Michelle Cheung2

“Snapchat, a rapidly growing messaging service, recently spurned an all-cash acquisition offer from Facebook for close to $3 billion or more”, reported in Wall Street Journal on Nov. 13, 2013.

Snapchat interesting messaging application in which users can take photos, record videos, add text and drawings, and send them to a controlled list of recipients for a determined amount of time. Not only that this app is becoming more popular among the smartphone users, it has become a hot pick for investors and potential acquirer, such as Facebook and Chinese e-commerce giant Tencent Holdings. Just as many people questioned why Facebook bought Instagram last year for $1 billion, there have been conversations everywhere discussing the rationale behind this offer from Facebook to Snapchat.

Given the current circumstances, I personally think the Facebook’s intention to acquire Snapchat is similar to that to acquire Instagram. It is obvious that the growth Facebook is stagnant and being challenged by the variety of social media alternatives that the netizens can choose from. Nowadays, not only that people are having more choices in choosing which social media they want to spend time in, they are also having more options in choosing which devices they would like to access these social media from. A study by the Pew Internet and American Life Project stated that 38 percent of the crucial young user base (age 18-29) said they expected to spend less time using Facebook this year in comparison to previous year. Looking at the daily photo upload volumes in top photo-sharing sites below, Snapshot is a clear winner even with a much smaller but growing user base. I suppose that Facebook is trying to obtain more insights in how photos and video are changing social networks from Instagram and Snapchat with a hope to translate these insights into valuable consumer knowledge for it to make a profit from brands and businesses in the physical world.

On November 11, Tencent’s (the mainland’s largest listed internet company) 51buy website offered the usual extensive sales on Single’s Day, one of China’s biggest online shopping festivals. This year, Tencent executed an integrated campaign between the 51buy website and Tencent’s WeChat mobile app, a popular instant messaging application in China (See picture below for growth of WeChat users) The target segment of this campaign was residents in big urban cities in China – Beijing, Shanghai, Shenzhen and Guangzhou. The result was of the roughly 600,000 51buy orders made on Singles Day, orders via WeChat exceeded 80,000 (~ 13.33%). That translates to over HK$637m of sales made in  a single day by this free instant messaging mobile application, which made Tencent a risk to Alibaba who is currently a leader in the e-commerce sector in China.

In comparison to other methods of shopping online, customers can purchase their preferred products faster on WeChat. It is because there is no online shopping cart in which the users need to add the items into before “checking out”, so it makes the whole purchasing process more efficient and straight forward in users’ perspective. Also, users don’t need to click the third-party payment links like what most e-commerce platforms have. Instead, users only need to register their bank cards with WeChat to complete the transactions.

I believe that simplifying the online shopping process is crucial in improving the total shopping experience of consumers when they shop via their mobile devices because ultimately, “Shopping habits in the mobile space are different from the PC space,” Song Yang, Tencent’s deputy general manager for e-commerce. The objective of improving user experience is what make Tencent successful and catch up with rival Alibaba.

Source: http://www.scmp.com/business/companies/article/1355250/wechat-helps-tencent-make-over-hk-637m-singles-day-sales

In my last blog, I discussed about the risks and benefits of leveraging social media for luxury brands to communicate with their target audience. In this blog, I would like to share an effective social video campaign made by Chanel to advertise its brand and perfume. When it comes to brand advertisements, Chanel never disappoint me and the video above is definitely my all time favourite!

Chanel has been producing series of short films which are made available online to promote its products and showcase the different aspects of brand personality. The video above is an example of how Chanel promotes for its product (Fragrance: Coco Mademoiselle). The setting of the video, storyline and choice of actress (Keira Knightley) was planned and designed carefully to match with the image of the brand and the product – charming, mystery, daring and rebelliousness.

The latest edition of its social video series takes consumers through the history of the founder’s life. The video below is the fifth chapter of the series. It takes a look at Coco Chanel’s life prior to founding her brand. The video is entirely animated using black and white graphics and sketches inlaid with Chanel’s linked “C” logo.

The intake I get from Chanel’s social video campaign is that a premium brand can still make use of the influence of social media to educate audience about the brand values in a lighthearted manner, which is easier for consumers to accept and remember than learning a brand from traditional commercials. Also, I think that if the luxury brand still wants to creates that exclusive image by creating a distance between it and its audience, the content of the story being displayed on social media is the key determinant.

Enjoy the videos!

There are controversy on whether or not social media are appropriate or effective channels for luxury and premium brands to articulate their brand equity and messages to target markets. Some brand managers of those luxury brands see social media as threat more than opportunities.

The reasons why some brand managers view incorporating social media into their marketing strategies as threats are the following:

1) The idea that luxury generates value by creating distance between a brand and its consumers. That distance is necessary to create the dream associated with a brand’s core value and is commonly created through the form of scarcity, exclusivity in retail, or even being in a remote location. Social media brings brands closer to the consumers and thus, defeat the mysterious image that the luxury brand tries to maintain.

2) The idea that luxury is, by definition, reserved to an elite; social media platforms embrace diversity and democracy.

For those who embrace the use of social media in luxury brand strategies would argue that many online conversations give insights of consumer preferences, aspirations and lifestyle, and these are intrinsically related to consumption of luxury and premium brands that help express oneself. Since luxury brands are more often than other brands associated with corruption and scandals that can damage them, engaging in social media may help mitigate the risks of letting criticisms or negative feedback spread in the online community without control.

There are definitely pros and cons for luxury brands to engage with consumers through social media. Therefore, I personally can’t give out an affirmative answer on whether or not social media bring positive influence to a luxury brand. I believe it also come down to how the strategy is implemented and monitored.

We have to admit that mobile marketing is the new and hottest trend in the market in the past few years. Consumers have changed, and marketers need to adapt their approach to successfully reach them. Mobile marketing has significant influence to products and services sales in countries where there is a broad penetration of affordable smartphones, such as China. According to figures from the China internet network information centre, the number of Chinese people who access the internet through mobile phones has reached 420 million, representing 74.5% of all internet users in the country. Recent figures show that online shopping accounts for the biggest proportion of China’s internet economy, growing to 52.7% in 2012 compared to 35.9% in 2010. Chinese consumers shop online through their mobile phones at home (53.3%), on their way to work or school (26.2%); and when taking public transportation or in queues (13.9% and 10.6% respectively).

The higher the percentage of people accessing Internet through mobile phones, the more shopping activities can be done through the Internet. I came across a blog which suggested 3 criteria in designing a mobile marketing strategy, and I think those are . The 3 criteria are Content, Context and Channels. Content translates to the importance of tailoring the brand and/or promotional messages to the what the mobile users need or desire. Essentially, this is individual marketing. Context refers to marketers’ need to create a consumer-centred marketing system that meets the demands of consumers in real time without geographic boundaries. It also includes how quickly the system can respond to the feedback from the users. What’s interesting to mention is the relationship between the marketers and users. In the mobile platform, it is likely to be transformed into a peer-to-peer relationship. In terms of channels, mobile itself is one channel that should be integrated to the traditional marketing channels. Although these 3 criteria may not be covering every aspect, I think they are quite comprehensive at the developmental stage of mobile marketing.

This video clip was created by Thinkmodo, a New York viral video marketing agency in which one of its viral video has reached 6 million views and over 20,000 likes. This clip tells a story of Dave, as known as the ‘Man in the Cube’. The cube refers to the famous sculpture “The Alamo” in the New York City. Dave described how he transformed the interior of the cube into his own apartment, his daily routines and most importantly, the reasons why he chose to live in a cube. He explained that his intention was to escape from the world of Wifi, phone, texts, and social media. In the end of the video, he decided to move out and join the fast-paced world after he found out about and got support from “Whil”, a meditation program that the video was created for in the first place.

I came across this video while I was scrolling down my Facebook news feed page. I had not realized that the story was a fiction until after I finished watching the video, and “Googled” what “Whil’ was all about. Up until now, the video has 207,599 views and is getting a lot of exposure n different blogs. This video seemed to go less “viral” than other videos that Thinkmodo had made in terms of growth of “likes”, “views” and “shares” in the online community. I believe it is because the content of the story is less of a “surprise”, and the usual fun and humorous elements found in other viral videos are missing in “Man in a Cube”. Nonetheless, I still rank this viral video a pretty successful one because it served the purpose of getting people to find out and talk about Whil, a new organization that sells nothing, but an idea.

Facebook has been leveraging its large user base and data bank for companies’ advertisements since a long time ago, and so has Twitter. Pinterest has recently announced that it will roll out “promoted pin” to further monetize their service. A few months after Pinterest’s announcement, Instagram made a decision to introduce ads into the feeds, and promised “to make any advertisements you see feel as natural to Instagram as the photos and videos many of you already enjoy from your favorite brands.” This new feature will first be introduced to the U.S. users. The company believes that the transition will be smooth because many brands are regular participants on the network already. Moreover, they will focus on delivering a small number of beautiful, high-quality photos and videos from a handful of brands that are already great members of the Instagram community.

The company has not revealed the details of such plan. However, I will be interested in knowing if it will make any plan to control the quantity of ads appearing in a set amount of time. If yes, then how they are going to coordinate with the advertisers regarding the media timeline. I would expect Instagram to be able to provide useful data to help advertisers dig out which communities within Instagram are more actively engage in the topics that relate to the businesses. Only then will Instagram provide value to businesses by matching ads to users’ preferences and tastes.

Source: http://o.canada.com/technology/instagram-to-start-showing-ads-but-not-in-canada-yet/

Although the ready-to-eat breakfast U.S. market as a whole has $10 billion in annual sales, of which General Mills has a 40% share, boxed cereals have seen flat sales and declining volumes over the past decade, according to a recent report by Rabobank on U.S. cereal trends. The main cause of this trend is that consumers have a lot more choices in breakfast nowadays. To improve sales and volumes of boxed cereals, General Mills has launched the “Hello, Cereal Lovers” campaign which promotes rival brands along with General Mills brands.

“We’re very open to sharing and curating news and discussions regardless of the brand, because what’s important is what cereal fans themselves want to talk about, the hot topics,” director of communications for the Hello, Cereal Lovers initiative says. This integrated campaign focuses on driving engagement and interaction with consumers through sharing of cereal-based recipes, ideas, news  and crafts activities sharing on its dedicated Web site and Facebook (see below), Twitter, Pinterest, Instagram and Tumblr presences.

During the National Cereal Lovers Week (which is part of the campaign, Oct. 14-20), Justin Warner who is a winning contestant on Food Network’s “Food Network Star” program and chef/co-owner of Brooklyn’s Do or Dine restaurant, will be creating cereal-inspired dishes and hosting Google Hangout session.

The idea behind this “brand-agnostic” campaign reminds me of the discussion we had in class regarding how companies try to engage in online conversations without direct marketing. General Mills are interested in refreshing the idea that cereals is a traditional breakfast, so they want to know what consumers are passionate about cereals. Even though the campaign benefits the whole cereal market, I think General Mills is still the biggest winner because it currently has the biggest share in the cereal market and it presents itself as the initiator of this campaign.

Source: http://www.brandchannel.com/home/post/2013/07/24/General-Mills-Cereal-Lovers-072413.aspx

The tech giant Google has recently come up with a new solution to help businesses amplify the power of social media influencers. After the policy takes place on Nov 11, the profiles, pictures and recommendations of ordinary people on products, services, and brands will show up in the company’s ads as endorsements. For instance, if I review video on Youtube, my name, photo and comment will show up in ads on any of the 2 million Web sites that are part of the company’s display advertising network. Google said its new advertising policy would apply only to the 390 million people who have signed up for Google Plus, the company’s social network. Companies and marketers welcome this new practice because they believe that customers value word-of -month endorsements on products and services from their friends and family members. However, there is, of course, a lot of concerns on privacy although users have an opt-out option, and an option to limit the reach of their advertising endorsements.

On the consumers’ perspective, Google said that the launch of “shared endorsements” will help them make better choices as they will be able to see the comments and opinions made by their friends and family members. Also, I think there are some people who are active on social media and enjoy seeing their own opinions become more influential.  It is also interesting to note that users under 18 are excluded from this feature. This term is required for legality purposes. However, knowing that social influences from peers are particularly valued among teenagers, this term is indeed limiting the power of social advertising.

Source: http://cmo.com/content/cmo-com/home/articles/2013/10/11/google_to_put_user_p.frame.html

Companies buy expensive TV spots to promote its products, services and brands. However, Macy just broke the tradition and start “selling” its mobile app on TV commercials. The mobile app features online shopping, store locator, gift registry creation, special offers, and the scanning function (bar code and QR code scanning) for detailed product descriptions and user reviews. To enhance the in-store shopping experience at Macy, its app and Herald Square store in New York City have a new location-specific technology that provides easy in-store navigation to help find shoppers’ favorite brands & departments faster within the store. Below is the screenshot of the app from iPhone.

It is very interesting to see how a company uses paid media to promote owned media. By converting broad TV audience into potential in-store and/or online customers who use the mobile app, it’s a lot easier for Macy to do market segmentation and micro-marketing. According to the VP-digital marketing at Macy, the TV commercial (See below for the commercial) is “intended to remind consumers of Macy’s omnichannel capabilities in advance of the holiday season.” I think this is a smart move because the growth of physical stores is limited due to the change in consumers’ shopping behaviour. Also, as oppose to some mobile apps which only help shoppers to shop online, the location specific technology of Macy’s app aims at improving the in-store shopping experience. As a shopper, I am encouraged to download the app and go to a physical store to try out the function, instead of getting the sense that shopping online is always more convenient. Currently, there is only one store in New York that has the technology to support such app function. Macy should keep an eye on how this function is adding value to the sales of that store, and decided whether or not it is worthwhile to implement this technology to the rest of its stores.

Source: http://adage.com/article/cmo-strategy/macy-s-media-muscle-promote-omnichannel-capabilities/244221/