Social Commerce in China Teaches Advertisers to STOP THINKING ABOUT THE #BRAND

Tuesday, October 4, 2011

HANGZHOU, CHINA - SEPTEMBER 11:  Alibaba Group...Image by Getty Images via @daylifeThe Re-wired group and I were talking on a call today about some of the changes taking place in the China social media space, and how they could herald changes to e-commerce, advertising and marketing here in the United States.  When it comes to social tech, and the social networking that happens on platforms like Sina weibo, Tencent's QQ IM service, and with companies like Alibaba's alipay service, China often appears to have a leg up. Those companies are led by aggressive first movers, who have a lot of government support.

I brought up the fact that it looked like Alibaba CEO Jack Ma's aggressive push to tie services into a social e-commerce bundle looked like a big play for changing the way consumers shop and how consumers are marketed to.  It seems a simple gesture, but Bob Moesta and Chris Spiek pointed out a few things, and I think they are worth bringing up today.

Bob said that the aggressive push to use social media technology was a big sign that China didn't have to spend millions (or maybe billions) on traditional forms of advertising.  If the social layer is well embedded, then advertising and marketing becomes a very granular enterprise.  He said it is about "building influence through credibility and bypassing thirty years of marketing and advertising and selling with underlying technology." What that means: if you can find the people that influence their friends the most to purchase goods, why do you have to come up with a million dollar advertising narrative? Just give them the product, make them feel they are part of a community, and let them make up the rest.

Chris added, cogently, that this technique obviously "lowered the advertising and selling costs. You can cut that in half becuause you are getting product to market through people, not through advertising, per se."

What Chinese social media companies and what I will now begin to call social e-commerce companies are doing is creating the next layer of seeing who is influencing what product purchase in what category. As Bob said on the call, "It's about measuring the direction and magnitude of specific topics. It's really about making connections, so you you know each other, you must influence each other. Your friend in one area may influence you in one way, but then again, your other friend might influence you in other areas."

It kind of turns the world of advertising demographics on its head. You can't say anymore, if the above is true, that a person aged xx to xx with two cars, living in xxx city will live a lifestyle closely resembling other males in that area. You now have to drill down into the relatinoship. So what job does advertising and marketing begin to do? It begins to be about researching your life history, not researching what you own and where you shop, what you like and what you don't like. It's about the emotional narrative that YOU create for your life.

If you want to be a successful advertising team, you need to have people on your team who can research people, who can listen to people, and who can help them tell THEIR stories, not the brand stories. It's not about the brand anymore. It really never was, but what made us think it was? Well, the structure of the media.

The online media and social web structure we have now, as it is currently being used, will unseat the most powerful of advertising and marketing companies, IF they keep doing what they have always been doing --- telling a story about the brand. Stop thinking about the brand.

"There is a calculus that has not been invented yet, but the guy in China will be best positioned to help and know this,"says Bob. But I think it's not even that complicated. Watch how China puts together the tools for listening, and then lets buyers, sellers, marketers and the whole community take care of itself.  I close with a quote from Ma, who recently told an annual Alibaba conference in China that he's out to do more than make his competitors Baidu and Tencent, or RenRen stay awake at night. He wants to disrupt the entire financial system.

Mr. Ma also said Alibaba Group wants to take on state-owned enterprises. He said Alipay, an affiliate providing online-payment services that was recently transferred out of Alibaba Group to a separate company controlled by Mr. Ma, already has made a contribution to Internet users by challenging banking services.
“If banks don’t change, we will change banks,” he said. Mr. Ma has been criticized for his decision to transfer Alipay’s ownership because he didn’t seek approval from Alibaba Group’s board of directors, on which Yahoo has a seat. But he has said the transfer was necessary because of restrictions by the People’s Bank of China on foreign control of online-payment companies seeking new licenses would have prevented Alipay from obtaining one, because of Yahoo’s involvement. 

image from Fool's Mountain: Blogging for China.
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Maybe Howard Schultz Should Run for President

Monday, October 3, 2011

Starbucks Chairman Howard Shultz talks to the ...Image via WikipediaStarbucks will accept donations starting November 1 in an effort to create a money pool for loans given to small businesses. The effort is meant to get more Americans working, says Starbucks CEO Howard Schultz. He tells BusinessWeek in a story published today:

“We’re going to raise millions of dollars,” Starbucks Chief Executive Officer Howard Schultz said today in a telephone interview, declining to give a specific number. “This is about Americans helping Americans,” he said. “We’re not going to wait for Washington.”
In August, Schultz, 58, asked fellow CEOs and business leaders to boycott donating to U.S. political campaigns to encourage leaders to solve the nation’s growing budget deficit. Last month, he sent a letter to President Barack Obama and Congress urging them to put partisanship aside to find a solution to unemployment.
Starbucks will open at least 200 new stores and remodel 1,700 locations in the U.S. this fiscal year, which will create “well over 2,000 jobs,” Schultz said. “Business leaders can step up and we can create a renewed level of confidence by investing in the economy and creating job opportunities.”
The coffee company opened 27 net new stores in the U.S. in the quarter ended July 3.

Is the small business loans drive meant to create more Starbucks chain stores?  Apparently, no. It looks like Starbucks is donating the first $5 million dollars and the campaign will be run a little like the Pepsi Refresh campaign. There will be a website, and people can choose the donations they wish to make. 

To me this seems like an avenue for further social media usage by Starbucks, though it's not clear they are going to go that route. I'd like to get the opinions of advertising and marketing people on this one. People criticized the Refresh campaign because, from an advertising and marketing perspective, the money was not tied to direct conversions of Pepsi products. 

But the millions spent on Refresh led to more brand loyalty, argue defenders of the proposition. Could the same happen for Starbucks? 

Jack Ma Wants to Buy Yahoo! What's the Marketing Plan, Now?

Saturday, October 1, 2011

Jack Ma Yun - Annual Meeting of the New Champi...Image by World Economic Forum via Flickr
How would you market your company if this was happening?

TechCrunch reports that at a conference in San Francisco, Jack Ma, CEO of China Yahoo! subsidiary Alibaba, revealed that he has a strong interest in buying Yahoo! and spinning off its core assets. Most likely this is to protect himself and to rescue an ailing company.

There is not much more to add to this story, other than to say that it now has legs, as they say in the news business.

About a week ago, a report at Hexun, a Chinese media site said that Ma was serious about at buying Yahoo!. The purchase would allow Ma more control over Alibaba and it would also enable him to take some of the core features of the Yahoo! e-commerce infrastructure and use it for his own venture, Alipay. The stories on the recent Alipay fiasco are many but in short, Ma took the liberty of using his interest in Alipay to spin that company off from Yahoo!. In fact, Yahoo! didn't know it was coming.

I think that there's a strong likelihood that social e-commerce is the next giant wave of building web companies in China. All the major social networks are doing something about it. Web companies in China are buying properties that they can tie onto the back of a social media camel, and they are whipping their networks into shape and building strong e-commerce capabilities.

So, you are Yahoo!. You have a very large Chinese suitor. What is your marketing and innovation plan for this content engine that was once the darling of the Internet world?

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Banjo App Could Disrupt Twitter as a #Socialbiz and #Custserv Tool

Image representing Twitter as depicted in Crun...Image via CrunchBasehere is a copy of an email I got from Jennifer Peck, marketing guru at social app Banjo about a week ago. At the time I was writing for ReadWriteWeb and considering different apps that would make good news story material about how mobile apps are one of the big forces behind changes in how consumers shop, consumers talk to each other, and how #custserv (Customer Service) teams operate. 

In this email, Peck showed me how following topics and trends on social monitoring platforms like Hootsuite, Twitter and Tweetdeck can only go so far. I was compelled by her evidence enough to publish it here, to promote a discussion of the Jobs to be Done with social apps in marketing.  

Peck writes: 

Banjo just presented at Ad Age in San Francisco and I learned something about the "official hashtag" of the conference.  People weren't using it.   The official was #aadigital and the hashtags being used were #aadigital, #digitalwest #adage #adagewest or more commonly NO HASH TAG AT ALL. 
So, when you are trying to follow the twitter feed at an event or if you are following from afar, it's likely you will be missing most of the conversation.  Enter Banjo. 
I simply went to the map view, typed in 1290 Avenue of the Americas, NY, and voila.  I was instantly seeing all the activity coming out of SMASH.

Here are some of the screen shots that Peck attached in the email.  They are numbered to give context, and they are listed in chronological order as you scroll down the screen.

Photo 1.  Clearly at SMASH but the # is rackspace and the next is no hash at all
Photo 2.  This shows our NEW group mapping feature coming out with our next release (submitted to the Apple store yesterday)
Photo 3.  Again no hash tags - photo included
Photo 4.  No hash and #smashsummit
Photo 5.  No hash and #smashsummit - photo included
Photo 6.  The first #smashNYC
Photo 7.  No hash - photos included of @davemcclure
Photo 8.  See the top - NEW FEATURE of follow on twitter and favorite button
Photo 9.  Now following on twitter - NEW FEATURE 

Peck says that Banjo will be releasing new features soon, which will include map grouping, and being able to follow someone on Twitter. 
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