China! China! --Read All About it--

When considering emerging markets China is one of the most dynamic for almost anything that can be sold. Its colossal population presents some of the greatest opportunities; however, due to the size it is sometimes very difficult to penetrate and gain exposure through traditional advertising via television and print. This is where the internet has been a real game changer for many firms.

Looking at the number of internet users and the major growth it almost seems to easy to use the internet in marketing new products and services. In 2000 china had roughly 22.5 million internet users. Fast-forward to 2010 and there is an astonishing increase to 420 million users! This means that over the last ten years there has been an increase of nineteen times to users in a relatively short period. This also represents a huge increase in the population penetration going from 1.7% in 2000 to 31.6% in 2010. With increases like this is it no wonder why companies like Google and Microsoft are scrambling to establish themselves in the Chinese search engine market.

With the 2010 numbers China has yet to see the peak of internet users it will likely experience. Being one of the major developing economies that most experts have dubbed BRIC (Brazil, Russia, India, China) also means that the population has a rising amount of prosperity and disposable income. The internet juggernaut is highly desirable in terms of exposure because it is a given that any sort of media will reach numerous individuals.

As China’s economy progresses these numbers will likely continue to rise, and this could be one of the markets that truly makes or breaks some of the technological giants from the U.S. Even with huge brand equity and leverage Google has had to succumb to the Chinese government in terms of regulation because they know how important this market is and will be in the future.

China’s internet usage creates some promising opportunities, and I am sure that in the coming years we may have Chinese based firms penetrating the American market in unprecedented ways!

http://www.internetworldstats.com/asia/cn.htm

Is it a SmartCard or CreditPhone???

Do you think it would be possible to go a week, or even a day without using your cell phone? It’s OK, neither do I. And now it may become even harder to put down those convenient little devices down. In an age where applications can do everything from providing weather updates to purchasing concert tickets it seems fitting that the next logical step would be to enable your phone to make payment transactions for pretty much everything. In a very surprising alliance, AT&T Mobility, T-Mobile, and Verizon Wireless are currently joining forces with a company called Isis in an attempt to do just that.

The Isis network has over 200 million customers and is currently teaming up with Barclaycard as well as the previously mentioned mobile giants to create a contactless payment system for smartphones. It would be set up very similarly to a system like Blink, which allows customers to simply wave the device over a transaction point and have the payment take place automatically. This isn’t the first attempt at contactless credit card payments via mobile phones, - In fact Bank of America and Citigroup both have similar programs in the works – but it is the first time such an alliance has been made.

This could yield some major opportunities to invest in for the coming years; however, we have yet to see such a system really take off. After all, there are some major security tradeoffs. What would happen if you left your phone unguarded and it was stolen? What if your cell phone battery died? What if you simply misplaced you phone? There are still many factors to consider, but the bottom line is that these advances are going to be reshaping the mobile application industry in a major way!

Maybe our phones will end up becoming too convenient!


http://www.delawareonline.com/article/20110123/BUSINESS/101230312/1003/Phones-get-smarter

Mixtapes and Piracy

In the advent of the digital age internet piracy has been a hot topic for many law makers and pretty much any company that has a fiduciary interest in almost any type of media. Piracy affects everything from music to software to pictures and has been a major issue in fluctuating profit and revenue streams. With all of these negatives it seems that there are absolutely no advantages to what would be considered “Piracy”; however, piracy has been a major contributor to the success of many established artists.

I know what you are thinking – How can this be true?? Well I’ll explain. In the hip-hop music industry it is a widely accepted practice for DJs to take material recorded by artists and put it on what is called a “mixtape.” A mixtape can contain a variety of different music, but in many cases they contain music that is unreleased and not technically available for retail sale. DJs then distribute these mixtapes in a variety of ways including unauthorized retail sales, passing them out after shows, or just offering them as free music in different retail locations. This creates a “buzz’ for artists and is a huge marketing tool that is not directly paid for by any record company or promotion firm. Though this differs from traditional internet piracy, bottom line is, this has been one way that piracy has helped record sales.

These situations coupled with more common internet piracy have lead to the creation of the Recording Industry Association of America (RIAA). The RIAA basically attempts to control internet piracy and look out for the financial needs of the recording industry. They have been responsible for numerous record store fines and closures due to the sale of mixtapes purchased from third parties. It seems almost counterintuitive for the RIAA to do this since mixtapes are such a valuable marketing tool.

Though it would be extremely difficult to put an exact figure on the amount of revenue that has been generated based on mixtape promotions, it can be said that this has been a FREE tool that has helped artists gain major recognition. One of the best examples being Drake! It seems somewhat wrong that agencies like the RIAA have been allowed to fine and sue record stores that were giving their artists free promotion.

http://www.riaa.com/index.php

http://www.ctv.ca/CTVNews/Entertainment/20101221/rap-mixtapes-101221/

Social Media: Hedging Against the Risks

Online social media has become a huge part of businesses and the professional world. With everything from Linkedin to MySpace and a litany of other sites there has been a new explosion in exploiting the benefits and ease of social media. Whether using a closed network within a company or a massive networking giant like Facebook there are a morass of ways to use these sources for building connections as well as advertising products and services. There are, however, some drawbacks to the use of social media.

Aside from the benefits of social media there are also some risks that have came to light in the explosion of its use. Using social media can put a company’s reputation at high risk because of outsider perception of employees that are openly associated with the company. How many times have you seen a Facebook page where someone openly displays their job and professional information, but still has radical posting on their wall? Some outsiders may look badly on the company for employing individuals that openly express such radical thought. Another major risk is creating a work environment that is too relaxed and creates the potential for employees to loose respect for their superiors. This risk may also be a big precursor to personal problems invading the workplace.

So how should companies address the risk associated with social media? There are a variety of ways to accomplish this, but most importantly businesses need to set forth clear guidelines explaining what is and is not acceptable. Lawrence Savell proposes fifteen tips to hedge against social media risk, which includes:

#1: Don't Be Fooled by Informality
#2: Know the Implications of Employee Posts
#3: Think Twice About Outside Submissions
#4 if You Make a Mistake. Fix It
#5: Never Make Promises You Can't Keep
#6: Monitor Your Online Presence
#7: Comply With Regulatory Requirements
#8: Follow Advertising Restrictions
#9: Appreciate Social Media's Global Reach
#10: Labeling It "Opinion|" Doesn't Make It So
#11: Qualify Your Language
#12: Use Appropriate Disclaimers
#13: Maintain Confidentiality
#14: Purchase Sufficient Liability Insurance
#15: Retain Counsel Before You Have a Problem

Whatever the method your company decides to use in its attempt to hedge against risk and oversee proper social media use, it’s a great idea to implement a plan before actively engaging in its use. Social media may be the next major change in business, and the earlier the risk is dealt with, the better it is for your organization.


Sources:
Cunningham, William H., and Jeff Hunt. "IBM's delicate social media balancing act." Risk Management 57.8 (2010): 30.Academic OneFile. Web. 24 Nov. 2010.

Savell, Lawrence. "15 tips to manage social media risks." Risk Management 57.8 (2010): 26+. Academic OneFile. Web. 24 Nov. 2010.

Call In The Experts

How many times have we seen companies use celebrity spokespeople to promote their product? I would almost guarantee that in the past week you have seen some product endorsed by a celebrity user. Whether it’s Katy Perry for Proactive, Jared for Subway, or Queen Ltifa for Covergirl there are hundreds of products in the market today that exploit celebrity endorsements in major advertising campaigns.

Many of these companies have seen returns based on their use of celebrities in their marketing schemes, but recent research suggests that a campaign’s effectiveness is based on more than simply associating random celebrities with products. Using complex neuromarkting research techniques some European scientists have offered a new aspect in the use of celebrity promotion – Expertise. At first glance, this idea may seem too anal in the whole marketing process, especially when considering that there has not only been research to confirm that celebrity endorsements help product and service sales, but also that these celebrities are not what we would consider to be “Experts” about the products they endorse. Afterall, it’s not like Katy Perry is in the research labs with Proactiv scientists saying “You know, maybe we need to adjust the chemical mixture in our product to get rid of more zits.”

But, think of products in terms of consumer use, “Jared was a very fat person. Jared ate a lot of Subway subs. Jared is now skinny. Jared must have some level of expertise in eating.” It makes sense, right? I guess it may be easier to evaluate this when thinking about an extreme example of no expertise. If Paris Hilton became the spokesperson for Encyclopedia Britanica, and said that she swore by them, I think that we may see yet another bankrupt company (not caused by the recession). Now it becomes clearer that companies may not only want to focus on celebrity looks and personal images when selecting a candidate, but also expertise.

Dr. Vasily Klucharev’s study revealed that many people remember celebrities with expertise about a product for a longer time than the non-experts. Dr. Klucharev said, ”Our results show that a single short exposure to an expert results in long-term modulation of memory and attitude for an object following the expert shortly after.” The study recorded responses from twenty-four female participants using celebrity pictures viewed next to different objects. Over 180 photos of products and celebrities were shown for a specific period of time, followed by a series of questions to evaluate the memory of each participant.

This may be a beneficial new aspect for companies to consider when looking into having a celebrity endorsement. In any instance, I think it would be best to use a celeb with at least some expertise, especially when considering my previously mentioned Paris Hilton example.


Source:
Klucharev et al., 2008 V. Klucharev, A. Smidts and G. Fernández, Brain mechanisms of persuasive communication: How “Expert Power” modulates memory and attitudes, Social Cognitive and Affective Neuroscience 3 (2008), pp. 353–366.