Interview with Xiaomi Commercial Marketing Chen Gaoming： The advertising marketing environment has changed. Where is the next new marketing highland？ ｜ Connection growth

Source: connected Insight

Editor/Zhou Xiongfei

Is it better for enterprises to do marketing and seek growth by placing brand advertisements or effect advertisements?

In the past decade, the answer to this question may be more inclined to effect advertising.

According to statistics from consulting firm Bain, from 2013 to 2022, the proportion of effect-oriented advertising in the overall advertising budget increased from 20% to 70%.

It’s not hard to understand,During the ten years from the prosperity of mobile Internet, traffic has become the best business carrier and the best advertising carrier.

Even looking back at several business wars in China’s Internet history-from search to social networking, to O2O, to payment, and then to content platforms, the wars among giants have always revolved around traffic portals. Today, advertising is still one of the most important business models of these giants.

In this process, brands are faced with more channels to reach users, more ways to reach them, and lower customer acquisition costs.

To some extent, this is one of the main reasons for the popularity of effect advertising in the past decade. Enterprises continue to enter the new platform, with the help of platform bonus period for effect advertising, get traffic and get short-term sales.

However, in the past two years, with the peak of mobile Internet traffic, the overall advertising marketing environment and logic are undergoing some changes.

Brands have found that blind large-scale play is no longer applicable.

The reason is that traffic growth is getting harder and harder, and the cost of getting customers is getting higher and higher. Even if they can achieve a more accurate "thousands of people" through the marketing tools provided by the platform, the effect may not be so ideal. There are only 2-4 Internet advertisements that consumers can remember on average, but the competition is already ubiquitous and increasingly fierce.

At the same time,After a long period of downturn, the value of brand advertising is being re-examined. The mainstream marketing trend in the future is "equivalent quality and efficiency".

According to the report of "2022 China Advertiser Marketing Trend Survey", over 60% of advertisers agree with the view that "the peak of effect advertising traffic and high cost will promote the return of brand value".

Even in the longer term, the importance of brand advertising continues to increase. Under the background of the disappearance of demographic dividend, competition is gradually shifting from the production side and the channel side to the user’s mind. At this level, the compound interest advantage of brand advertising is more obvious.

Behind this, those brand marketing media that were neglected to some extent in the past also need to be revalued urgently.

For example, relying on smart TV’s big-screen advertising OTT marketing.

Recently, during the GDMS Global Digital Marketing Summit in 2023, Wired Insight had an in-depth dialogue with Chen Gaoming, general manager of commercial marketing brand of Xiaomi Internet Business Department, and discussed the changes in the current overall marketing environment, the marketing concept and development of Xiaomi OTT, the link collaboration that OTT has created for customer brand marketing and the commercial value of OTT.

The following is the details of the dialogue. On the basis of retaining the original intention, the connection Insight has been slightly deleted and modified.

The marketing environment has changed,

How to measure the value of effect advertising and brand advertising?

Wired Insight: what is the difference between the overall marketing environment this year and the past?

Chen Gaoming:The whole industry can be divided into three parts: product, effect and sales, which are brand advertising, effect advertising and sales promotion. According to incomplete statistics, effect and sales account for 80%, and 800 billion of China’s 1 trillion marketing market is effect advertising.? ??

There are two reasons. First, the structure of advertisers is changing. In the past, all the leading enterprises in the industry paid attention to brand marketing, and they chose traditional brand advertising forms such as placing TV advertisements, publishing newspapers, or asking celebrities to endorse them.

With the development of the Internet era, customers need to consider more diversified marketing scenarios. Although brand marketing is still in the planning, the birth of new formats such as e-commerce has divided the cost of brand marketing to some extent.

The second is that some emerging white-label enterprises have not yet developed to the stage of brand marketing. With the rise of the e-commerce industry, many industries in China have changed from OEM to self-management. Some emerging companies that subdivide the track have opened up a new marketing structure based on online channels. The marketing method is KOL promotion combined with e-commerce promotion. Under this logic, enterprises will focus on effect advertising in the initial stage of development.

This also leads to the change of advertising structure and share in China, and the proportion of effect advertising and sales expenses is rising.

However, judging from the strategy of budget allocation of advertisers, quality, efficiency and sales are the three major paths of enterprise marketing. I think brand advertising will still be valued, and the degree of attention will pick up in the future. Similar products and sales channels tend to be homogeneous with development, and the real difference will return to brand building.

According to the data of China Top 100 Brands List in 2023, although it is inferior to the highest level in history two years ago, the total brand value still exceeds the trillion-dollar mark, reaching 1.01 trillion dollars, which is still 13% higher than that in 2019.

As the soul of an enterprise, a brand is recognized by different customers by conveying lifestyle and value.For example, the success of Coca-Cola and Pepsi-Cola lies in their different brand tonality, but in fact, the products are not differentiated.

This is also in line with the future development trend of enterprises in China. The development of products must be from product-driven to brand-driven, especially exported to the whole world. The output is not only products, but also values and culture.

Wired Insight: everyone is talking about the value of domestic products now. What is the significance of brand building for domestic brands?

Chen Gaoming:China factory is good at making products and channels. Product parameters and pricing can be quantified and measured, and R&D innovation can also be copied. At the same time, enterprises are willing to tryVarious channels.

When product strength and channels develop to a certain extent, enterprises compete for brand building or team organizational ability. After the necessary pain, they may realize the importance of brand and start organizational and cultural construction of the whole enterprise.

First open the external market, then do brand building, which is the basic logic of the second growth.

I think many domestic brands have gone through different stages at present. Many operators are still in the forefront of the market. The company is in the stage of rapid development and has not yet returned to brand building.

Enterprises need to go through great pains and find the attribution accurately if they want to have this kind of cognitive change. When there is still room for development in other fields, the marketing of enterprises may return to the comfort zone.

Brand marketing is a kind of belief, which cannot be quantified and is difficult to predict. It can only be believed that it may get better in the future, which is different from ROI investment.

Wired Insight: what is the value of brand advertising for the long-term development of enterprises?

Chen Gaoming:Enterprises have different understandings of brand marketing. Now there are different theoretical debates. Some people think that brand power is greater than product power, and some people think that it is the era of product power. Brand power greater than product power is IQ tax, and product power greater than brand power is more cost-effective and more in line with modern consumers.

Focusing on product strength or brand strength is actually two ways that are not contradictory. Brand promotion scenarios and value orientation, while products focus on showing differentiation, with the ultimate goal of increasing sales. In fact, the two methods can be combined.

Connected Insight: In 2024, what are the opportunities and challenges for Xiaomi’s commercial marketing?

Chen Gaoming:The first is transformation, which is divided into two levels.

The first level is that many foreign customers return to the main position of brand building. No longer invest more in short-term ROI and effect. The second change is that private enterprises will exert their strength and pay more attention to brand building.

OTT marketing, why has it become a new highland of marketing?

Wired Insight: What impact does the change in the overall marketing environment have on Xiaomi’s commercial marketing?

Chen Gaoming:I think no influence is false, but Xiaomi’s commercial marketing also has its own differentiated advantages. Many of our customers’ marketing strategies are shifting to the direction of effect and small and medium-sized, which is a process of adjustment according to different stages of their own enterprise development.

There are two main messages we need to convey to our customers. The first point is to pay attention to brand building, which is the guarantee for the long-term development of enterprises. Second, there are many ways to do brand marketing. In the choice of media, OTT family scene big-screen TV advertisements are valuable.

First of all, OTT adapts to a large number of users in family scenes. In the first half of 2023, the daily life scale of domestic OTT exceeded 164 million. By the end of 2023, the number of smart TV activated households was 326 million. Secondly, compared with the small-screen mobile phone that usually receives complicated information, the impact and exposure effect brought by the high-definition presentation of large-screen advertisements and the exclusive rate of single play are better, which is helpful to impress the audience and enhance brand awareness.

I think OTT is still an undervalued potential stock, although many customers are already putting it in. I understand it as one of the four important brand media forms besides outdoor, long video and elevator advertisement.

Connect insight: what is the difference between ott launch and previous TV advertisements?

Chen Gaoming:The difference is quite big. Traditional TV advertisements are broadcast at a fixed time and may be distributed on different channels. In the past, we watched what was broadcast on TV, but now Internet TV is what we want to watch.

We designed a creative advertisement for starting the TV, which was played at the time when the TV started, and it was a real zero-level entrance service. The scope of delivery can be determined by city, province or DMP. These are all applications of Internet technology of smart TV, which are essentially different from traditional TV.

In a sense, the cost performance of smart TV customers is higher and the input-output ratio is higher.

For example, the effect is more real, with a third party monitoring, and the data can be controlled online; Second, the network delivery effect is better. Traditional TV advertisements need to deliver many channels, and there is a problem that the reach of users may overlap. Smart TV benefits from the operation of the algorithm, which makes the authenticity and cost performance of customers’ input and output far exceed that of traditional TV.

Wired Insight: Other TV brands are also talking about OTT, but so far it has not reached popularity. What are the reasons?

Chen Gaoming:The educational achievements are far from being achieved. We see that the current situation of some customers is that they have not invested money in brand building, but have focused on ROI and effect advertising. But there are also some big companies that have realized this. Building a brand affects people’s minds and enhances users’ sense of identity. If people are looking for goods, they will not worry about buying channels.

Many big brands are still looking for goods. In fact, this cost is not cost-effective, because he invested so much, did not add new users, but only transferred the sales channel. For example, decision makers in some enterprises do not watch TV at ordinary times, but consumers are actually watching TV, which forms an information gap.In fact, the cost performance and return of advertising in OTT family scenes are much higher than other media, and it is also a low value.

The first thing we do to promote OTT is to explain to users that our form is innovative and cannot be evaluated by traditional TV OTV. After the cooperation is reached, we will also cooperate with the third party to verify the advertising effect in three time periods: before, during and after the investment.

In fact, it is not easy to adhere to OTT, because we are not only meeting the demand, but also creating the market, and at the same time creating and promoting the norms and standards of this industry.

Wired Insight: What is the real form innovation of the advertisement in Xiaomi OTT Ecology?

Chen Gaoming:The first aspect is visual impact.This is very important for advertising. We have always made breakthroughs in advertising creativity, and we have a professional marketing creative team. For example, the 3D creative starting materials we created are not only compatible with various media, but also can be directly reused in outdoor and other large-screen media. These high-quality and shocking content materials can also be directly provided to customers.

The second aspect is the exploration and innovation of OTT, mobile phone and TV interaction. For example, add AI interaction when giving live college broadcasts to customers; Put a QR code or clickable link after the TV advertisement is played, and jump directly to the brand page. In the AR multi-screen interactive project we made for Volvo, in just 6 days, the exposure of AR exceeded 350w, and the total exposure of OTT terminal also exceeded 500 million.

These innovations in the OTT industry are actually Xiaomi OTT’s first exploration and seeing the actual effect, which is also the differentiation and innovation breakthrough that I have been asking the team to do.

Connected Insight: What effect did Xiaomi OTT’s advertisement bring to customers?

Chen Gaoming:Our advertising has two effects. The first effect is that users choose to experience after watching advertisements, and this kind of data may be hundreds of thousands or millions. The advertising effect of the second layer is to treat the user experience as an event marketing and make a diffusion effect.

For example, Pepsi-Cola makes an automatic cooking machine, and the advertising content is about an automatic cooking intelligent device that can be implanted with Pepsi’s customized menu. The number of first-tier advertisements that attract users to buy machines may not be large, but you can ask Gourmet KOL to cook with this smart device. The video taken as a content spreads on the Internet, which is the second-tier effect of advertisements and its real value.

Connect Insight: Xiaomi OTT ecology, is there a project linked with Xiaomi ecology? Are there any advertisers who consider advertising based on the ecological chain?

Chen Gaoming:If the advertisement is placed on the whole ecological chain of Xiaomi, it must be us and the customers who have deep cooperation, whether it is our mobile phone, TV, speaker or bracelet. Maybe only Xiaomi in China can really do intelligent ecological linkage and do some AIoT projects like this.

First of all, we will choose a particularly suitable customer. When the customer’s brand tonality, the pursued user experience or some scenes are adapted to us, and the value of Xiaomi ecological chain is recognized, we will deepen innovation and development with customers.

For example, the cooperation project of Merrill Lynch antipyretics with Xiaoai classmates and second-second intelligent thermometers, through AI plus IoT, can ask Xiaoai assistant to record the baby’s temperature changes in real time and provide nursing tips. This is a joint cooperation between advertisers, OTT and Xiaomi ecological chain. This integrated marketing of AIoT is the advantage of Xiaomi’s business ecology, and the project plan and implementation need to be repeatedly scrutinized.

Wired Insight: What do you think of the OTT marketing "breaking the circle" in 2024?

Chen Gaoming:The real broken circle is not caused by factors, but by internal problems. Due to the large number of players in the industry and the lack of a unified big market, OTT’s circle breaking speed is slow.

I hope to explore with players in the industry, focusing on value: creating value, transmitting value and verifying value.First of all, creating value includes the upgrading of marketing theory and the acceptance standard of big screen and other industry trends. Secondly, pass the value to customers and industries to promote cooperation; Finally, verify the realization of value.

Wired Insight: if you use three keywords to set the tone for the marketing trend in 2024, which three will you use?

Chen Gaoming:The first is rationality. Don’t expect too much from the market. Don’t be too pessimistic.

The second is the breakthrough, not only the action, but also the breakthrough of thought, idea and cognition.

The third is growth. In essence, all marketing problems are growth problems. The goal of all brands is to grow. At present, we are far from the ceiling of the industry, and there is still a lot of room for growth.

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