John Naisbitt’s Megatrends at the moment and its interesting how these classic knowledge worker roles have been disappearing – whereas just 30 years ago they were the future. It does make me a bit skeptical of the ‘every kid should learn how to code predictions’. The increasing consumer debt is another interesting aspect of this

The Offense-Defense Balance of Scientific Knowledge: Does Publishing AI Research Reduce Misuse? by Shevlane and Dafoe – interesting paper on identification and ethics surrounding machine learning applications