Q&A: ADMA Chairman on Social Commerce, Analytics, and Do Not Track

One billion seems to be the magic number this year. In May, China announced it has topped a billion mobile subscribers. Meanwhile, an annual report released by the Asia Digital Marketing Association states that there are now more than a billion people online across Asia Pacific.

The report pointed out that this one billion-user base is spread across more than 14 countries, spanning a variety of devices and platforms, languages, cultures, and online habits.

A key finding for 2012 compared to the previous year is the widespread adoption of smartphones that has shifted from an segregated mobile experience to an increasingly broadband web experience in the palm of mobile users. Many features that used to be regarded as being mobile breakthroughs are now considered part and parcel of the digital marketing experience. For instance, location-based services, tablets, iPads, and apps.

David Ketchum, chairman for the ADMA and president of Bite Communications, Asia Pacific spoke to ClickZ.asia on the highlights of the Yearbook findings. Excerpts of the Q&A below:

David Ketchum, ADMA chairman

Q: What are the hot trending areas in social commerce?

David Ketchum: China – it’s got growth and social media is already at scale. Netizens have relatively few concerns about privacy compared to westerners, and they have increasing access to secure online payment options, at the same time that credit card usage is growing. This is a magic mix for social commerce.

We’ll see a lot of innovation and exploding numbers in China, but unfortunately many of the platforms developed and lessons learned will not have much relevance for other consumer segments or countries beyond the limits of the great firewall of China, since the PRC has its own media properties and consumer dynamics. In fact, seven of the top eleven sites in the Asia Pacific region are in China, so it’s an ecosystem of its own.

Sectors that are well positioned to participate in social commerce include financial services, travel, automobiles, luxury goods, and telecoms services. These are currently the most advanced e-commerce segments, and providers have the best-developed online infrastructure so there is a clearer path to sales as compared with other sectors. Also, consumers have strong opinions on these brands and topics, and there is a rich body of content for users to share, discuss, and endorse as influencers.

B2B is going to be the next big wave in social commerce, although it will be invisible to 95 percent of the online population. The B2B e-commerce transaction statistics from places like Korea, Japan, and China are astounding, fuelled by tens of millions of SMEs trading with each other online, as well as business-to-government large scale sales. Social media isn’t just about millions of people connecting.

In the B2B context, having just a few dozen highly influential people interacting can have a tremendous impact on market perceptions. And B2B social media offers unprecedented opportunities for product/service education, and to listen in real time to the opinions, motivations, and objections of the multiple stakeholders involved in most B2B purchasing decisions.

Q. Are brand marketers now more informed about measuring social metrics?

Ketchum: The secret to social media measurement is to understand the difference between the business results you can generate and the various metrics the process of engaging in social media kicks off. There are many indicators of reach, resonance, tone, engagement, and influence that are really important for marketers to monitor and interpret, but they are not in and of themselves business results.

Smart marketers are setting their medium term objectives on business goals such as increased brand preference, higher net promoter scores, sales, stock price, or brand value. Then the other metrics become useful benchmarks, diagnostics, and input for data analytics to help create and sustain campaigns that achieve the business goals.

As an example, let’s say an airline is launching a new route and wants to drive online sales of tickets on that route. So, sales are the desired result. However, there is a clear funnel to get someone from first having awareness of your airline, and then to the new route, to interest in travelling on the route or to the destination, to consideration of buying a ticket, to making a sale. Along the customer journey from awareness to sales, metrics such as Facebook friends, number of re-tweets, website traffic, click-throughs to emails, posts from influential bloggers and online media coverage can have tremendous value for understanding what is working and what’s not, and how to optimize your campaign.

Q: Are more companies investing in analytics?

Ketchum: The number one priority for brands is to bring together and draw significant conclusions from all the vast data streams they are collecting about their customers, their likes/dislikes, and behaviors. Most brands are now beginning to derive intelligence from the e-commerce, web analytics, retail data, credit card stats, and in-store data they receive. Few are yet in a position to pull together the point of sale, social media, database marketing, and e-commerce data they have into a comprehensive picture of their customers. This will take some time, but the knocking down of the online/offline data walls and the use of sophisticated software solutions will yield better insights for brands and ultimately better brand experiences for customers.

Q: Privacy and do-not-track policies: what approach are companies in Asia taking?

Ketchum: The key distinction with regard to tracking is the difference between gathering lots of personal data which is saved as a profile of you, as compared to aggregate data which can predict what you like or would want to do next.

As the technology and algorithms improve, people seem to have fewer concerns about the Amazons and Googles of this world predicting their individual requirements/responses/making personal recommendations as long as they trust the platforms to which they are giving the underlying data, and as long as it returns a useful benefit to them.

Brand marketers, and email/data companies such as ADMA member Epsilon, are taking increasingly sophisticated and market-sensitive approaches to the collection and use of data. It’s valuable for the leading industry players to set help standards and consult on legislation to calibrate guidelines at a level that protects consumers but is not so draconian that reasonable use of data is blocked that could be a benefit to consumers.

Established brands in the region are very conscious of staying well within the lines. Having said that, less responsible companies and individuals are every day testing the limits of unacceptable behavior online, using campaigns that range from inconsiderate, to improper, to illegal.

Q: You suggested making sense of overwhelming data by looking at search and social. How should a brand marketer manage search and social given the silos within companies and agencies?

Ketchum: One clear conclusion from the many closed-door brand and marketer Roundtables the ADMA has done in Asia has been that one of the main barriers to better and wider use of digital marketing has been the organizational silos that exist within companies. Different departments control different budgets and channels, and yet from a consumer and a brand perspective, integration is key.

Best practice is to appoint a CMO (preferably at Board level) who has the authority and the mandate to cut across arbitrary internal department and budget divides to unify the brand’s strategy and deploy the budgets against the greatest opportunities.

Q: Why should brand marketers in the U.S. and U.K. care about Asia?

Ketchum: It’s the growth, stupid. That’s the number one reason to be in Asia. For U.S. and U.K. based brands, you’ll likely experience lower profitability (unless you are one of a handful of well-positioned luxury brands). You will experience headaches operating businesses across multiple cultures, languages, and markets.

Growth is the reason Asia must be on your radar screen. China just downgraded its GDP growth to 8 percent. What other country considers that a downgrade? You also have youthful populations with increasing disposable income.

So here are three myths to debunk:

1. There is no such thing as Asia Pacific. China is as different from Australia as Italy is from Brazil. If you look at the region as incremental sales or opening new markets, that’s fine, but you will never get large-scale synergies across 11 or more different markets.

2. The Internet is now officially SOLOMO. As a business, you also will need to be social, local, and mobile. Although the web is a worldwide phenomenon, you will have to deal with differences in everything from language to content to culture to supply chain to fulfilment to returns policies to customer service. Tip your toe in carefully before leaping in!

3. Never underestimate the power of the local players. Global brands and business models are powerful, but consider either partnering with local and regional players or compete with them in very specific ways where you have some certainty of winning. Local players understand their end customer better than you ever will, and will have a web of distribution, marketing, and regulatory contacts you probably could never assemble. For example, consider partnering with Alibaba’s Taobao T Mall in China as your China e-commerce window. You will lose some control and perhaps margin but you will gain access to the right markets and tap into localized infrastructure that can mean the difference between your success and failure.

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