Privacy-centric advertising practices

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3 Pillars Of Privacy-Centric Marketing: Steps You Need To Take Now

Darren Yuen, CEO of ad agency Initiative Malaysia

PETALING JAYA: Since the beginning of this year, Google has limited third-party cookies for its Chrome web browser users, marking a first step towards eventually abandoning the files that have raised privacy concerns for some time.

The testing period of the deprecation of third-party cookies will continue till the third quarter of this year, by which time it will be ramped up to restrict all users.

The changes are causing a seismic shift in the way digital marketers operate across the brands they work with.

Darren Yuen, CEO of ad agency Initiative Malaysia, shared his views with StarBiz on how limiting third-party cookies would affect the way agencies and marketers work moving forward.

StarBiz: What are cookies and how have they been used in digital advertising?

Yuen: Cookies are small files which are used to target advertising by tracking web navigation and have recently been subject to greater regulation globally.

These text files gather data about users’ browsing activity, identify computers that are connected to a computer network and specifically are used to identify and track specific users.

First-party cookies collect information activities on a particular site to improve the user experience. These are website-specific and once you click off the site, first-party cookies stop tracking you.

Third-party cookies on the other hand, work by embedding a persistent file on individual computers, working across the Internet to collect information about overall browsing habits.

Unlike first-party cookies, third-party cookies are generated externally by digital advertising agencies.

When users visit a site, the cookies track the site activity and save data about the browsing session, such as the sites visited and how much time is spent on certain pages, etc.

This data is sent back to the third party who created the cookie and is used to build out individual and group audience profiles.

Why should cookies be restricted?

Privacy concerns around the world have been the main push behind the cookie’s demise.

Previously, users had no control over when companies tracked them with cookies, but key regulations such as the General Data Protection Regulation that mandates that websites must ask for consent before using cookies on users in the European Union and the European Economic Area have set a precedent worldwide, improving the quality of data collected.

How will the loss of third-party cookies impact the advertising industry and its implications for advertisers?

Historically, most advertisers have relied on third-party data to inform ad campaigns. The loss of these will signify a loss of detailed targeting capabilities and decreased capabilities to measure ad performance accurately.

While the death of the cookie will dramatically change the digital marketing landscape for good, new technologies are arising to replace third-party cookies or improve first-party cookies.

As such, there will now be an increased reliance on first-party data, contextual targeting (a technique where ads are placed based on the content of a particular web page) and third party alternatives to the cookie like The Trade Desk UID or Universal ID – a holistic targeting and measurement system that’s more privacy-conscious.

At this point, are advertisers in Malaysia prepared?

Some brands have begun investing in tech infrastructure to start collecting their own first party cookies and other data sources.

Brands are also starting to invest in alternative solutions like contextual targeting or implementing ways to map customer relationship management data directly to platforms for improved measurement.

However, there is a high cost of entry to improve these ad tech capabilities and advertisers are generally wary of newer capabilities.

Advertisers also have concerns around these changes.

For instance, there are uncertainties and a lack of understanding around new alternative solutions such as the increased use of UIDs, which is a privacy-focused, unencrypted identifier created from a user’s email address or phone number.

There are also concerns around the potential decrease in measuring campaign effectiveness and how brands can maintain personalised digital experiences without detailed interest and behaviour targeting.

What are some key steps to get advertisers prepared?

The most important thing is for advertisers to re-examine their existing digital marketing strategy to see ways in which reliance on third-party cookies can be eliminated.

For instance, advertisers need to allocate resources to collect and manage first-party data effectively.

On an immediate basis, it will be useful to also start testing alternative targeting approaches across current campaigns by partnering with ad tech firms to create inventive solutions based on the UIDs.

Initiative Malaysia has also developed a unique assessment approach for the brands we work with, through an Emerging Tech Assessment.

This helps assess a brand’s digital activity’s readiness to these changes by categorising it into high, medium and low-risk buckets.

From here, we help plot a roadmap over the coming months to mitigate any potential risk areas and look at technologies available that could supersede existing performance.

How will advertisers be impacted if they do not prepare themselves for this development?

It is imperative that brands make swift preparation for these changes as there will be serious repercussions in the coming year, with wastage of advertising budgets on less effective campaigns or possibly delivering ads that are irrelevant.Brands will also face difficulties in reaching and engaging with their high value target audiences and in the long run, lose competitiveness in the digital space. This shift towards more privacy-centric advertising practices is here to stay and brands need to hasten efforts to gain an edge over their competition.

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How to grow a small business?

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IT’S what everyone who’s ever wanted to start a business or already running one aspires to achieve – to grow big. But growing a small business is riddled with challenges.

The following, though not exhaustive, are some examples that will set you on the path to growing your still minuscule venture.

Technology

SMI Association of Malaysia president Teh Kee Sin acknowledges that technology adoption is often an issue for small companies.

“It’s always a challenge. They see technology adoption more as an expense rather than an investment. It’s something that they would rather avoid.

“But adopting technology into your business should not be seen as an immediate expense and rather, a long-term investment.”

Teh admits that one of the biggest nitpicks of small companies is the inability to secure financing to “move to the next level.”

“Many small firms complain that financial institutions demand a lot of unnecessary documents and information that is difficult to be fulfilled. So they get stuck and are not able to move forward.”

Teh says there needs to be more Government involvement so that support from financial institutions can be improved.

Branding

Branding Association of Malaysia (BAM) president Datuk Eric Chong says branding is extremely important for business organisations, regardless of the size of the organisation.

“Big and medium-sized businesses usually understand the importance of branding. They would not be where they are had they not understood and practised the art of branding along the way.

“Small businesses, however, usually struggle tremendously in this area. It is a chicken and egg situation for these small guys – should they make money and maximise profits first, or invest in their brands from day one?”

Chong adds that what a lot of small and medium-sized enterprise (SME) operators fail to understand is that branding isn’t just about spending money on advertising.

“While advertising is an essential part of branding, it takes much more than just splashing money around if one wishes to brand something properly. It is just like gardening – you need to sow the seeds and nurture the plants with consistency. A beautiful garden reflects the absolute commitment of the gardener; similarly, a good brand reflects the absolute commitment of the CEO and his team.

“It is about finding the right brand positioning, creating the right image, building a great brand culture, ensuring superb customer experience, communicate effectively with the market, etc. So is branding essential for SMEs? Yes, it lays the foundation and paves the way for a small entity to, someday, become a respectable player in the market.”

Talents

Leaderonomics chief executive officer Roshan Thiran notes that for many SMEs, leaders want growth but do not want to invest their time or energy to grow their people.

“This ultimately results in their company not growing either. Every company, even SMEs, are limited by the growth of their people. So, as long as your people are not learning and growing, don’t expect your organisation to grow exponentially either.

“As the business world changes, even small companies have become more attractive to young talents. Many start-ups can attract great talents in spite of their size or funds.”

Roshan says that many youths view working at start-ups more attractive than multinational companies.

“SMEs need to leverage this by their own personal inspirational leadership. People are attracted to work in an SME not because you pay well or have a big reputation.

“Instead, it is because of the leader. A great way to attract talent to your organisation is for the leaders and the leadership team to develop their own leadership skills. If you become an inspirational leader, the likelihood of you attracting talent rises significantly.”

Training

Peoplelogy group founder and chief executive officer Allen Lee says many small firms first complain that they have “no time” for training.

“Whenever they say they have no time, I always tell them to ‘make time lor.”

The next complaint, says Lee, is “what if I send them for training and they leave?”

“My response to them is always what if you don’t send them for training and they stay! If this is the case, how could these employees help small business to improve productivity and efficiency, cost savings and customer retention, for example? This also means that you will not have a chance to improve on your sales, cost efficiency, profitability and even your competitive edge.”

Lee believes most companies spend 60% to 70% of their money on people’s salary.

“And yet, they spend less than 1% of their total budget to develop the people. And most companies, in fact, spend more time and money on maintaining their buildings and equipment than they do on maintaining and developing people.

“If people get results, then it certainly makes good sense to invest in people. People are an asset to organisation anyway, regardless if it’s a big or small business.

Diversification

Established in 1974, PKT Logistics Group Sdn Bhd initially offered only customs brokerage services – but is now providing total logistics services.

PKT group chief executive and managing director Datuk Michael Tio believes that diversification was they key to how the company transformed itself into the total logistics provider it is today.

“As we started to diversify our services, our revenue grew. So the first step of growth was to continue to diversify services within the logistics industry by providing more services.

W started off as a custom agent, then subsequently expanded to freight forwarding, haulage, warehousing and so forth.”

Tio says the next step was to look for foreign partners to grow the business.“We found Japanese and Korean partners.

The Japanese provided us with a cushion during the currency crisis and the Korean partnership gave us entry into the automotive logistics sector.”

He adds that PKT started to observe how other multinational logistics companies expanded their revenue.

“We ended up competing with them in the fast moving consumer goods (FMCG) segment because 60% of the industry, or RM2bil, were controlled by them.

We had to overcome several challenges in order to compete with these companies, namely know-how, acquiring new technology, modern infrastructure and most importantly, moving up the value chain.”

  – Contributor: EUGENE MAHALINGAM  eugenicz@thestar.com.my

China’s First Lady Peng Liyuan leading by example

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China’s First Lady Peng Liyuan made a fashion statement during a recent visit to Russia and Africa. 

AS Xi Jinping continues his first official visit to African countries as the Chinese President, his wife Peng Liyuan is as much of a star attraction back in China.

The close attention on Peng is not so much due to her new role as China’s First Lady but rather the fashion statement she made during the trip.

Peng arrived in Moscow, Russia, on March 22 with her husband in a double-sided buttoned navy blue coat with a black handbag.

Her clothes matched perfectly with that of her husband’s.

She wore a jacket decorated with motifs of blue flowers and birds over a black dress and carried a black purse when attending an event at the MGIMO University in the Russian capital.

In Tanzania on Monday, she appeared in an all-white jacket and skirt.

The navy blue coat and black handbag she wore and carried in Russia started the “Liyuan-Style” mania.

Soon, word spread on the Internet that the coat and handbag were not from luxurious foreign brands but were made by Exception de Mixmind, a Chinese brand established in Guangzhou in 1996.

After confirmation of this by the Guangzhou City Administration of Quality and Technology Supervision on its microblog, many Chinese praised Peng for supporting local brands and for carrying the pride of China during her visit.

Some Netizens said Peng looked “elegant” and “nicely-matched” with her clothes, while many others started creating forum threads on what clothes the First Lady would wear next.

Beijing Institute of Fashion Technology art and design department head Xie Ping was quoted by Beijing News as saying that the coat was designed based on a classical Western army uniform.

Qingdao Municipal Textile and Fashion Association secretary-general Zheng Mingmei said that the coat and handbag that Peng used in Russia fitted her personality and character well.

“What the First Lady did by wearing a local brand has no doubt increased the reputation of China-made brands internationally and boosted the confidence of our fashion brands in Qingdao,” she told Qingdao Morning News.

According to reports in China, major search engines and online shopping websites have seen a significant increase in the number of search words such as “Liwai (Exception in Mandarin)” and “Wuyong (Useless which is the sister brand of Exception)”.

The Exception de Mixmind outlets in Chengdu and Qingdao have received more customers than before, with many asking about the navy blue coat and black handbag worn by the First Lady.

The staff at the outlets told customers that they did not sell models of the coat and handbag.

Despite that, many customers still walked away with handbags resembling that of Peng’s.

Prices of its spring collection cardigans and long cotton shirts ranged between 1,000 yuan and 2,000 yuan (RM490 and RM980) while new handbags were priced between 2,000 yuan (RM980) and 3,000 yuan (RM1,470).

Qingdao Morning News reported that Peng’s coat should belong to last year’s winter collection series and cost around a few thousand yuan while the handbag similar to that of Peng’s was estimated to have cost 5,000 yuan (RM2,450).

“Compared with other coats and handbags around the same range, design and craftsmanship, the coat and handbag used by her were not too pricey,” said a staff.

Even before the First Lady fashion mania, Exception de Mixmind had already been quite an established brand.

Chinese tennis star Li Na wore a stand-up collar white shirt with black motifs during her photo call after her triumph in the French Open in 2011, and that shirt was from Exception’s 2007 “Tea Energy” series.

At that time, Exception founder and chairman Mao Jihong quashed rumours that the company sponsored Li Na’s fashion wear, saying that she was never their brand ambassador but they were delighted to see her wearing their label.

Of course, this time, it’s a bit different.

With Peng’s stature as the First Lady and a celebrity (Peng is one of China’s top female sopranos who sings a repertoire of ethnic and patriotic songs), this gives the brand more recognition.

In its editorial, Beijing Morning Post said there were three reasons why Peng received so much attention from the people and media.

One was that she was using made-in-China goods, second the clothes and handbags were not from luxury brands and third being her poise in leading by example.

“Nowadays, luxury consumption has be­c­ome a trend to show off one’s wealth.

Peng’s handbag is in a way a wake-up call for many Chinese who pursue luxury goods.

“After the Chinese Communist Party’s national congress (last November), the government outlined eight guidelines on improving its working style.

“Peng showed an important detail which was advocating austerity and a frugal lifestyle,” it said.

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People as a product!

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In digital space, users are increasingly being shaped as commodities by various sites and services.

LAST week, social photo-sharing application Instagram caused an uproar when it announced changes to its terms and conditions.

The changes were related to its advertising policy, and were interpreted by many people as the company reserving the right to share user information and pictures with advertisers (or to be used in advertising) without permission.

Instagram has since reversed that policy and apologised for the “confusing” language, stating: “Legal documents are easy to misinterpret.” (You can read its response at http://bit.ly/U79Nld.)

This seems to have pacified some users, but many are still fuming, while others have opted to try different photo-sharing apps as an alternative.

There are two primary issues with this. One is a privacy issue, in that the company would even consider sharing user information and pictures with its parent company Facebook and other third-party organisations (including advertisers).

The other is copyright; in the same response, Instagram co-founder Kevin Systrom wrote: “Instagram users own their content and Instagram does not claim any ownership rights over your photos. Nothing about this has changed.”

Users had every right to be upset. These are serious issues with severe repercussions, and it is becoming more and more common that online sites and applications are usurping the rights and control of their users. Facebook’s constant changing of privacy settings is legendary. The deeper we embed ourselves within such social network sites, the more we seem to get walled in.

As the days wear on, we find it increasingly harder to escape – most of our connections are in our social network of choice, our memories are stored within our profiles, and we are relying on it to be our source of information.

In many cases, we have come to depend on it for almost all of our interactions – we no longer need to remember people’s birthdays, we can send messages to each other conveniently without the need to store addresses, and we can broadcast our lives to all our friends at the click of a mouse.

Whether or not the reliance on such technology is a good thing is a different debate, but the fact is that the services these sites provide – it doesn’t matter if we never needed them before – are extremely useful.

However, many users don’t realise that this is still a service. Such technology has become so embedded in our lives that many of us have taken it for granted.

The fact that it is also primarily operated on the Internet has contributed to this sense of entitlement. Why buy newspapers when you get the news online for free? How many of us still send text messages via SMS now that there is iMessage, Blackberry Messenger and WhatsApp? With Skype and Viber, who needs to make traditional phone calls?

In some cases, it is easy to see how the companies behind them are making money. Newspapers now provide news for free (some have paywalls) with the hope of driving more traffic to their sites, which are plastered with advertising.

Apple and RIM, the maker of the Blackberry, promote their messaging systems to encourage people to buy their devices. Skype has a premium service that users can pay for as well as cheaper computer-to-phone rates which helps supplement its income. In that sense, the products these companies offer are obvious.

Social network sites like Facebook, Instagram and Twitter also have a product: You and me.
What they essentially do is no different from the media outlets – they sell their user base to advertisers. Unlike the print and broadcast media, however, these sites tend to have more information on their users which can be sorted or mined to help advertisers reach their target market.

Each update we post on these sites contains more information about our lives and what interests us – whether it’s in the words we use, the places we check in from or the photos we upload. And they have a lot of information. Citing European policy law, a student from the University of Vienna made a request to Facebook to hand over all the information it had on him. And Facebook provided it – all 1,200 pages of it.

The point here isn’t about how scary it is that a company has so much information on each of us – this too is a different debate.

The concern is that as technology advances, we are increasingly being shaped to be a product, and this is an awareness we have to carry with us constantly. It is pertinent to note that this is not a new phenomenon – the whole basis of the advertising industry is based on consumers being the product.

This is why newspapers are able to subsidise publishing costs to sell their products at a relatively low price (or in some cases, offer it for free) and why we get to watch television for “free”. Or pay very little.

We need this awareness because it will help us make decisions about how we navigate our digital lives. It will also help us reclaim some of the control – and our rights.

Instagram may have reversed that new policy for now, but there’s no saying it won’t come back in another form. Facebook has gotten away for many years with changes that its users do not like because few people are willing to walk away from it.

This is not to suggest that what these companies are doing is right. But the adage that nothing is free rings true in this situation. There are alternatives but each comes with a price.

The alternatives to these sites – some of which are on open-source platforms – may not be as polished and lack the critical mass to be as effective as the big social sites. Then there are the commercial entities which charge you (Flickr, for example, is capitalising on a sudden exodus from Instagram to its platform, offering its paying customers an additional three months of service).

It is only by carrying this awareness with us always that we can truly make the right decision – whether to stick with these companies, or stick it to them.

ReWired By Niki Cheong

Niki has just completed his MA Digital Culture and Society at King’s College London. Connect with him at http://blog.nikicheong.com or on Twitter via @nikicheong. Suggest topics and issues on digital culture, or pose questions, via email or on Twitter using the #Star2reWired hashtag. 

Customer Service with a Snarl !

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Service with a snarl

But Then Again By Mary Schneider

Gone are the days when you can expect politeness and pleasant smiles from your friendly customer service troops.

WHAT’S happening to customer service these days? I feel as if I’m constantly battling with technical support staff and frontline personnel who are becoming more and more rude and inept at their jobs.

Take the other day, for example, when I woke up to find that my car battery was as dead as Paris Hilton’s singing career, forcing me to seek out my nearest car repair shop to get it charged.

As I entered the premises, I was met by a manageress who looked as if she had a lemon stuck to the roof of her mouth. Rather than welcoming my business, she was surly and brusque to the point of rudeness.

Four hours later, when I called to find out how the battery charging was progressing, the Dragon Lady told me, somewhat haughtily, that I had to be patient. Later still, when I called again for another update, she breathed fire down the line and gave me the impression that I was harassing her.

The following morning, a baby-faced mechanic showed up at my house with my super-charged battery, a few tools and a packet of cigarettes.

“Surely, re-installing my battery won’t take so long that you need to have a cigarette break,” I wanted to say, but didn’t.

As he fiddled with the battery, I glanced at the packet of cigarettes lying on my doorstep. The front of the packet had a picture of what looked like a premature baby with an oxygen mask strapped to its tiny face.

“Look what cigarettes can do to unborn babies!” I wanted to say to the young man working beneath my bonnet, but didn’t.

You’d think that someone so youthful and agile would be able to install that battery before you could finish saying: “Did you know that Paris Hilton once cut a record?” But this chap redefined the word “slow”.

I watched impatiently as he attempted to connect the cables to the battery terminals using a spanner that was too big to get the job done – for a full 10 minutes.

Then he turned to me and said: “Do you have a size 10 spanner? I forgot mine.”

Like who did he think I was? The Fix-it Queen? His question would be tantamount to a cardiologist asking his patient if she happened to have a bypass machine in her overnight bag, just before administering the anaesthetic for her heart transplant surgery.

Nonetheless, I did have such a spanner conveniently stashed in a drawer by the front door – where I’d left it after removing the battery the day before. I produced it with a flourish, expecting Babyface to be surprised. But he took it from me as if it were the most normal thing in the world.

After connecting the cables, he spent a gazillion years trying to clamp the battery into place. As I watched him, entire species of animals became extinct, thousands of babies were born (some of them looking like the picture on the cigarette box), continental plates grunted and groaned, and stock markets around the world plunged ever deeper into crisis.

When his slothfulness became unbearable to watch, I withdrew into the living room and began writing a list of things that I needed to do as soon as I was mobile again.

No sooner had I written the first item (get recommendations for a new service centre) when Babyface poked his head around the door and asked for my car key.

Now, my car has two keys. One for the alarm system, and the other for the ignition. How was I to know that he wouldn’t know his arse from his elbow and would attempt to start the car with the wrong key, causing the alarm to go into “let’s disturb the entire neighbourhood” mode.

At this stage I was so agitated, that I took the key from his nicotine stained hand and said, in a somewhat irritated tone: “What have you done?”

He responded by uttering the four words that are guaranteed to make me more agitated: “Now please calm down!”

Ten minutes later, as he was slipping the premature baby into his back pocket, he turned to me and said: “My boss sent me here because I am the only one who can speak English. I usually work with Japanese cars, which are very complicated. Malaysian cars like your Proton Waja are very simple, but I don’t know how to repair them.”

I didn’t know whether to laugh, cry or feel sorry for him.

But I do know where not to go if I have a flat battery in the future.

Check out Mary on Facebook at www.facebook.com/mary.schneider.writer. Reader response can be directed to star2@thestar.com.my.

New consumer mindsets

Books Review by CHOO LI-HSIAN

Author: John Gerzerma and Michael D’Antonio Publisher: Jossey-Bass

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Spend Shift: How the Post-Crisis Values Revolution is Changing the Way We Buy, Sell and Live

IN their book Spend Shift: How the Post-Crisis Values Revolution is Changing the Way We Buy, Sell and Live, John Gerzerma and Michael D’Antonio show how consumers are “moving from mindless to mindful consumption” in an attempt to cope with their post-crisis loss of purchasing power and trust in institutions. In doing so, consumers are becoming “increasingly powerful and unpredictable”.

How they consume products is based as much on their emotional state as the environment around them. The book cautions that for companies “prone to celebrating a leadership position and a competitive market advantage, commoditisation may lie just around the hairpin corner.”

Consumers are resetting their spending and their lives to the new post-crisis financial realities. Through more strategic spending, consumers are voting for values with their dollars and influencing corporate behaviour. Communities are moving from capitalism to social collectivism supported by common values, a shared spirit of entrepreneurship and new skills in areas such as social media.

In response to this, many companies and brands are also making a very intentional effort to prioritise principles over profits, offering greater authenticity and creativity. At Walmart, Microsoft, Zappos and other companies, the authors met with executives who are applying new technologies side-by-side with old-fashioned customer-first practices to make their companies more relevant, resilient and profitable.

Stewards and staff of companies that are doing well by doing good ultimately also feel better about their positive impact on the communities they serve and the planet they share with their customers.

To tell the story of Spend Shift, the authors travelled from coast to coast, visiting large cities and small towns across eight American states to examine the value shifts sweeping the nation. They sat across kitchen counters, talked to small business owners and interviewed people from over 50 start-ups and large corporations. Their resultant efforts help readers to realise the depth and dimensions of the economic crisis and its consequences for American society and the world at large.

Marrying these real-life stories with solid research from Young & Rubicam, they analyse the changing consumer psyche, document the five shifting values and consumer behaviours that are remaking America and the world; and explain what it means to businesses and leaders. In stark contrast to the usual tired narrative of America’s decline, the book offers an uplifting alternative account of innovation, inspiration and surprising opportunity.

The authors introduce us to people who are reinventing their lives and livelihoods in the wake of the “Great Recession” that has “rearranged priorities, awakened creativity and reconnected us to the people and things that really matter.” We meet Torya Blanchard, owner of “Good Girls Go to Paris”, a tiny crepe restaurant that serves low-cost but high-quality meals in Detroit, a city where shuttered shops now outnumber those that are occupied.

There is Paul Savage, CEO of Nextek Power Systems, which champions electrical equipment made from direct current (DC) systems, Thomas Edison’s original creation.

We encounter Leslie Halleck, the first in her Dallas locality to start raising chickens in her backyard, who created a business to train other locals to do the same. Leslie stands as a shining example of how households across America are moving to more self-reliant lifestyles by shifting from consumption to production.

Through Cuban immigrant and Dallas librarian, Mariam Rodriguez, we discover how public libraries have become training centres for those who need to brush-up on skills, conduct a job search, or get free instruction in English as a second language. Library use in America has in fact reached record levels during the recession as people seek out education and community cheer. Sixty-eight percent of Americans now have a library card, the highest percentage ever.

We learn how technology and social media forums are helping to make generational and geographical divides disappear. The book talks of how senior editor of Make magazine, a bible for do-it-yourselfers, Phil Torrone partnered with Limor Fried to create Adafruit Industries, which sells kits and parts for original open-source hardware electronic projects out of a small loft in lower Manhattan. Adafruit sponsors “MakerFaires”, an online social forum where Millennial-aged electronics enthusiasts are mentored by retired engineers from NASA and Boeing.

The authors also reveal how Rob Kalin and his partners in Brooklyn created Etsy, an online place where artisans around the world could display handmade work and sell these to global buyers.

New business models with innovative incentivisation ideas have also emerged from the ashes of the crash. Partners, Lynn Jurich and Ed Fenster, solved the basic problem in rooftop solar energy that roadblocks many aspiring adopters – upfront cost. Her San Francisco firm, SunRun, gives homeowners guaranteed fixed energy costs through fixed leases for 30 years (that can be transferred to subsequent house owners) along with free maintenance with little or no investment; setting a fixed cost for power. SunRun’s customer base has increased by over 400% in 2010.

We speak with Andrew Mason, founder of Groupon, the group discounting phenomena that mobilises the masses with daily deals on products, services and even meals. The discounts are unlocked and activated when a threshold number of people agree to pay for the coupon or “groupon”. We see city council recycling manager Jon Norton working with RecycleBank to initiate the use of trucks mounted with scales and bins with electronic identification tags; so that the paper, glass and metal left on the curb by homes can be weighed and the households rewarded with shopping discounts.

In Western Massachusetts, locals have even created their own currency called Berkshares (named after the Berkshire Mountains) to help native shops survive competition from national chains moving into small mountain towns. Thirteen bank branches and community businesses have agreed to exchange these dollars to keep cash within the community.

The shift has not only been harnessed by small start-ups but also by the behemoths of big business. A case study shows how Scott Monty, head of social media at Ford Motor Co has moved the company toward openness and transparency. His goal was to start conversations with anyone who cared to speak to Ford. The Fiesta Movement on Twitter required that Ford actually allowed people to talk about the car in a way that was “unedited, uncensored, unscripted.” This new culture, coupled with new products designed through close counsel with customers and Ford’s refusal of Government bailout money, has helped to engender new respect and interest for the brand.

As the world economy struggles to find its feet after the last economic earthquake and its aftershocks, people are clearly coping by moving away from the material towards the more fundamental and the ethical. The book is vital reading for any marketer seeking to recalibrate their campaigns after the recession.

It provides a useful blueprint on new consumer mindsets and movements in the 2010s. It shows how businesses can adapt to the new consumer spending reality (more inquisitive, less acquisitive); repositioning themselves to appeal to this new sense of value tied to traditional values.

Ten Reasons Chinese Companies Fail In The U.S.

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A couple of years ago, I did a post on my blog listing my 10 reasons why Chinese companies were failing in the United States.

In response to that post, Nina Ying Sun at the Plastics News Blog did her own post entitled “Why Chinese Companies Fail the US Market,” explaining, agreeing on and challenging the items on my list.

I then did a new post, entitled, “Why Chinese Companies Fail in the U.S., Part II,” responding to Ms. Sun.  Someone just tweeted on this post and when I followed the link and read it again, I realized nothing has changed.

Chinese companies are still failing in the United States at what I see as an alarming rate–and the reasons I see for that have not changed a bit.

Here is my list, with Ms. Sun’s comments and then my comments on Ms. Sun’s comments:

1. Chinese companies focus on a Chinese consumer, not an American one.

Ms. Sun’s comment: “Chinese companies would like to find out more about their target American consumers, but they mostly rely on personal-level approaches to collect business information, lacking a systematic and scientific market investigation conducted by professional Westerners that understand the market.”

My comment: Very interesting and, I think, accurate observation. Chinese clients have driven me nuts by asking my views on things that I know nothing about, and then completely ignoring my advice when I try to hook them up with real experts. The following are typical conversations:

Chinese client: How much should we pay for that U.S. trademark?

Me: I have absolutely no idea. I just do not know such business well enough to be able to help you at all on this. But, we have worked with a company that does nothing but value IP and I would be happy to give you their name.

Chinese client: But what is your best estimate?

—

Chinese client: Should we start out selling our product just on the West Coast or should we start out nationally?

Me: Good question. Difficult question. It seems to me the answer to this will hinge greatly on the costs involved and on your ability to set up distribution networks. My firm does not handle questions like this (and even if we did, I do not think it would make sense for you to pay law firm rates for this information) but I would be happy to refer you to top notch business consultants who do.

Chinese client: Should we start out in Los Angeles, Chicago or New York?

2. Chinese companies fail to realize that one reputation-damaging mistake in the United States could doom them forever here.

Ms. Sun’s comment: This one is dead-on. And how come they don’t realize this common sense? Because they get by in China and assume it’s the same in the States.

My comment. Exactly.

3. Chinese companies fail to realize it will take time for them to make an impact in the United States and they are unwilling to spend the time and money necessary to do so.

Ms. Sun’s comment: Chinese people take such pride of the fact that industrialization, urbanization and modernization have happened in China in a much shorter period time than in the West that they believe, if you try hard enough, everything can be done fast and well. Why don’t they invest enough money to lay the ground work for the new market? Well, they look at the exchange rate. The same exchange rate that makes the Chinese production cost in yuan seem so low magnifies the marketing cost in dollars in the States.

My comment: Okay. But see number two above. Haste oftentimes makes waste.

4. Chinese companies focus too much on the end result (making money), and by doing so, they sacrifice the professionalism that would allow them to achieve long- term success.

Ms. Sun’s comment: The Chinese would ideally like long -term success. But the drastic social, economic and political upheavals and changes in the past century have paralyzed Chinese people’s long-term thinking. Fill the pocket as full as possible before the next change hits, be it credit policy, industry standards or consumer interest.

My comment: Absolutely true. Why think long term if there may be no long term? This explains the reason for the problem, but it still needs to be resolved.

5. Chinese companies tell users what they want instead of listening to users.

Ms. Sun’s comment: This obnoxious mentality is a hangover of the old Soviet-Union-style “planned economy” (1949-1978). That period of time featured insufficient supply of necessities and one-sided propaganda. Although it’s hard to question about China running a market, capitalistic economy today, the country skipped some vital steps in the development of the Western countries.

My comment: Same as for number four above.

6. Chinese companies focus too much on making money in the short term, rather than on building the quality necessary to sustain themselves in the long term.

Ms. Sun’s comment: What pops up in my mind includes: vicious and endless price wars, a business environment that has deprived consumers their say, and lack of technology and craftsmanship.

My comment. I agree, but what pops into my mind is that companies must be broad-minded enough to recognize that what makes sense in one country may not make sense in another. Indeed, one might even say this of China’s regions and there are certainly plenty of Chinese companies that have managed to succeed in China as a whole by localizing their product or their marketing by region.

7. Chinese companies fail to understand how beauty and design might distinguish their product from that of their competitors.

Ms. Sun’s comment: Traditionally, domestic consumers simply can’t afford beauty and design. Price is the only distinguishing point. Plus, the companies don’t want to invest much on design, because it’s bound to be copied by competitors right away, thanks to the absence of intellectual property protection in China.

My comment: All true, but see my answers to Number four and number seven above.

8. Chinese companies rely too much on phone calls and face-to-face meetings instead of e-mail.

Ms. Sun’s Comment: This is probably part of the Asian culture, underscoring personal communication instead of machine-generated and less interactive e-mail. I don’t think it’s necessarily a disadvantage though. Japanese companies have done well in the U.S. market, despite their preference for in-person meetings and phone calls rather than e-mail.

My comment. When in Rome….. But, I agree this may not be a disadvantage, so long as the Chinese company has the time and the people for it.

9. Chinese companies fail to use “simple and elegant designs.”

Ms. Sun’s comment: Unfortunately, they are trapped in between complicated traditional styles and a blank page of modern Chinese inspiration. Again, they can’t justify investment on design, because it will be copied by competitors overnight.

My comment: See my comment to number seven above.

10. Chinese companies fail to realize their need to hire MBAs and those with local knowledge.

Ms. Sun’s Comment: Call them cheap or arrogant. They don’t trust MBAs or Western veterans unless foreseeable return is guaranteed. They also want everything under their control, not threats and risk brought by language barrier and different business values.

My comment: I don’t know what to call this but I know it is not wise.

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