Category: business | 商業 | 상업 | ビジネス

My interest in business or commercial activity first started when a work friend of my Mum visited our family. She brought a book on commerce which is what business studies would have been called decades earlier. I read the book and that piqued my interest.

At the end of your third year in secondary school you are allowed to pick optional classes that you will take exams in. this is supposed to be something that you’re free to chose.

I was interested in business studies (partly because my friend Joe was doing it). But the school decided that they wanted me to do physics and chemistry instead and they did the same for my advanced level exams because I had done well in the normal level ones. School had a lot to answer for, but fortunately I managed to get back on track with college.

Eventually I finally managed to do pass a foundational course at night school whilst working in industry. I used that to then help me go and study for a degree in marketing.

I work in advertising now. And had previously worked in petrochemicals, plastics and optical fibre manfacture. All of which revolve around business. That’s why you find a business section here on my blog.

Business tends to cover a wide range of sectors that catch my eye over time. Business usually covers sectors that I don’t write about that much, but that have an outside impact on wider economics. So real estate would have been on my radar during the 2008 recession.

  • VS250 online racism crisis

    VS250

    Virgin Atlantic flight VS250 had a tough finish to the week as Chinese social media users and their overseas counterparts united to hit the airline hard. The problem had percolated for the previous two weeks on Chinese social media as netizens fumed at the way cabin staff had allegedly treated a Chinese woman traveller.

    Chinese social media users are known for their direct co-ordinated action such as the ‘human flesh engine’ in a way that is similar to Anonymous or Reddit readers – but at a greater scale.

    Looking at the VS250 related social data we can see that there were two concerted pushes on social media. The first one happened on Twitter at 4am – 5am and then hours later it landed on Facebook. Interesting that the open nature of Twitter was the first place Chinese netizens went. Presumably because it was more visible and likely to get picked up. A second reason might be the superficial similarity with Weibo made it their first choice.

    The surge post volume would be enough to stress even the largest and most sophisticated customer services team.

    Key lessons for brands:

    1. A Chinese market problem has the potential to be an international one. The Virgin Atlantic team had a good two weeks to either shutdown the protest through a quick resolution or prepare for the Chinese netizen onslaught. They didn’t seem to do either
    2. The Great Firewall will not keep the protest isolated. In fact through benign neglect the Chinese government has encouraged patriots to jump the firewall on issues like Taiwan
    3. Expect a more co-ordinated approach if the protest jumps the firewall. It can be diagnosed by looking at realtime data
    4. Chinese netizens can effectively drive international media coverage, despite western scepticism or possible concerns of state collusion. (They often give the Chinese Communist Party too much credit, and not enough credit to the effective adhocracy Chinese netizens create)
    5. Sentiment analysis doesn’t seem to be a good trigger / escalation vector in this incident as the tweets mostly seemed to register as neutral based on the analysis tools that I used. On their own it wouldn’t indicate anything untoward – which negates some of the pretty command dashboards you see

    Here’s a similar analysis that I did on the Panama Papers.

    More information

    Trail of conversations on Sina Weibo – you need an account to log-in and see the content
    Virgin Atlantic targeted after racism accusations | Global Times
    Woman Was Called “Chinese Pig” on Flight by Passenger, Only to be Threatened by Crew to Leave the Plane in Mid-air | People’s Daily – probably the best write up of the incident by Chinese government’s paper of record
    Virgin Atlantic investigates abuse case as story goes viral | China Daily – London bureau breaks the western social media debacle for English language readers
    Chinese woman claims flight attendants ignored her after man called her ‘Chinese pig’ | asiaone – asiaone is a Singaporean news aggregator owned by SPH who own The Straits Times
    Richard Branson sends apologetic tweet after woman claims she was called a ‘f****** Chinese pig’ on Virgin flight by fellow white passenger… but cabin crew threatened to kick HER off the plane | Mail Online – the Mail Online piece is particularly importance as it validates the story for western audiences and other media such as The Metro
    Richard Branson apologises to woman called ‘Chinese pig’ on Virgin flight | Metro.co.uk

  • Dark social + more news

    How to Use Brand Jedi to Harness ‘Dark Social’ | DigitalNext – AdAge – so basically this is being attributed to influencer engagement and as the driver of ‘unattributable’ site traffic / conversions aka dark social (paywall)

    Apps to watch at SXSW 2016 — Medium – nothing really stood out to me from this list. Tribe and Roger reminded me of TalkBox, or the message function in iMessage and WeChat – generating more dark social opportunities. Chalk is a bit like State or Reddit

    WeWork Raises Funds at $16 Billion Valuation for Asia Expansion – Bloomberg Business – rather optimistic that western startups will rise the fund raising bust and expand into Asia…

    Google to sign up telcom operators to provide internet to remote parts of the country – timesofindia-economictimes – it will be interesting to see if their efforts will be more successful than Facebook has been with Indian mobile operators

    Really scary stuff that the media makes worse, charted | Quartz – great data on the pervasive (largely media generated) fear that seems to paralyse rational thought in developed societes

    Building Towards Value with Atlas | Atlas Solutions – interesting focus on native and video. Also powerful calling of ‘bullshit’ on many ad networks

    Official Google Webmaster Central Blog: Best practices for bloggers reviewing free products they receive from companies – no real surprises

    Rocky times for startups: Mutual funds devalue and VCs turn off money hose • The Register – quelle surprise

    Crap IT means stats crew don’t really know how UK economy’s doing • The Register – and people make accusations about Chinese economic data…

    The contagion effect of Shanghai Disney Resort – Campaign Asia – interesting how Disney is also an education brand in China. The resort also sets the benchmark for how brands tell their stories with passion

    Categorically Open – Brands Still Fail to Take Categories Seriously in China  – Branding in Asia Magazine – diacotmy of viewing China as a developing or developed market. It isn’t homogeneous, so you need tiered strategies based on level of development running east to west

    WeChat to add Office Version – LinkedIn watch out! – SocialBrandWatch – its more like Slack than LinkedIn

    The kingdom of ‘Wei’: WeChat and Weibo’s coexistence in China – Campaign Asia – (paywall) – wei means mini. WeChat’s Chinese name is Weixin…

    Announcing SQL Server on Linux – The Official Microsoft Blog – ’embrace, extend and extinguish’ or a new reality?

    Oracle to reveal details about Android – Business Insider – this is should be interesting

    Microsoft’s Windows 10 Store No Longer Accepting Bitcoin – Microsoft has silently removed support for Bitcoin in the Windows 10 Store, despite the fact that the company adopted the digital currency in late 2014 with much fanfare

    Go On… — Life Tips — Medium – good review of the Google Alpha Go game

    Chinese consumers look for high-end smartphones | Marketing Interactive – all three China’s home-grown brands have seen obvious market share increase , with Huawei jumping to 2.13% from 0.34%, OPPO rising to 2.48% from 1.37%, and vivo climbing to 1.64% from 1.21%

    Microsoft: We Store Disk Encryption Keys, But We’ve Never Given Them to Cops | Motherboard – expect DoJ to prompt further movement away from US services, Microsoft are shitting themselves

    Amazon Echo, home alone with NPR on, got confused and hijacked a thermostat – Quartz – apparently random TV programmes do it too

    NSA Data Will Soon Routinely Be Used for Domestic Policing That Has Nothing to Do With Terrorism – as John Gruber said ‘This is literally the pot of Spectre’ (the James Bond film)

    Bangladesh Central Bank Found $100 Million Missing After a Weekend Break – WSJ – apparently they were going after $1 billion (paywall)

    SMARTPHONES: Huawei Challenges Apple, Samsung in Payments | Young’s China Business – would you trust Huawei with your credit card? I can understand them succeeding in China, internationally it will be a long game

    trendwatching.com | PEER ARMIES – guestimation on how the sharing economy will adapt to deal with current criticism

    Here’s How Corporate Growth Is Killing The Economy – Douglas Rushkoff’s version of The State We’re In by Will Sutton

  • Platform utility

    Silicon Valley VC Andreessen Horowitz put togethers slides that cover platform utility and the role of network effects. The  presentation does a good job at providing a taxonomy on different products. It comes in handy when thinking about channel role / platform utility from a media planning perspective and also evaluating start-up ideas. They define platform in terms of development, but for advertisers we can think of it wider as we are likely to be making API calls in terms of data, targeting and ad placement. It is something that we are building demand or brand equity on.

    Key takeouts from the presentation

    • A network effect occurs when a product or service becomes more valuable to users as more people use it

    Network effect benefits

    • Create barriers to exit for existing users
    • Create barriers to entry for new companies
    • Protect from competitors eating away at margins
    • Creates a winner takes all style market

    Communications networks laws that provide indicators likely platform utility

    • Sarnoff’s law – the value of a network is proportional to the number of viewers
    • Metcalfe’s law – the value of a network is proportional to the square of number of connected users
    • Reed’s law – value of a group forming network is proportional to the number and ease with which groups form within it (subgroups grow faster than sheer number of P2P participants

    If it isn’t clear where they fall within these networks, it’s a warning flag for brands on whether to invest in the platform.

    User modes

    • Single ‘player’ mode – the product has immediate utility for a single user. Examples would be Flickr in the early days for photo storage, Foursquare in the early days to bookmark places you’d been to as a locative memory. Social bookmarking sites like Pinboard, or Delicious would have been in here had it not been retired
    • ‘Multiplayer’ mode – the product has no utility for a single user. This is particularly true for communications products. Examples would be Viber, Skype, Slack, Zoom etc.
    • Products can be both single player and multiplayer. So the community that built around Flickr for example.
    • Single player is more powerful when accompanied by an initial tactic to drive early network growth. Instagram photo filters was a way to post pictures on Twitter before there was enough critical mass. They help with adoption in the early days of a product when network effects aren’t sufficiently strong yet.
    • What’s the initial growth lever or tactic that will get it to scale?

    Case studies

    • Facebook found that connecting a new user to 10 friends within 14 days of sign-up was key to improving retention
    • Focus on daily usage (habit building) to help grow network. Focus on engagement rather than just overall number growth
    • Growth usage, even as user numbers grow is a sure sign of network effects at work
    • Facebook took a clustered approach: Harvard, then Stanford and eventually other universities in the US and abroad. Rather than focusing on growth. The immediate ‘single player’ utility they offered was an online school directory
    • WhatsApp had a different network type to Facebook. Each WhatsApp user had about 20 connections compared to approximately 980 friends on Facebook. Fewer connections also meant clustering around family, close friends of interest based WhatsApp groups with more engagement
    • AirBnB had two sides of their network. More hosts attract more guests and even become guests themselves. More guests means more business and money for hosts
    • Medium found that ‘single player mode’ can help get to ‘multiplayer mode’ through building sufficient critical mass.
  • PR, Not Communications – revisited

    In April 2011, Richard Edelman wrote a blog post in defence of public relations. The blog post PR, Not Communications was in response to a question from an employee in the London office

    …as PR continues to expand, encompassing digital, research, media planning and content creation, should we consider rebranding ourselves as communications firms?

    He then went on to give a spirited defence of Edelman being a PR firm with seven points, there is a link at the bottom of the page to Richard’s post, take the time out to go and read it.

    My own view on the matter was more akin to the London employee, partly because I worked in digital and saw changes there in terms of competitors, clients and the flux in brand positioning of the agency that I worked at. My response to Richard’s post is in the links below.

    By 2012, Edelman had been listed as number eight on the AdAge Agency A-list in the US. And by the end of March 2015, Edelman’s boilerplate changed on its own press releases, from:

    Edelman is the world’s largest public relations firm, with more than 5,000 employees in 65 cities, as well as affiliates in more than 35 cities. Edelman was named one of Advertising Age’s “A-List Agencies” in both 2010 and 2011, and an “Agency to Watch” in 2014; Adweek’s “2011 PR Agency of the Year;” PRWeek’s “2011 Large PR Agency of the Year;” and The Holmes Report’s “2013 Global Agency of the Year” and its 2012 “Digital Agency of the Year.” Edelman has been awarded seven Cannes Lions including the Grand Prix for PR in 2014. Edelman was named one of the “Best Places to Work” by Advertising Age in 2010 and 2012 and among Glassdoor’s “Best Places to Work” in 2011, 2013 and 2014. Edelman owns specialty firms Edelman Berland (research), Edelman Deportivo (creative), BioScience Communications (medical communications) and agency Edelman Significa (Brazil). Visit http://www.edelman.com for more information.

    To:

    Edelman is a leading global communications marketing firm, with more than 5,500 employees in 65 cities worldwide.  Edelman partners with many of the world’s largest and emerging businesses and organizations, helping them evolve, promote and protect their brands and reputations.

    Edelman was named one of Advertising Age’s “Agency to Watch” in 2014; one of Forbes’ “14 Most Influential Agencies of 2014”; and The Holmes Report’s “2013 Global Agency of the Year.” Edelman was awarded the Grand Prix Cannes Lion for PR in 2014 and was among Glassdoor’s “Best Places to Work” for the third time in 2014. Edelman owns specialty firms Edelman Berland (research) and United Entertainment Group (entertainment, sports, experiential), a joint venture with United Talent Agency. Visit http://www.edelman.com for more information.

    The change of descriptor from ‘public relations firm’ to ‘communications marketing firm’ appearing in the first sentence of the new boilerplate. The move seems to be in somewhat of a transition, for instance at the time of writing , Edelman’s UK website still has metadata when you use Google search that says:

    Edelman is the world’s largest public relations firm, with more than 5000 employees in 65 cities, as well as affiliates in more than 35 cities.

    So what does this all mean for public relations? Is PR dead, when the world’s largest PR firm no longer admits that’s what it does?

    The answer like the industry is more complex. PR skills are still in demand. But agencies that have provides these services have either cemented themselves into niches or expanded their service offerings beyond the traditional PR toolkit.

    PR has become more pervasive as it has gone incognito.

    More information
    PR, Not Communications – Edelman 6am blog (Richard Edelman’s personal blog)
    A response to: ‘PR, Not Communications’ | renaissance chambara
    Edelman Is No. 8 on the Ad Age Agency A-List
    Edelman Chicago Appoints David Greenbaum Managing Director, Digital | Edelman Press Releases
    Edelman Appoints Martin O’Reilly as New Global Chief Information & Technology Officer
    Is PR dead? | renaissance chambara

  • Online advertising targeting

    Ad blocking has become a thing; with a UK government minister likening it to a protection racket kneecapping online advertising targeting. This felt similar to  the the early 2000s and political action against file sharing.

    A cursory glance of publicly available data shows a few  things:

    • Correctly targeted advertising (in terms of content type, context and placement) would have a substantial receptive audience – if consumer opinions are to be believed
    • Current advertising technologies are negatively impacting consumer web experience by driving up page load times dramatically
    • Ad-blocking usage is steadily increasing, so governments have their work cut out regulating it out of existence

    This starts to paint a picture of something being broken in the way advertisers deploy targeting technologies and the way targeting technologies work.

    Government regulation is only likely to delay industry change. If the music industry is an analogue to follow ad blocking would look at legal means to slow things down and then technological means to resolve the issue.

    The bigger question is, is the problem resolvable? The ad industry is being squeezed on multiple fronts:

    • Ad blockers don’t like the detrimental user experience that they get from interception-based advertising and extremely long page load times
    • The economics of ad funded content doesn’t work for a lot of online publications, leading to a flight to subscription based business models. This would negate ad blocking; because there would be less ad inventory to block
    • Power in online advertising is coalescing in the hands of Amazon, Facebook and Google in the West. In China the equivalent companies would be Tencent, Baidu and Alibaba. Ad blocking is probably the least of many online advertising companies worries
    • In general, online advertising is used in an ineffective short-termist way. Marketing campaigns are becoming less efficient. Marketers are starting to pay attention to this, although the change may take a lot of time. Again this represents a bigger worry in the medium to long term for online advertisers than ad blocking

    More information

    IAB Ad Blocking FAQs 2015 (PDF download)
    IAB Believes Ad Blocking Is Wrong
    Adblocking is a ‘modern-day protection racket’, says culture secretary | The Guardian
    Advertising isn’t the problem with ad-blockers – telecoms edition
    Advertising isn’t the problem with ad-blockers