German web users see value in ads

BERLIN: A majority of internet users in Germany would rather be exposed to advertising than pay for online services and content, a study has found.

BITKOM, the trade body, partnered with Aris, the research firm, to poll 1,000 people, all of which were 14 years old or above.

Overall, 64% of the panel agreed they would happily exchange witnessing ads on the web for free access to internet sites and the digital material they contain.

Totals here rose to 83% for 14–29 years olds, versus 49% among their counterparts over 50 years of age.

By contrast, just 28% of the whole sample expressed a preference for meeting a fee in order to avoid commercial communications.

Participants who were 50 years old and above logged 37% on this metric, more than doubling the total of 14% registered by those under 29 years of age.

"Many internet users are open to advertising because it allows a low level of pricing for online services," Dieter Kempf, the president of BITKOM, said. "But the group who will pay to be commercial-free also hold a high potential."

Kempf further suggested that it was incumbent on members of the internet and advertising industries to be clear about the importance of brand messages in supporting the current online arrangements.

"Whoever wants to restrict advertising must also say openly at the same time that they are asking the consumer to pay," he said.

Data sourced from BITKOM; additional content by Warc staff15 May 2012

Indian brands tap social data

NEW DELHI: Brand owners like SAB Miller, Tata DOCOMO and Mahindra & Mahindra are seeking to utilise social media data as a means of enhancing consumer engagement and sales in India.

SAB Miller, the brewer, ran a contest called The Coolest Job on Facebook, promoting Miller High Life, and offering to pay the winner to visit attractive social destinations and high-profile events. It secured 100,000 fans and 37,000 "applications".

However, Ranendra Dutta, vice president for IT at SAB Miller in India, told CIO India it was "tough" to establish firm correlations between such activities and financial metrics, even with access to market research and sales figures.

"Having a million likes on your Facebook page or a million followers on Twitter may not make a social media campaign successful," he said. "It's about time we started measuring the returns because the cost of not being on social media is way too high."

Mahindra & Mahindra, a conglomerate present in sectors from automotive to travel, reported that this medium has reduced its outgoings in areas from marketing to back office procedures.

Using the example of the organisation's Mahindra Holidays unit, VS Parthasarathy, the firm's group CIO, argued web users are increasingly relying on consumer reviews when making decisions.

"Social media eliminates the cost of a third-party recommendation agency," he added. "Social media has automated business processes that otherwise would've been a cost to the company."

Hungama, an online music download platform, has also invested in analytics software to track shopper behaviour on its own site and social media, with demonstrable benefits.

"Our analytics tools help us understand where our customers are coming from, what are they browsing and what songs they are downloading, helping us service them better," Manan Chhatrapati, Hungama's chief technology officer, said. "I can directly co-relate this with my revenue."

Tata DOCOMO, the telecoms brand, generates 2bn message impressions on Facebook each month, and draws consumer data from this source and equivalent social properties.

"The available information is analysed using social media analytics to intelligently identify and resolve customer pain areas," said Ashish Pachory, head of IT at Tata Teleservices.

"The information also helps us in market analyses of products launched by Tata DOCOMO and other telecom players. Most importantly, it helps us understand behaviours and trends to do targeted market launches and arrest any negative sentiment before it hurts our customers or our business."

Data sourced from CIO India; additional content by Warc staff15 May 2012

Consumer anxiety remains

NEW YORK: A majority of consumers in the US and Western Europe are still "anxious" about the future, a trend reshaping attitudes towards overall spending and categories like luxury, new research has shown.

The Boston Consulting Group polled 15,000 adults in 16 nations, including China, France, Germany, Japan, the UK and US. It revealed that anxiety levels were highest in Europe, where economic conditions remain adverse.

More specifically, 78% of Spanish respondents showed high anxiety. This total fell to 69% in Italy, 53% in France and 51% in the UK, while the US posted 52% and China 28%.

In France, Spain and the UK, a majority said they did not believe the economy would improve "for the next several years", hitting 48% in Japan, 47% in Italy and 43% in the US. These ratings stood at a more modest 39% in Germany and 33% in China.

Equally, over 30% of the Italian and Spanish panels felt insecure about their job prospects in the coming year, as did 29% of Britons and 25% of Germans. Scores fell to another low, of 12%, for the Chinese sample.

Elsewhere, concerns regarding their personal financial situation weighed heavily on lots of contributors, with returns surpassing 50% in Italy and 40% in the Spain, the UK and US. China again saw much greater optimism, on 16%.

"If you take the world from the perspective of the middle-class citizen in the US and Western Europe, we are still lurching from crisis to crisis," said Michael Silverstein, a BCG senior partner.

Looking ahead, 83% of adults questioned in China predicted the next generation would lead a "better life", plummeting to 28% for the UK, 21% for the US, 13% for Germany and 12% for France.

A key trend highlighted by BCG was a change in the issues which were seen as important by shoppers, with "health" climbing the rankings in many markets, especially France, Germany, Japan and the US.

Value for money witnessed the strongest increase in the UK, and was in the top three for their French, German and American peers. Luxury, by contrast, experienced a substantial decline across every market.

"Consumers will give up their hard-earned discretionary dollars for products that deliver. The roaring sales of iPhones are one of the best examples," Silverstein added.

However, the analysis also stated there would be a "sentiment hangover" as the recession recedes, meaning consumers were likely to spend "very cautiously" going forward, particularly in Greece, Italy and Spain.

Data sourced from The Boston Consulting Group; additional content by Warc staff15 May 2012

Diageo seeks to innovate

LONDON: Diageo, the spirits group, is tapping emerging markets, new consumer demographics and "pioneering" communications techniques in a bid to fuel growth.

Developing nations currently yield 40% of Diageo's sales, and its marketing spend in these regions has doubled in the last five years. Among the trends attracting particular attention here are customer recruitment and premiumisation.

Investing in indigenous firms such as Shui Jing Fang in China, Halico in Vietnam and Mey Içki in Turkey has also enabled Diageo to localise its portfolio in numerous countries.

"This brings together fantastic local brands and the combined strength of marketing knowledge ... from both parties," said Andy Fennel, Diageo's CMO. "In tandem, some of our most successful innovation launches and marketing work is being pioneered in these parts of the world to drive organic growth."

As well as the emerging middle class – due to expand by 50m people in Latin America and 40m in Africa in the near term – Diageo is prioritising women, over 50 year old and multicultural segments.

"Historically ... there was an assumption that targeting younger men was the most efficient way of creating aspiration among the entire population," said Fennel. "This may have been true in the past, but we no longer believe that it is."

The company is also moving beyond the traditional premium and super premium sectors, pushing "ultra premium" lines like Cîroc and Johnnie Walker Blue Label, as well as value offerings including Seagram's and White Horse.

In identifying the four principles underpinning its communications, Diageo employs an acronym, FACE, standing for flair, agility, consumer insights and execution. "The fundamentals of marketing don't change," said Fennel.

However, he added that the "context for our brand building is changing now faster than at any time in history." This shift spans the way people interact and socialise, and the way they connect with brands.

In response, Diageo is tapping the "inflection points" of music, new technology, entertainment and data. "We've been aggressively experimenting with digital marketing for several years now," said Fennel. "It's our intent to be a pioneer."

As an example, the firm has formed a tie-up with Madonna, the pop star, for Smirnoff and Johnnie Walker. Elsewhere, it allied with Facebook to double its number of "likes" to 20m in a year, used Apple's iAd mobile advertising platform, and has effectively leveraged Google's search engine.

To track results, the UK-based organisation has built a global digital dashboard covering all of its brands in terms of their scale, reach and consumer engagement. It has also partnered with analytics companies like EasyInsites, Tagify and Nexus.

"We're focusing on the use of data, and data assets, to provide us with a competitive advantage and to allow us to make better choices about the investments we make," said Fennel.

When assessing the payback from these efforts, Diageo monitors a variety of areas, especially financial returns, equity changes, claimed usage, and market share, he added.

Data sourced from Diageo; additional content by Warc staff15 May 2012

Chinese firms face obstacles to growth

BEIJING: Brand owners from China are pursuing a range of strategies to try and expand abroad, but the results experienced by firms like Lenovo, Li Ning and Jianlibao have been equally varied.

Lenovo, the IT group, bought IBM's PC arm and Thinkpad brand in 2005, and last year acquired Medion, a German firm, alongside forming a tie-up with NEC in Japan. It now also has major offices in Beijing, Paris and North Carolina.

"We are a global company with roots in China. Because of our acquisitions over the years, we are actually 'from' many different places," David Roman, Lenovo's chief marketing officer, told the BBC.

Lenovo's senior management features executives from over six markets, and it emphasises creating a global marketing framework, then adapting it to suit the local context. Shoppers in the 18-34 year old range are the primary target.

"We find that consumers in this demographic share many similarities across cultures given their level of connectivity and openness to new experience," said Roman.

Li Ning, the sportswear manufacturer, established a US arm in 2008, based in Portland, near to the headquarters of main competitor Nike. It also launched a flagship store at the same site, which has since been wound down.

It now runs a unit from Chicago that focuses on ecommerce, having allied with the Acquity Group. Craig Heisner, Digital Li-Ning's VP, digital operations, argued this gave it "more control" over product positioning.

"I don't think the original plan adequately presented the heritage of Li Ning as a major Chinese brand founded by a famous Olympian ... and then went right into a fiercely competitive overseas market going directly against the likes of Nike and Adidas," he added.

Jianlibao, the number one energy drink in China during the 1990s, also unsuccessfully attempted to crack the US in that decade as part of a push into more than 12 markets.

"Jianlibao's fatal flaw was that while it produced a good-tasting beverage, its brand name prevented it from being able to connect with the average American consumer," said Jack Shea, who was the firm's VP, marketing and sales in North America, and now of Attitude Drinks.

"On top of that, our North America operations did not have a sufficient marketing budget to make the necessary investments to promote Jianlibao within the United States."

An increasingly common strategy for Chinese firms is taking shares in overseas brands. Geely, the automaker, owns Volvo, the Swedish car marque, while Shandong Heavy Industry holds a 75% stake in the Ferretti Group, the Italian yacht manufacturer.

Bright Foods, China's second biggest food group, also recently bought a 60% share in Weetabix, the UK-based cereal firm. "We'll be focusing on bringing Weetabix's products to the rest of the world," said Wang Zongnan, chairman of Bright Foods.

Data sourced from BBC; additional content by Warc staff15 May 2012

Brands take to Google+

MOUNTAIN VIEW: Increasing numbers of major brands are now active on Google+, the social network, with consumer engagement rates also rising.

Simply Measured, the social media analytics firm, reported that 64 of the world's 100 most valuable brands, as identified by Interbrand, currently have an official presence on the Google-owned platform.

This marked an improvement from 62 in February 2012, with Xerox and Nike the new players to have joined. Some 61 leading operators had already signed up by December 2011, just a month after Google+ was opened up to corporate members.

Elsewhere, the study tracked the amount of "Circles" that brands are included in, with this term denoting the groups into which Google+ users can assign their contacts.

Overall, 22 brands had been "Circled" by more than 100,000 users. The leader here was Ferrari, the auto marque, on 730,831, H&M, the apparel chain, on 684,670, and Gucci, the luxury label, on 595,129.

Burberry, the premium fashion brand, Starbucks, the coffee house giant, Ford, the carmaker, and Samsung, the electronics manufacturer, all had figures toppings 500,000 here, as did Coca-Cola and Pepsi, the soft drinks rivals.

More broadly, engagement ratings with outbound posts by brands – determined by monitoring the frequency of recommendation, comments and sharing – rose by 112% measured against February.

"With engagement on the rise, early adopters are growing their audience and the general opportunity for brands is compelling. That being said, it is still early and the scale of brand activity on Google+ still pales in comparison to Facebook and Twitter," the study argued.

Google itself topped the charts for generating such responses among users, with an average post yielding 262 interactions. Coca-Cola came next on 191, beating Starbucks on 153 and Pepsi on 123.

Videos uploaded by brands to the site typically engendered the best reaction, ahead of text updates, photos, and then articles, with rich media seeing the greatest increases.

Marketers also seem to be making more regular efforts to refresh their pages, with 43 brands now posting at least three times a week, a rise from the 15 recorded in February.

Google reported in April that Google+ boasted over 170m members globally, although this leaves it substantially behind Facebook, which has over 900m active monthly users.

Data sourced from Simply Measured; additional content by Warc staff15 May 2012

UK consumers support online ads

LONDON: Consumers in the UK are mostly supportive of online advertising, with a majority recognising its importance to supporting free websites and content.

The IAB, the trade body, ValueClick, the advertising company, and Kantar Media, the research firm, polled 2,000 people, 61% of which agreed a lot of digital material would "disappear" without ads.

A further 52% were "happy" to see commercial messages on the net because they funded services and content which could therefore be enjoyed at little or no cost.

Only one out of every ten respondents displayed a willingness to pay for access to the same services and material if this meant they were not exposed to advertising.

Elsewhere, 59% of adults would rather see fewer ads with increased relevancy than a greater amount of less targeted alternatives, and 55% expressed a preference for more personalised communications from brands.

More broadly, 45% of interviewees aspired to control the type of internet advertising they saw, while 40% wanted to access any data being shared about them, and 36% desired information about the organisation showing them an ad.

Privacy is an issue of wider importance, cited as a matter of concern by 62% of consumers. An even more substantial 67% of contributors were confident they knew how to protect their online data.

As an example, half of the individuals surveyed had deleted cookies from their computer at some point in the last six months, and one in five did so each week.

Despite this, some confusion existed over the purpose of cookies; while 64% of the panel claimed to know what these were, just 57% actually identified the correct definition.

Overall, however, a relatively modest 19% of the sample failed to take any steps in an effort to manage their internet privacy.

Another 61% of participants stated that the net helped them live more cheaply, 46% thought web access should be a human right, and 42% would feel like a "second class citizen" if they could not log on.

Data sourced from IAB; additional content by Warc staff14 May 2012

Crowdsourcing offers strategic benefits

NEW YORK: Brand owners could benefit from "crowdsourcing" elements of their strategy, an approach already tested by firms like 3M and AEGON, McKinsey has argued.

In a new study, the consultancy name-checked some pioneering corporations from around the world which have attempted to leverage the "social side of strategy".

3M, the conglomerate, enhanced its planning tool, called Markets of the Future, by inviting sales, marketing and R&D staff to participate in a web-based forum to identify potential growth categories.

In two weeks, 1,200 employees yielded over 700 ideas, and nine untapped sectors, together worth tens of billions of dollars, were chosen. "Since then, 3M has held several additional InnovationLive events, and more are on the way," McKinsey said.

Another example was HCL Technologies, an Indian IT services provider and software developer, which launched My Blueprint three years ago. This online platform allowed its 8,000 members of staff to give feedback on proposals made by senior executives.

"Because the managers knew that the plans would be reviewed by a large number of people, including their own teams, the depth of their business analysis and the quality of their planned strategy improved," said Vineet Nayar, HCL's chief executive.

AEGON, the Dutch insurance group, also created a digital network, Square, based around its various functions, and which aimed to fuel conversations and empower middle managers. Some 85% of its 3,000 staff ended up contributing in just 12 months.

"People gathered in communities of practice and started sharing ideas on how to make the new strategy work. Dialogue really helped in fostering organisation-wide alignment," said Marco Keim, CEO of AEGON in the Netherlands.

Rite-Solutions, a software specialist, has built an in-house "stock exchange", Mutual Fun, enabling team members to give their ideas a mock "IPO", with other staff able to "invest" if they believe it is viable.

Suggestions in its top 20 receive seed money, and anyone working on projects that generate profits or savings get rewarded with a bonus or stock options. The 15 products Rite-Solutions developed in this way now supply 20% of revenues.

McKinsey also analysed data from 765,000 staff at 600 companies spanning more than a decade, and found even at the best-performing firms 25% of staff are "unclear about their company's direction". This total hit 60% at the least effective enterprises.

Elsewhere, it discovered that corporations which make their vision "meaningful" at the personal level and involve employees in setting this overall direction tend to be the most successful at boosting engagement.

Data sourced from McKinsey; additional content by Warc staff14 May 2012

European agencies downbeat on 2012

BRUSSELS: Less than a quarter of European advertising agencies expect revenues to increase this year, reflecting the difficult financial climate being experienced in much of the region.

The European Association of Communications Agencies, the umbrella group, polled members of its 22 national association affiliates, which include the IPA, AACC, IAPI and KOMA.

Overall, 43.5% of respondents regarded 2011 as being an "average" year when compared with 2010, versus 21.7% describing this period as "good", and 26.1% defining it as "rather poor" or "poor".

"The expectation for the industry in 2012 is split between stability and falling turnover", said Dominic Lyle, Director General of EACA. "The economic uncertainty is continuing to exert considerable pressure on agencies across Europe."

In assessing client behaviour, 40.9% of firms questioned reported investment levels in advertising had gone down, whereas 31.8% pointed to an increase and 27.3% stated expenditure was static.

More specifically, 87% of the panel agreed that marketing budgets had been altered due to economic factors, whereas only 13% disagreed with this opinion.

New media, online advertising and ecommerce had seen the strongest change according to 77.3% of interviewees, standing at 59.1% for traditional ads, and 22.7% for sponsorship and promotion.

As a signifier of the challenging financial conditions, 52% of the sample revealed communications were now more heavily orientated towards price and 30% cited the use of "more aggressive" appeals.

When discussing remuneration packages, 33% of agencies were paid on a project fee basis, 32% received hourly fees, 30% relied on commission, and just 5% were rewarded on results.

Looking at 2012, 35% of the featured organisations predicted agency turnover would be unchanged, 30% thought there was likely to be a decrease and 26% anticipated an improvement in returns.

When measuring communications effectiveness, all clients utilised performance indicators like market share, awareness, economic efficiency and advertising spend.

Post-advertising tests logged 36.4% here, while positively influencing brand value and the results of pre-testing both registered 31.8%.

Other trends identified in the analysis was the growing importance of pitch consultants, mentioned by 71% of contributors, and a rising demand for a broader range of services, on 81%.

Data sourced from EACA; additional content by Warc staff14 May 2012

Brand owners positive on Africa

JOHANNESBURG: Major brand owners are becoming more positive about the prospects for success in Africa, with Ford, DHL and Nestlé among the companies making progress in the region.

Ernst & Young, the services firm, polled 505 executives, 60% of which agreed Africa was a more attractive place to do business than three years ago. Another 73% predicted this trend should continue in the next three years.

Upon being asked what changes would enhance Africa's appeal, greater political stability registered 87%, less corruption hit 82% and easing obstacles to business generated 67%, easily the top three here.

"When it comes to the African continent as a whole, we have encountered some challenges regarding the regulations - not only their onerous nature but also the variation that exists in enforcement - from country to country and within countries," said Jeff Nemeth, CEO of Ford Southern Africa.

In reflection of the present potential for brand owners, Ernst & Young revealed Africa's 54 states collectively housed 1bn people and boasted a combined $2tr in annual GDP.

Some progress is tangible, as the number of local foreign direct investment projects climbed from 675 in 2010 to 857 in 2011, although this did fall behind the 901 logged in 2008, before the recession.

From 2003 to 2011, 24.6% of these projects sought to enhance manufacturing capabilities, with business services recording 20.5%, and sales, marketing and other support functions posting 17.9%.

Elsewhere, the study pegged annual consumer spending in Africa at almost $1tr, with the relatively affluent "consumer class", earning between $2 and $20 per day, now making up 40% of the population.

"We're ... concentrating on a 'go to' strategy which targets the 80-90% of the African population who live outside of urban centres. If you can tap into this market, and create the infrastructure and accessibility, then the sky is the limit," said Charles Brewer, DHL's managing director, Africa.

The top three investors in Africa from 2003 to 2011 were Banco BPI, Ecobank Transnational and BNP Paribas, the financial services groups. Tata Group, the Indian conglomerate, was fourth.

"Looking forward, I think the greatest opportunities will lie in the mass retail segment," said Arnold Ekpe, CEO of Ecobank. "Less than 20% of the African population has access to formal banking facilities - which represents a huge opportunity."

Also featuring in the top ten on this metric were IBM, the services firm, Nestlé, the food expert, SAB Miller, the brewer, Coca-Cola, the soft drinks manufacturer, and Total, the energy giant.

Data sourced from Ernst & Young; additional content by Warc staff14 May 2012

McDonald's in China push

BEIJING: McDonald's, the fast-food group, is focusing on quality, service and an "anytime, anywhere" business model as it seeks to make progress in China.

The company unveiled its first Chinese branch in 1992, and it now runs over 1,400 outlets across the country, which has gone on to become its third biggest market worldwide.

In 2011 alone, 200 new McDonald's stores began trading in the country, and it intends to add an extra 225 to 250 in 2012. Despite this, however, it will still lag considerably behind KFC, owned by Yum Brands, which has a 3,500-strong chain.

In response, McDonald's plans to boost investment rates by 50%, rolling out dessert kiosks and drive-thrus, extending opening hours, and building up its delivery service, Kenneth Chan, the firm's China CEO, told Fortune.

"We are not looking to be the largest in terms of the number of outlets, but we want to be the best-quality, best-service restaurant. We hope to attract more and more customers to increase same store sales," he said. "We want to be available anytime and anywhere for our customers."

The US organisation will renovate 80% of its Chinese portfolio by the end of 2013, with varying designs. Wherever families predominate, for example, play areas for children will be set aside, while kiosks in business districts offer coffees and pastries.

More broadly, the company believes that breakfast, currently yielding 8–10% of sales, could see sales double. Elsewhere, it is introducing healthier lines, and adapting menu items to suit local tastes.

"We also offer customer-friendly amenities like free Wi-Fi and McCafes. We want to stay relevant to the younger population and make them stay longer," said Chan.

Similarly, in reflection of the firm's long term emphasis on value, McDonald's provides a range of menu options priced from $1 to $3. "We want to be affordable so Chinese consumers can come here often and not just as a treat," Chan said.

While 80% of McDonald's sites around the world are run by franchisees, only 36 restaurants in China operate using this approach, a figure the company hopes will increase going forward.

Alongside seven conventional licensees, McDonald's has two "development" franchises in place, giving partners with an impressive financial and business background scope to press into provinces where it currently lacks the capacity to penetrate.

"It's still a very low percentage and over a very short time that will change. The pace of franchising in China depends largely on finding the right partners," said Chan.

Data sourced from Fortune; additional content by Warc staff14 May 2012

Coke channels "discontent"

ATLANTA: Coca-Cola, the soft drinks giant, is attempting to build a "constructively discontent" culture as a means of doubling its revenues by the end of the decade.

This idea asserts that Coca-Cola is "not fast enough, not innovative enough, not entrepreneurial enough," Muhtar Kent, its CEO, told Fortune. "It's all about an entrepreneurial mentality. I've worked religiously to get that into the company."

Coca-Cola has replaced roughly 70% of senior management since Kent took the helm in 2008, and become increasingly global, with five of its 15 billion-dollar brands actually created outside the US.

Acquisitions have also played a central role in its approach, such as the $4.1bn purchase of Glacéau, the maker of Vitaminwater, in 2007. The firm is similarly now in talks with Monster Beverages, the energy drinks expert, regarding a possible tie-up.

Equally, however, it has established a Venturing and Emerging Brands unit to identify the next generation of hit products, with a current roster including Honest Tea, Zico, illy issimo and Cascal.

"The future of the world belongs to two groups: those that can grow and those that cannot grow. Those that don't grow will go into oblivion," said Kent. "Looking at the stock is just a loss of time."

Innovation has also been vital, especially in slow-growing nations like the US, where the Freestyle Fountain Dispenser, which allows consumers to mix their own drinks, and a range of smaller pack sizes have proved successful.

However, while the US remains Coca-Cola's biggest outlet, with sales reaching 5.5bn cases per year, emerging markets are proving increasingly influential.

Mexico consumed a total of 3.4bn cases last year, a figure standing at 2.1bn in China and 1.9bn in Brazil, ahead of Japan on 960m and Germany on 640m. India is at a more nascent stage, on 600m cases.

"China will be Coke's largest market, I can't give you a time. But it will happen," Kent said. The US operator recently opened its 42nd, and largest, plant in China in recognition of the country's potential.

Limiting costs is another area of focus for Coca-Cola, from making $350m in savings a year by taking over its bottlers to requiring senior staff pay $15 if they make personal calls on a company mobile phone.

"People need to feel like they are chasing pennies down the hallway," Kent said. "When you don't see cash, all sorts of things go wrong. You overspend as an individual and overspend as a company."

Data sourced from Fortune; additional content by Warc staff14 May 2012

GE takes long term view in China

BEIJING: General Electric, the US conglomerate, believes taking an innovative, flexible and long term approach will be essential to succeeding in China.

The firm anticipates its sales in this market should rise by 15% in 2012, roughly tripling China's forecast GDP growth, not least thanks to the government's on-going emphasis on infrastructure projects.

John Rice, GE's president of global growth and operations, told the China Daily that fluctuations in performance were still probable, but the broader outlook remains extremely positive.

"Although in any quarter you could see a challenge in the business, in the long run we believe China will be the world's largest economy, making it a place where companies have to take a long-term view," he said.

Further obstacles that follow on from trading in China include an uncertain regulatory environment covering areas such as joint ventures and intellectual property.

"But I feel it in other countries too. Sometimes the decisions that the government makes aren't always clear to people like myself," said Rice. "We have to be agile and flexible in our business model in terms of how we participate into the Chinese economy."

The multinational corporation generated revenues of $5.7bn in China last year. Of this, GE's industrial-led units delivered $4.9bn, just 9% of the global returns for this aspect of its activity.

Operating costs are also rising, but GE does expect overseas players to gain greater freedom to take on projects in the energy and transportation sectors, where it is strong.

"I think it's important for us to focus on the creation and competence abilities in the work we do in China, which would ensure that we could offset inflation and the cost of higher wages with productivity and other advantages."

Innovation will be a key component of GE's strategy in China. It currently runs two R&D centres, in Chengdu and Sichuan, with a new site planned to open in Xi'an in July.

"The Chinese market is one of the most important markets that we have in the world. It's important because of the size of the market, but also because of the thought leadership that takes place here," said Rice.

Expanding its geographical presence through western and central China, which are attracting growing numbers of brand owners, is vital to GE's prospects, he added.

"You have to be there, to be an investor and know the local government, the mayors, and the provincial government. That's what is going to determine our success in China over the next 50 years," said Rice.

Data sourced from China Daily; additional content by Warc staff11 May 2012

Location-based adspend to rise

GOTHENBURG: Expenditure on real-time location-based advertising delivered via mobile phone is due to increase more than twenty-fold in the next five years, a forecast has predicted.

Berg Insight, the consultancy, has reported that adspend through this channel stood at just €192m in 2011, equating to 5% of total mobile ad revenues for the year.

Looking ahead, the company was optimistic regarding the medium's prospects, arguing returns should log a compound annual growth rate of 90.9% between now and 2016, to a value of €4.9bn.

Such a figure would be equivalent to 28.3% of mobile marketing budgets, some 4% of digital outlay, and 1% of all adspend worldwide.

According to the report, Asia Pacific – home to the major, and rapidly-growing, mobile markets of China and India – will be the most valuable region for the sector, in front of Europe and North America.

The study suggested the "key drivers" for this industry include the increasingly widespread usage of handsets containing the necessary technology, and rising consumer acceptance of these ads.

"Local advertising is a major market, and LBA opens up the mobile channel for new advertisers such as local merchants," it added.

This strength is, in another sense, an obstacle, as the restricted reach of campaigns may prove to be a "mental hurdle" for some brand owners.

An education drive to inform marketers about the benefits of location-based services, and the need to institute the correct privacy controls, will also be essential.

Berg Insight was confident greater uptake could be achieved given the favourable payback and relatively affordable electronic cost per thousand (eCPM) that are typically on offer.

"It has been demonstrated that location-targeted ads generate considerably higher return than conventional mobile advertising, and the associated eCPM levels are several times higher," it said.

"The demand for hyper-local targeting of ads is so far limited among advertisers, but is bound to increase given the considerable impact such campaigns generate."

Data sourced from Berg Insight; additional content by Warc staff11 May 2012

Agency payment models slow to change

NEW YORK: Agency remuneration models are proving slow to change, with less than 5% of major advertisers currently using value-based payments, a study has revealed.

The Association of National Advertisers, the industry body, polled 71 client-side marketing executives, including representatives from Brown-Forman, Dell, Ford, IBM, Intel, Johnson & Johnson and Merck.

In terms of global agency compensation, 57% of the featured organisations still utilised fees, either fixed or labour-based. An additional 37% opted for a mixture of fees and commissions.

By contrast, only 4% of the corporations surveyed had implemented value-based payment systems, rising to 7% for firms with an annual advertising budget topping $100m.

An even more modest 2% relied on sales commission, but none had yet instituted a similar structure premised on media commission.

But 49% of enterprises placed incentives or "pay for performance" elements within remuneration packages, reaching 68% for consumer-facing players, versus 38% for their business-to-business counterparts.

Incentives rested at least in part on agency reviews in 81% of cases, falling to 53% for hitting media targets and 47% apiece for attaining brand awareness and sales goals.

Elsewhere, 44% of respondents employed brand perception and market share metrics as part of this process, 41% used copy testing results, 31% prioritised digital media objectives and just 13% looked to actual profits.

When creating and managing advertising assignments, 20% of firms did so from the US, 11% has a regional model and 14% let individual markets handle these duties. A 51% majority, however, combined all three approaches.

For contract negotiations with agencies, 47% of companies reported that their procurement departments took the lead with marketing teams assuming a supporting role. These positions were reversed at a further 28% of firms.

Looking ahead, 35% of advertisers do not intend to change compensation levels in the "next year or two", 27% hope to cut payments, 24% will use more incentives and 19% anticipate centralising or consolidating payments.

"While many global marketers may establish their approach to agency compensation at corporate headquarters, most need to rely on their regional and local operations, in combination with their procurement colleagues, to effectively address significant differences in local costs, practices, laws and cultures," said David Beals, chief executive officer of R3:JLB, who worked on the study.

Data sourced from ANA; additional content by Warc staff11 May 2012

Tablets fuel new habits

LONDON: Consumers who own tablets are adopting new communications habits, but are also making fewer visits to stores, multimarket research has shown.

InMobi, the mobile advertising network, and Mobext, the agency run by Havas, polled 8,400 people in India, France, South Korea, the UK and US, finding that 69% of tablet owners had shopped via the devices in the 30 days before the survey.

Another 10% would be happy to acquire a "big ticket" item via this route, falling to just 2.9% for smartphone users, where purchases are often functional and of low value.

Over 20% of tablet early adopters claimed to have made less trips to bricks and mortar stores after obtaining this gadget. This trend may gain traction as a third of people yet to own such an appliance hoped to buy one in the next six months.

Elsewhere, 61% of the existing tablet community revealed this channel played a key role in building brand awareness when used at home, as did 58% for "active evaluation" and 63% for completing transactions.

Smartphones were pre-eminent when out-of-home, as over 40% of shoppers agreed they built awareness, consideration and purchase here, while more than a third said the same for evaluation and after-sales support.

More broadly, tablet users regularly employed these devices to undertake 3.9 activities, ahead of 3.6 different pastimes on laptops and 2.7 on smartphones.

Looking at media usage, 58% of people with an iPad or similar offering accessed content - and especially rich media - in short bursts throughout the day, as did 56% of their smartphone counterparts.

An additional 72% of this audience watched TV and used their slate simultaneously, and 20% spent more time in front of the television having bought a tablet.

"The arrival of game-changing touchscreen technology has given rise to rapid changes in media consumption patterns," said Chris Bourke, Mobext's managing director. "This new phenomena is characterised by acute advertiser anxiety when trying to configure their digital marketing plans."

For 51% of participants already owning a tablet, utilising it filled "dead time", while 49% shared it with family members.

A further 44% of the same group "would not want to be separated" from their tablet, and 42% found that this gadget had "revolutionised" the way they communicated with friends and colleagues.

Data sourced from InMobi/MPG; additional content by Warc staff11 May 2012

Consumers suffer social media "stress"

SINGAPORE: Many young consumers are feeling pressurised by the "obligations" that come from using social media, a survey covering China, Singapore and the US has found.

JWT Singapore, the agency, polled 900 people in the 18–26 year old demographic, 50% of which agreed sites like Facebook and Twitter had become "too time consuming", a figure hitting 66% in China.

Almost half of the panel also reported experiencing "stress" due to the effort ongoing interaction on these services demanded, again growing to 57% in China.

Equally, a majority were weighed down by the "pressure" of being in "constant contact" on these platforms and felt it was mandatory to "like" friends' status updates and photos. The Chinese sample also beat the norm here, on 68%.

In all, 60% of the interviewees revealed friends asked them personally to look at comments and pictures, and 53% of Americans in employment felt "guilty" if they didn't respond to messages instantly.

"Young adults are super wired, and that's created an ever-present social obligation that's starting to wear them down," said Angus Fraser, managing director of JWT Singapore. "This demographic is clearly suffering from rising levels of social media stress."

Overall, 45% of people polled in Singapore visited social sites in the middle of lectures or classes. More than 30% of Americans did so upon waking late at night and 14% of Chinese users pursued the same pastime in meetings.

A further 13% of the entire survey community had logged on when out on a date, as had 11% when lying next to their partner in bed, and 7% during what the study termed "intimate moments".

Some 29% of Americans accessed these platforms when getting dressed, and 35% often multi-tasked in this way while talking on the phone.

Elsewhere, 67% of Chinese contributors said they appeared to be "more attractive" in their social media profile picture than real life, falling to 53% in Singapore and 35% in the US.

A majority of the individuals questioned had also been late for a meeting due to lingering on these web properties, and 40% had experienced conflict with their friends, family or partner for this reason.

In China, 65% of people currently in employment felt under pressure to be constantly available on social media and 62% believed it was important to appear witty on these sites, which 58% regarded as a "source of stress".

More broadly, among respondents in employment across all the featured countries, 57% were sometimes jealous of their peers on these services, and 55% had "felt bad about themselves" after gaining an insight into the lives of other users.

Data sourced from JWT Singapore; additional content by Warc staff11 May 2012

Facebook faces mobile test

PALO ALTO: Facebook, the social network, is facing a variety of challenges to its advertising model as more users log on via mobile phones, the company has admitted.

The online giant has updated an SEC filing, issued in preparation for its forthcoming IPO, and spoke of the risks resulting from growing mobile use given its "unproven" ability to monetise this space.

Overall, its platform boasted 901m monthly active users as of March 2012, up by 33% year on year, and 526m daily active users, a 41% improvement during the same timeframe.

Turning to mobile, some 500m people accessed its pages through this route as of April 2012, an expansion topping 12m month on month.

"We believe this increased usage of Facebook on mobile devices has contributed to the recent trend of our daily active users (DAUs) increasing more rapidly than the increase in the number of ads delivered," the company said.

In evidence of this, it reported that the amount of ads it delivered climbed by 35% in the first quarter, when daily average user levels leapt by 41% and the monthly equivalent rose 33%.

"Based upon our experience in the second quarter of 2012 to date, the trend we saw in the first quarter of DAUs increasing more rapidly than the increase in number of ads delivered has continued," the filing added.

This may be because Facebook featured no ads on its mobile service until March 2012, when it added sponsored stories to the News Feeds of users.

"We believe this trend is driven in part by increased usage of Facebook on mobile devices where we have only recently begun showing an immaterial number of sponsored stories in News Feed," the filing argued.

Facebook also quoted a forecast from IDC, the insights provider, predicting that mobile adspend would reach $17.6bn worldwide in 2015, compared with $1.5bn in 2010.

Factors fuelling this favourable shift are likely to include changing habits in mature markets like the US and Western Europe, alongside rising mobile web usage in emerging markets, where handsets are often the primary means of going online.

Facebook's advertising revenues rose by 69% to $3.2bn in 2011. This pace of growth slowed slightly, to 37%, in the first quarter of 2012, when total ad sales stood at $872m.

Data sourced from SEC; additional content by Warc staff11 May 2012

German firms slow to embrace new tools

BERLIN: Less than half of German companies are using social media, despite the rising popularity of sites like Facebook and Twitter among consumers.

BITKOM, the trade body, surveyed 732 firms forming a representative sample of the entire German economy. It found that 47% already utilised social media and 15% plan to in the near future.

Some 86% of organisations currently engaged with these platforms had a presence on social networks such as Facebook and Xing. Another 28% used video-based properties, primarily in the form of YouTube.

Blogs logged 28%, beating microblogs – say, Twitter – on 25% and branded online communities with 13%, the same score as content-sharing sites like Flickr and SlideShare. Location-based offerings including Foursquare, however, posted just 1%.

Among the firms active on these and similar channels, 82% did so to build awareness, 72% hoped to secure new buyers and 68% wanted to deepen customer relationships.

Elsewhere, 42% of businesses turned to this medium to improve their image, 31% conducted market research, 23% wished to attract potential staff and 15% sought to enhance innovation.

More specifically, 75% of the same enterprises used social sites for advertising, standing at 71% for marketing, 59% for PR, 36% for customer service and 17% for internal communications.

Looking ahead, 62% of these relatively early adopters believed social media would assume greater importance going forward, increasing to 89% for the largest featured players.

When considering investment levels, 41% of this cohort expected to boost budgets, 42% anticipated maintaining their outlay and only 12% intended to cut back.

For the companies yet to embrace this medium, 62% said their target audience was typically absent from this platform, and 50% mentioned legal uncertainties, for example linked to data protection.

A further 45% stated that social media did not "fit their corporate culture", while 28% regarded the staffing resources required as too great, as did 14% for the necessary financial investment.

"Some of these concerns are understandable, but ignoring social media altogether is risky," said Dieter Kempf, the president of BITKOM. "Discussions about brands and products made by these companies will find a place on the social web anyway."

Data sourced from BITKOM; additional content by Warc staff10 May 2012

AT&T seeks out Indian innovators

NEW DELHI: AT&T, the telecoms giant, is looking to identify pioneering Indian start-ups which are developing innovative new technologies.

The US multinational runs a programme at the international level seeking to discover promising software, services and similar products, and launched a dedicated scheme in India last year.

It has now picked four indigenous companies in the Asian nation that it plans to form partnerships with, and might also then opt to invest in.

"Mobility and network optimisation is a critical area for these partnerships, given the demand on the network and the whole capacity crunch," Sanjay Macwan, assistant vice president at AT&T's chief technology office, told the Wall Street Journal.

One firm tapped up by AT&T was Invention Labs, based in Chennai and an expert in mechanical and mechatronic engineering. It has been tasked with enhancing AT&T's portfolio for customers with neuromuscular and developmental disabilities.

It was chosen after AT&T ran a "speed-dating" event in April with roughly 12 potential providers, all of which were given 20 minutes to demonstrate their credentials.

Having run a pilot project with each of the four Indian firms selected, AT&T could then supply up to $1m in funding, and may ultimately offer the relevant services to enterprise clients or consumers.

In a bid to uncover possible allies, AT&T has used Sequoia Capital and Norwest Venture Partners, the venture capital companies, for guidance, alongside Tech Mahindra, the software firm.

In 2011, AT&T held meetings with approximately 40 local operators, but in the end went on to work with just one, on cloud-based software services for developers.

Another of these firms was introduced to one of AT&T's partners – examples of which include Alcatel Lucent, Cisco and Ericsson – showing it can also be a "match-maker", Macwan said.

To date, however, India has not yet yielded results to match the world's premier innovation hubs. "We have had more successes in Silicon Valley and Israel than in India," said Macwan.

More positively, he added that India was "getting closer" to the level required, leaving room for

optimism about the future.

Data sourced from Wall Street Journal; additional content by Warc staff10 May 2012

Companies struggle to engage customers

NEW YORK: Less than 10% of US companies think they are genuinely "customer-centric" in their strategy and activities, new analysis has shown.

The Temkin Group, a consultancy, polled 255 representatives of firms with revenues topping $500m, and found that just 7% of the panel believed the customer experience they provided was superior to all of their rivals.

A further 28% placed performance levels "considerably above" the industry average, while 30% "slightly" improved on the norm, and 23% fell into line with typical standards for their sector.

Some 11% of operators rated their performance across shopper touchpoints as "slightly" lower than their category, and 2% were "considerably below" this benchmark.

Looking ahead three years, 10% of businesses wanted to become cross-industry leaders in this area, and 49% hoped to assume a similar status within their specific market.

Of the rest, 28% set the goal of being "considerably above average" measured against their direct competitors, 8% wished to "slightly" better the opposition and 4% were seeking to match the norm.

"We're still in the early stages of evolution for the entire field of customer experience management. Companies are ambitious to improve and we are seeing some companies build up the professional discipline to succeed," Bruce Temkin, managing partner of the Temkin Group, said.

Within the overall figures, only a third of enterprises had developed the necessary brand values and employee engagement to become truly "customer-centric", the report added.

Six in ten corporations had a named senior executive who was heading up their customer experience efforts, with between six and eight staff members working in this discipline in all.

Nearly 80% of the brand owners currently using "voice of the customer" schemes to regularly track sentiment among buyers reported that they had delivered positive business results.

A 56% majority of brand owners also used a Net Promoter Score (NPS), a metric derived by subtracting the number of brand detractors from its advocates to determine recommendation levels.

This total had grown from 49% in an equivalent study published last year by the Temkin Group. Other recent research using this tool found Amazon, USAA and Trader Joes posted very strong NPS results.

Data sourced from The Temkin Group; additional content by Warc staff10 May 2012

Shell, Unilever make digital progress

LONDON: Shell and Unilever are the major UK firms making the most effective use of digital channels to strengthen their corporate brands, according to a study.

Radley Yeldar, the consultancy, assessed the official websites, social media and mobile activity of businesses in the FTSE 100, an index of the largest companies on the London Stock Exchange.

Some 98% of this group were present on LinkedIn, the business-orientated social network, and 56% ran accounts on Twitter, the microblog, falling to 21% for having mobile optimised websites and 17% for apps.

Shell, the oil and gas specialist, led the rankings, based on how well corporate communications rated in terms of "story", "relevance", "experience", "timeliness" and "connectedness".

More specifically, Shell was placed second to Reckitt Benckiser, the homecare expert, for its social media output, and first for mobile and apps, partly due to creating a mobile website that adapts to fit the size of a user's screen.

Unilever, the FMCG giant, was second overall, after making considerable use of digital to champion the Sustainable Living Plan, aiming to halve the environmental impact of its products.

"We are doing this to tell the story behind Unilever, and I would want Unilever to be a quality mark of sustainability," Keith Weed, Unilever's CMO, told Marketing Week. "People are getting much more interested in finding out about the company behind the brand and have the tools to go online and find out more."

SAB Miller, the brewer, was third, followed by Kingfisher, the home improvement firm owning chains like B&Q, and which has a mobile-optimised website, and an iPad app letting staff view vital data.

"The iPad app was developed with analysts and investors in mind, but it also allows senior management to access Kingfisher information on the move," Clare Haines, media relations officer at Kingfisher, said.

Completing the top five was Aviva, the insurance provider, credited with successfully balancing its international and local websites, offering a video library and delivering a corporate responsibility blog.

"We have to keep our colleagues informed about what is being talked about on Twitter, what are the concerns of journalists and the themes that are running through the coverage," said Sue Winston, Aviva's head of media. "We act as a listening post as well as a source of external communication."

On average, the featured firms received a modest score of 26% regarding how well their content was linked across channels, a total that rose to 45% for timely communications, the analysis added.

Data sourced from Marketing Week; additional content by Warc staff10 May 2012

Nuanced model key in China

BEIJING: Brands must adjust their tactics in China to meet the long-standing desire for well-known, trustworthy products as well as reflecting a new interest in specialist offerings, McKinsey has argued.

Writing in the Harvard Business Review, Max Magni, head of McKinsey's consumer practice in Greater China, and Yuval Atsmon, from its Shanghai office, stated shopper habits could be "changing yet again."

"Until now, research has shown that the Chinese usually trust better-known brands, primarily because the latter help assuage concerns over product quality and safety," they argued.

In evidence of this, McKinsey found 35% of Chinese consumers thought firms selling goods in a variety of categories were "more trustworthy" than their rivals only active in one or two areas.

By contrast, just 18% of American shoppers questioned on this matter took the same view, a figure falling still further, to 13%, among respondents from the United Kingdom.

Master Kong provides one example of how indigenous companies have responded to such a trend, selling instant noodles, drinks and cookies under the same umbrella.

"Multinational giants like Kraft, P&G, Unilever, and Coca-Cola use a variation of the same tactic: They emphasize the corporate brand more in China than in other markets," Atsmon and Magni added.

In a related trend, however, "self-expression" seems to be gaining ground, as 19% of China's consumers now believe "emotional benefits" are important when buying products from chocolate to mobile phones, up from 1% in 2009.

Such a development is also observable in low involvement segments like detergents, where 7% of buyers desire lines that both work and help them "feel special", versus 2% in 2009.

"As the Chinese become more knowledgeable about products and more affluent, and safety standards become tighter and better enforced, they'll feel safer trying out lesser-known brands," Magni and Atsmon said.

Friso, an infant formula brand from the Netherlands, has thus differentiated itself from rivals that solely focusing on safety by seeking to build emotional bonds via the tagline of being "mom's best friend".

It has also created a specialist website offering hints and tips for expectant mothers, which received 50,000 unique visitors in two months, building its connection with this audience.

Data sourced from Harvard Business Review; additional content by Warc10 May 2012

Amazon, QVC score with shoppers in US

NEW YORK: Amazon, QVC and Apple have the most popular ecommerce sites among US consumers, new research has revealed.

Drawing on a survey of 21,000 online shoppers concerning 100 major platforms, ForeSee, the insights provider, found average satisfaction rating stood at 78 points for the third year in a row.

Amazon, an early category pioneer, led the charts on a total of 89 points, an improvement of three points when compared with similar analysis published in 2011, thus retaining top spot.

"We remain heads-down focused on driving a better customer experience through price, selection and convenience," Thomas Szkutak, Amazon's chief financial officer, said on its last conference call.

"We believe putting customers first is the only reliable way to create lasting value for shareholders."

QVC.com, the shopping network's website, was second on 85 points, a gain of one point. Liberty Interactive, its owner, recently bought Send the Trend, an ecommerce beauty platform tailoring products to individual buyer tastes.

"We expect to take the products, the categories, the features and technologies that are successful and roll them out on QVC.com," Claire Watts, CEO of QVC US, said.

Third place went to Apple's online store, accruing an extra five points, to 85 points overall. Keurig, which makes coffee machines, followed with 84 points, ahead of Avon, the cosmetics group, on 83 points.

According to the study, very satisfied website visitors – with ratings topping 80 points – were 72% more likely to buy online. The probability they would recommend a retailer also beat the norm by 69%.

Elsewhere, the chance of these customers buying from the same vendor next time leapt 67%, brand commitment rates were 66% stronger, return visits surged 58% and offline purchase rates rose 56%.

More broadly, 36 of the top 100 retailers surpassed what ForeSee defined as the "threshold of excellence" – or registering at least 80 points. This figure was eight points higher than last year.

"We're measuring the biggest players in the game, and they just keep getting better and better," said Larry Freed, the CEO of ForeSee. "If there's a negative spin to these positive trends, it is that this puts even more pressure on all other e-retailers to keep up or catch up."

Data sourced from ForeSee; additional content by Warc staff10 May 2012

Consumer spending falls in UK

LONDON: Consumer spending levels are continuing to decline in the UK, reflecting the challenges facing the country's economy.

According to a new study from Visa Europe, the financial services group, expenditure rates fell by 1.9% in April on a monthly basis, and by 4.3% compared with 12 months earlier.

"April saw a surprisingly large drop in consumer spending," said Steve Perry, commercial director at Visa Europe.

"Spending in March was artificially inflated by fuel panic buying which masked an underlying trend of weak consumer confidence ... The Index data reflects the fact the UK economy has entered a technical recession."

More specifically, "face-to-face" expenditure fell by 6.9% year on year in April 2012, not least as a result of poor weather, and a sales spike a year earlier because of the royal wedding.

The internet also witnessed a modest 0.8% slide on an annual basis, and mail order and telephone figures contracted by 6.6% during the same timeframe.

Among the categories which were hit hardest by the slump was food, beverages and tobacco, down by 8.3%. Elsewhere, clothing and footwear registered an 8.1% dip.

Household goods, however, endured the greatest single decrease, off by 9.6%, with transport and communications experiencing a 4.4% decline.

Conditions were rather more favourable for hotels and restaurants, where totals improved by 3.3%, while recreation and culture logged a 0.9% rise.

Despite this, Chris Williamson, chief economist at Markit, which helped compile the study, argued that the longer term picture is still adverse due to high unemployment, low pay growth and strong inflation.

"Spending in April showed one of the largest monthly falls seen since the height of the financial crisis in early 2009," he said.

"The underlying trend in the spending data clearly remain weak, and will raise concerns that the economy has started the second quarter on a worse footing than the first quarter."

Data sourced from Visa Europe; additional content by Warc staff9 May 2012

Reckitt targets India growth

NEW DELHI: Reckitt Benckiser, the healthcare to homecare group, is hoping to double the size of its business in India, which would make the country one of the firm's most valuable markets.

India has been named among Reckitt's 16 global "power markets" expected to drive future growth, a list also housing the US, UK, South Africa, Russia, China and Brazil.

"My aim and vision is that India should become the single biggest market in the next three-to-five years for Reckitt Benckiser in revenue," Chander Mohan Sethi, Reckitt's senior vice president, Asia Pacific, told the Press Trust of India.

"I know that it is not going to be easy to compete with markets like the US, but we will do it on the back of innovation and investment on building our brands."

A key source of Reckitt's optimism about India's prospects is the rising affluence of shoppers and the expanding number of consumer households, which is set to increase from 50m to 200m.

To position itself most effectively for growth, the parent of Dettol and Veet has decided to focus on the health, hygiene and homecare categories, largely in that order.

As a demonstration of this, it paid £460m to buy Paras, an Indian pharma company which owns D'Cold, a popular cold and flu remedy and Moov, a topical analgesic pain ointment.

"It was primarily a product strategy, but it also gives us synergy on the channel front. The primary reason for purchase was the portfolio; the secondary synergy benefit is that we are also more focused on the health channel now," said Sethi.

During the past seven years or so, the UK-based firm has invested significantly in India, with funds allocated to enhancing manufacturing and R&D facilities, as well as to strengthening its brands.

Reckitt's revenues, including those from Paras, stand at around £400m per year in India, a total that has been rising by 18% per year in the last decade, a figure now due to reach 20%.

"The expectation from India is that it will be in the top two or three fastest-growing countries for the group. Therefore, the contribution from India should double in terms of size," Sethi said.

"Today, India is the seventh or eighth largest growth market for the group; it will definitely be in the top five in three-to-five years."

Data sourced from Economic Times; additional content by Warc staff9 May 2012

Luxury sales to rise

ROME: Sales of luxury goods are expected to grow by over 5% a year worldwide in the period to 2014, but brand owners must reflect changing tastes and demographics, according to a new study.

Altagamma, the trade body, and Bain & Company, the consultancy, reported that category revenues rose by 10%, to €191bn, in 2011, after a 13% jump in 2010, when figures hit €173bn.

Looking ahead, it was predicted that sales would grow in the 6–7% range in 2012, thus bettering €200bn. An uptick of 7–8% was then slated for 2013, as total returns surpass €216bn.

The pace of expansion was pegged to be in the 8–10% bracket for 2014, meaning purchase levels of exclusive products should reach €235bn at minimum by this date.

Some trends driving this process were argued to include the "feminisation of men" and "male-isation" of women, a "casualisation" of luxury and the arrival of "bigger money", or very affluent, buyers.

"Consumers' insatiable chase for quality and craftsmanship, and for the use of high-end materials, has pushed many brands to focus on their top offer rather than the entry level one," the study added.

As a corollary, logos are "no longer" the only way through which brands can achieve distinctiveness, with unique design, materials and personalisation all gaining in popularity.

More broadly, manufacturers need to serve ageing shoppers in Europe, Japan and the US as well as a younger target group in Asia and other emerging markets, which already yield 30% of sales.

Indeed, demand in China will improve from some €12.9bn in 2011 to at least €15bn, and possibly €16bn, in 2012, as buyers in lower tier cities and online offset "flattening" like-for-like growth.

India is at a more nascent stage, and could be worth €1.2bn in 2012, versus €1bn in 2011. Its fledgling infrastructure and limitations on foreign direct investment have been obstacles, but the country is one of the next decade's "largest opportunities".

Growth rates in Europe are anticipated to be between 2% and 4% in 2012, standing at 5% and 7% for the Americas. Asia Pacific, not including China or Japan, may see a lift of 14% to 16%. Japan, however, will most likely be static.

In terms of market share, Asia, excluding Japan, should enjoy an increase from 19% in 2011 to 27% in 2014. By contrast, the Americas will witness a decline from 30% to 27%.

Elsewhere, Europe is set to endure a slide from 36% to 32%, while Japan experiences a contraction from 10% to 8% during the same timeframe, the study suggested.

Data sourced from Altagamma; additional content by Warc staff9 May 2012

Mobile commerce slow to make progress

NEW YORK: Singapore, Canada and the US are the markets currently offering the greatest potential for mobile commerce, but even here progress remains nascent, a report by MasterCard has argued.

The financial services group polled 1,000 people in each of 34 countries to assess their "readiness" for m-commerce. It also looked at the related digital, financial services, telecoms, infrastructural and regulatory arenas in all of the featured nations.

Singapore headed the charts overall with an index reading of 45.6 points on a 100-point scale, a modest figure given MasterCard stated that 60 points or more was required to reach a real "inflection point".

Canada occupied second position on 42 points, and the US generated 41.5 points. Kenya was named as the possible "standout", claiming third place on 40.4 points.

South Korea followed with 39.7 points, bettering Japan's 39.6 points. The UAE logged 37.9 points, topping the 37.5 points secured by Saudi Arabia and the UK. China made up the top ten on 36.5 points.

The average rating stood at 33.2 points, with Indonesia below this benchmark on 22.4 points, as was Italy on 25.5 points, Hungary on 27 points and Mexico on 27.7 points.

"Technology infrastructure, a responsive regulatory environment and a robust economy are table stakes for the advancement of mobile payments," Theodore Iacobuzio, MasterCard Worldwide's vice president for global insights, said. "The necessary conditions are consumer readiness and industry integration."

Kenya led the "consumer readiness" rankings, as 89% of people were familiar with mobile payments, while 68% had used their phone to complete peer-to-peer transactions.

A further 22% had already bought goods and services via this route and 9% paid for something at a point of sale in the same way, with all of these totals considerably ahead of the norm.

The US was regarded as presenting the strongest environment for future growth as average per capita household expenditure comes in at $33,000, versus an international figure of $11,005.

Singapore had both the most favourable regulatory climate and infrastructural arrangements, enjoying 100% mobile coverage, 70% internet penetration and 68% mobile penetration.

Elsewhere, Japan's financial services industry was seen as best placed to move forward, as shoppers hold an average of 14.98 payment cards per person, and 91% of providers received strong scores for treating customers well.

Data sourced from MasterCard; additional content by Warc staff9 May 2012

Chinese web firms aim to expand abroad

BEIJING: Companies like UC Mobile, NetQin Mobile and the Hainan Tianya Online Network Tech Co are seeking to blaze a trail for Chinese internet firms overseas, but some major challenges remain.

UC Mobile, which has designed a web browser for wireless devices, intends to invest $5m in India this year, and aims to take the number one position in the category locally by 2015, with 100m users.

Since 2010, UC Mobile has accrued a 20% market share in India, leaving it behind only Opera in its sector. The company also plans to open an office in Silicon Valley in 2012.

"I firmly believe that it's time for Chinese internet companies to expand overseas. UC Mobile has demonstrated that Chinese enterprises have the ability to achieve global success, similar to that of giants such as Facebook and Google," Yu Yongfu, the CEO of UC Mobile, told the China Daily.

NetQin Mobile, a mobile security specialist, now yields 45% of its sales from outside China, an amount due to top 50% in 2012. The organisation also already has 5m users in the US, its fastest-growing market.

Henry Lin, NetQin Mobile's CEO, said: "We expect to gain the top spot in the US smartphone security market in less than three years."

Elsewhere, the Hainan Tianya Online Network Tech Co, which owns Tianya.cn, one of the most popular internet forums in China, currently has units in Singapore and Silicon Valley.

These centres are tasked with increasing both its user and advertiser bases in Asia and North America, and Hainan Tianya secured 20% of traffic from foreign nations last year.

Richard Ji, managing director of Morgan Stanley Asia, revealed Chinese internet firms normally have a lifespan of three to five years, and typically lack rigour when making international plans.

"I don't say that Chinese internet companies cannot expand overseas, but I hope they can do it in a selective and systematic manner. I don't think any company can be a global champion if it performs poorly in its home market," he said.

Many of China's main online operators, such as Tencent and Alibaba, have only made limited steps abroad. Baidu, the search engine, launched a Japanese site in 2009 with mixed results, and is targeting areas like Brazil, Thailand and Vietnam.

Low brand awareness and the need to create truly differentiated services from existing platforms are among the primary obstacles for Chinese players, although they do possess certain strengths.

"The main advantages for Chinese companies when expanding overseas are that they have engineering resources and a large domestic market where they can roll out products. Plus, they are well capitalized and have cash," Duncan Clark, chairman of BDA China, the consultancy, said.

"[However,] Western perceptions, such as issues over censorship or privacy, are going to be difficult for them to overcome," he added. "And more important, I think it's just an HR challenge - do they have the people who can operate well internationally and can they communicate well with foreigners?"

Data sourced from China Daily; additional content by Warc staff9 May 2012

P&G builds "always-on" model

CINCINNATI: Procter & Gamble, the FMCG giant, is seeking to build an "always-on" business culture reflecting major trends like the rise of big data and the need for rapid innovation.

Filippo Passerini, the company's president of global business services and CIO, told the Wall Street Journal that several "megatrends" among shoppers demand an increasingly flexible approach.

"Consumers and users want one-on-one connections to any service or product they interact with, so we have to respond. This is thoroughly changing the way we operate – the always-on, instant nature of interaction today," he said.

"We look at those megatrends and forces to see which ones will truly impact our business. Then we go [and] look at what strategies we can devise to take advantage of those trends. The final step is evaluating which technologies can enable those strategies."

One such tactic P&G has pursued is making greater use of digital tools – such as store and packaging mock-ups – during the innovation process and focus groups to increase its speed to market.

Similarly, the manufacturer of Tide and Pampers has created virtual "cockpits" providing staff with a single location to access all the data they need, covering everything from market share to consumer insights.

"This transforms the way the business performs because it creates what I call 'information democracy,'" said Passerini. "There are no more layers. The discussions we are having are much more robust."

Looking ahead over the next three to five years, Passerini predicted the major differentiator for successful brand owners would be the ability to foresee emergent shifts in the market.

"It is so critical to run the business in real-time. The ability to analyse big data – massive quantities of data – is important," Passerini said. "In business intelligence, as we speak, we feel we are two or three years – perhaps more – ahead of anyone else."

When assessing the competitive landscape, Passerini argued P&G's rivals did not have any technological advantages that worried him; the problem was creating business models that were fit for purpose.

More specifically, he suggested the pattern from 30 years ago, where "the big fish eats the small fish" due to size and scale, had first been replaced by the "fast fish eats the slow fish", while now the key is to be "the fish who knew how to network".

"We created this mantra of 'bring the outside in,'" he said. "Whether it's for scale or new technologies, it's essential to stay open-minded about what is possible – and not fall into the temptation that we have it all figured out."

As such, P&G has allied with firms like Cisco, Accenture and Infosys to access different skills and capabilities. "They give us the best talent they have to keep us ahead," Passerini said.

Data sourced from Wall Street Journal; additional content by Warc staff9 May 2012

UK retailers face further tests

LONDON: Retailers in the UK are likely to face further challenges going forward, as the number of bricks and mortar chains entering administration continues to grow.

Figures from the Insolvency Service revealed the amount of retailers – including wholesalers and automotive dealerships – hiring administrators reached 135 in the first quarter of 2012.

This marked an increase from 79 in the final quarter of last year, or an uptick of 70%. The situation was more severe for the "retail trade" segment, or actual stores, where appointments rose by 180% to 67.

Peacocks, the apparel chain, La Senza, the lingerie group, and Blacks, the outdoor specialist, were among the well-known operators to have suffered this fate in 2012 thus far.

Richard Fleming, UK head of restructuring at KPMG, the business services firm, said a long term "barrage of negative economic pressures", from online competition to the recession, had made a huge impression.

"Our own pipeline of work suggests the High Street and the many companies which service the retail industry are running out of options, with administration – the option of last resort – now inevitable for some," he added.

In an indication of the specific difficulties pressurising the UK retail sector, the hotel category saw administration appointments fall by 50% quarter on quarter to 42, with transport down by 24% to 25.

Last month, the regular future-facing index of "retail health" published by KPMG and Ipsos, the research company, also stood at 77 points for the second quarter of 2012.

This reading constituted an all time low having declined by two points from the previous quarter, and was five points behind the total logged at the height of the financial crisis in 2009.

"Following unprecedented levels of promotions and discounts in quarter four of 2011 which had a severely detrimental impact on retailer margins, many businesses now recognise that this is not a sustainable strategy," said Tim Denison, director of retail intelligence at Ipsos Retail Performance.

"Rather than continuing to discount and offer promotions to the same degree in 2012, manufacturers and retailers decided to back the strength of their brands."

However, recent data gathered by Columino, the insights provider, showed 60% of shoppers intend to trim their retail spending, and another 15% hope to make drastic reductions, posing a major obstacle to any recovery.

"Only a very small percentage said they were planning on spending more," said Neil Saunders, Columino's managing director.

Data sourced from KPMG; additional content by Warc staff8 May 2012

Australian online adspend rises

SYDNEY: Online advertising expenditure is expected to pass A$3bn for the first time in Australia this year, after recording impressive growth during the opening quarter of 2012.

The IAB Australia and PricewaterhouseCoopers reported that internet ad revenues rose by 19% on an annual basis in Q1 to A$713m, with a similar pace of acceleration anticipated going forward.

"There is no doubt that online advertising in on track to surpass $3bn and 20% share of all advertising this calendar year," said Paul Fisher, the chief executive of IAB Australia.

"It's quite possible that we'll reach that milestone this financial year thanks to increased consumer confidence sparked by further interest rate cuts, which we believe will support continued growth in online advertising in key sectors."

In the first quarter, paid search and directories collectively registered a 21.4% leap in ad sales, hitting A$395.7m and claiming 55.5% of the market as a whole.

Classifieds also witnessed a meaningful hardening in demand, up by 13% and securing A$165.3m as a result.

Elsewhere, display logged its fastest growth since 2008, enjoying an 18% jump compared with the same period last year, to some A$154m.

Within the overall display figures, email advertising experienced a contraction from A$9.6m to A$7m, whereas video saw a modest improvement from A$11m to A$11.6m.

Cost per thousand remains the primary form of pricing for general display ads, supplying 74% of expenditure, while direct response provided 26% of returns.

Financial services, automotive and real estate made up the top three categories where display was concerned, delivering 41.6% of sales, as computers and communications fell out of this group.

Real estate, recruitment and automotive assumed the equivalent positions when it came to classifieds, a situation exactly reflecting the previous quarter.

"The retail and government sector online spend continues to flat-line which is surprising considering both are facing tough marketing and communications conditions," Fisher added.

"There is a real opportunity for these sectors to invest their advertising budgets online where they will reach, engage and influence their audiences most effectively."

Data sourced from IAB Australia; additional content by Warc staff8 May 2012

Brands boost German firms

BERLIN: Companies in Germany generate almost €900bn from branded goods and services a year, a figure that could rise further as shoppers place a heightened emphasis on product safety and quality.

McKinsey, the consultancy, and Markenverband, the trade body, reported that firms headquartered in the country yielded €894bn each year from branded products.

This amount is equivalent to 80% of Germany's total exports or the combined annual revenues delivered by the country's retail, transport, hospitality, information and communications industries.

Manufacturers of branded goods claimed €457bn per year, with financial services on €177bn, transport and telecoms providers on €134bn, energy suppliers on €98bn, and the publishing, film and radio sectors on €28bn.

Based on a survey of senior executives, the analysis also revealed that 78% of domestic corporations had only been "somewhat" affected by the economic crisis or not impacted at all.

The finding that 84% of organisations had made limited or no cutbacks to their communications spending was said to have favourably shaped this trend, an argument equally applicable to the decision of 93% to follow the same route for innovation.

Moreover, 61% of featured companies stated they had resisted lowering their prices even though the fiscal climate had become increasingly challenging.

Indeed, 52% of respondents agreed that price now held a more central role in the purchase process, measured against 54% in an equivalent study from 2008 and 46% in 2006.

Looking forward, however, just 5% of enterprises expected to prioritise this area in their future communications, versus 34% giving it a "low" level of importance and 61% not planning to mention it.

By contrast, in 2008, a more modest 48% of operators ignored the matter altogether, whereas 11% gave it an integral position in their marketing messages and 41% afforded it at least some importance.

A separate poll of consumers found 68% believed product safety and security would soon gain greater importance in shaping their habits, with trust and responsibility receiving 50% apiece on this metric.

Innovation posted 43% here, beating values like "solidarity" on 40%, "power" on 33%, "luxury" on 23% and "adventure" on 22%.

"The new customer desire for security is advantageous for brands – after all, quality is one of the key arguments for purchasing these products," the study concluded.

Data sourced from McKinsey; additional content by Warc staff8 May 2012

Ad trends mixed for Facebook

NEW YORK: Facebook, the social network, is seeing mixed trends regarding both the prices and perceived effectiveness of its advertising services.

Marin Software, the digital marketing firm, has just revealed that the charges for premium Facebook ads like "sponsored stories" rose by 26% during the last year, when the cost-per-click for more generic formats fell by the same amount.

TBG Digital, which buys Facebook ads for 235 firms, also found the price of reaching 1,000 of the site's users increased by 41% year on year in Q1 2012, but clickthrough levels dropped by 6% in its top five markets.

Data from Facebook showed its overall ad revenues climbed by 37% on an annual basis to $872m in the opening three months of 2012, although this amount constituted a 7.5% dip from the preceding quarter.

"The company's re-orientation around large brands and away from smaller ones may be the driver of the difference," Brian Wieser, an analyst at Pivotal Research, said, the Financial Times reported.

In a bid to enhance its credentials among major brand owners, Facebook – which boasts 900m active members – has allied with comScore and Nielsen, the measurement specialists. Some concerns, however, remain.

"When you have an audience that sticky and big you'll figure it out," said Jed Williams, an analyst at BIA Kelsey. "If you're Facebook, you have to figure it out in a hurry."

Michael Sprague, Kia Motors North America's vice president of marketing, reported that his firm had partnered with Facebook to gain a better grasp of how successful its ads are.

"Being on Facebook sends a message," he said. "Consumers they say 'Facebook is working with Kia, I like Facebook ergo I like Kia.' That's what we are hoping for.

"The question with Facebook and many of the social media sites is, 'What are we getting for our dollars?'" he said. "[It is unclear if] a consumer sees my ad, and does that ultimately lead to a new vehicle sale?"

Ford, another automaker, stated that using Facebook ads for its 2011 Explorer boosted shopper activity by 104%, but believes comparing the value of these efforts to other channels is difficult.

"The number one trusted source of information for consumers is recommendations from friends and family," said Charles Zinkowski, a Ford spokesman. "Facebook provides a reliable platform to leverage that insight at scale."

More broadly, the speed of Facebook's development, in terms of user habits and the services it provides, is posing some problems for marketers attempting to keep up.

"Sometimes it is a bit unsettling the pace at which they are changing things," said Maxime Kouchnir, vice president of marketing at Pernod Ricard USA, responsible for the Absolut vodka brand.

Data sourced from Financial Times/Wall Street Journal; additional content by Warc staff8 May 2012

Lenovo bets on new products

BEIJING: Lenovo, the Chinese IT group, is aiming to greatly expand its portfolio, targeting categories like smartphones and tablets as a means of offsetting a moderation in demand for personal computers.

The firm plans to open a new R&D base in Wuhan, to be operational by October 2013, and charged with creating a wide range of original products, including wireless devices and PCs, its current core business.

More specifically, the organisation is "accelerating development" in smartphones, tablets and other mobile internet devices, said Yang Yuanqing, its chief executive, with apps also now becoming the subject of heightened emphasis.

"We are aggressively moving forward into the 'PC Plus' era," he added. "We're determined to firmly seize the tremendous opportunities for innovation in this market."

As part of the broader goal to establish an "end-to-end product capability", the Wuhan site is also tasked with cutting innovation lead times, optimising Lenovo's supply chain and strengthening its in-house marketing systems.

Overall, the company will invest RMB5bn in this R&D centre in the coming five years. It expects the revenues yielded from its activities to hit RMB10bn in 2014 and RMB50bn in the next five years.

Figures from IDC, the insights provider, showed that Lenovo's worldwide PC shipments rose by 44% in the first quarter of 2012, a 13.4% market share.

This could be compared with a 3.2% uptick recorded by Hewlett-Packard, the category leader, which claimed an 18% share. However, the entire sector saw a modest 2.3% increase, partly due to competition from tablets.

When discussing smartphones, Lenovo held 9.1% of the Chinese market in the final quarter of 2011, measured against some 1.8% in the preceding three months, making it the fifth largest player, also according to IDC.

"Lenovo's building of the R&D centre seems to indicate they are serious about this market," said Teck Zhung Wong, an IDC analyst. "Once they have success in China, this can make their expansion into other markets smoother."

Turning to tablets, Lenovo took a 1.6% share of shipments in the final quarter of last year, versus 54.7% for Apple, although the former company's slates were available in a limited number of nations outside China.

In further demonstration of a commitment to enhancing its portfolio, Lenovo launched a Mobile Internet Digital group in 2011, focusing on wireless devices and smart TV sets that can connect to such gadgets, and to the web.

Data sourced from Lenovo, Wall Street Journal, PC World; additional content by Warc staff8 May 2012

Top firms focus on R&D

NEW YORK: Innovation, a focus on customer insights and encouraging collaboration are among the core qualities of the firms boasting the best leadership and delivering strong shareholder returns, a study has found.

The Hay Group, the consultancy, polled 7,000 executives from 2,300 organisations globally, who named General Electric, the conglomerate, as the company with the most effective management team.

It was followed in the rankings by Procter & Gamble, the FMCG manufacturer, IBM, the business services provider, Microsoft, the IT specialist, and Coca-Cola, the soft drinks expert.

McDonald's, the fast food chain, Accenture, the consultancy, Wal-Mart, the retailer, Johnson & Johnson, the healthcare company, and Unilever, from the consumer goods category, completed the top ten.

Over a ten year period, the top 20 operators – also housing Toyota, the carmaker, Nestlé, the packaged food group, and Shell, the energy giant – logged a 5.4% shareholder return, versus 2.9% for the S&P 500 index of major corporations.

The pre-eminent players did exhibit certain shared characteristics. For example, 94% of this cohort ran "unprofitable projects to try new things", beating the 49% posted by all other firms on this metric.

Figures here reached 90% and 47% respectively when it came to staff spending time discussing customers' needs, essentially matching scores for supporting employee learning in areas outside their main competencies.

Additional traits shared by the best-regarded enterprises included taking a dynamic approach to problem solving, balancing local and international talent among senior leadership, and recruiting cultural minorities.

"Leadership clarifies strategies and customer needs; elicits new insights from diverse, collaborative teams; and earns the focused effort and dedication that innovation requires," the Hay Group said. "Leadership creates a climate in which innovation is the expected norm, not the miraculous exception."

As further proof, 90% of the top 20 businesses had processes in place letting individuals circumvent the usual chain of command if they had an "excellent idea", compared with 63% for other firms.

Similarly, all of the top-ranked organisations provided "structured opportunities" for younger staff to promote creative ideas, falling to 68% for their less effective peers.

Moreover, senior executives from all of the 20 premier companies "celebrated" research and development successes, bettering the 49% recorded elsewhere.

Data sourced from The Hay Group; additional content by Warc staff8 May 2012

CORRECTED: China Search International targets Australia

Warc published a story on Monday, 7 May 2012 reporting that Baidu was seeking to enhance its presence in Australia. We have since received clarification from Baidu that the source material for this piece was inaccurate.

The story should have reported that China Search International, a search marketing reseller operating in Taiwan, Hong Kong, Singapore and Macau under trademark licence from Baidu, has opened an office in Sydney.

However, Baidu is not affiliated with, and does not own any stake in, China Search International, and is not itself expanding into Australia. We are pleased to make this correction.

Data sourced from Baidu/ZDNet Asia/Warc; additional content by Warc staff7 May 2012

QR codes fail to connect

COLOGNE: German consumers are far more likely than their UK counterparts to scan QR codes, although take-up rates for these tools remain low in both countries.

A new report from market research firm SKOPOS shows that 24% of German mobile phone users have accessed web content via one of the codes in the past, compared to 12% of UK users.

The firm also found that only 4% of German respondents regularly used QR codes, and that this cohort tended to be male and under 40 years old.

Lack of awareness and engaging content emerged as major barriers to future growth for the services, with 24% of Britons who had scanned a QR code saying they had a "poor" experience, and 50% of the total sample saying they had never heard of the codes.

Speaking to Internet Retailing, Darren Mark Noyce, chief consultant at SKOPOS, said that significant investment in QR codes by German brand owners over the past two years helped to explain the nation's outperformance in usage rates.

"QR codes are most likely to be used when consumers know exactly what information they will receive, such as in timetables, nutrition information and recipes for food that downloads or specific product information," he added.

"Scanning a mobile QR code should be a shortcut to valued content or offers, not an effort, nor a disappointment."

A recent global report conducted by business services firm Oracle indicated that 14% of mobile subscribers had previously scanned a QR code with their phone.

Data sourced from SKOPOS/Internet Retailing; additional content by Warc staff7 May 2012

African internet trends vary

CAPE TOWN: Fixed-line connections are still the primary source of internet access in Africa, despite the continent's high rates of mobile adoption.

Analysis of Google data from News 24 indicates that a total of 51% of Africans in five markets measured – Ghana, Kenya, Nigeria, Senegal and South Africa – have now used the internet at least once. Of this total, 31% went online via a computer, 10% used a mobile, and the remainder (11%) used both devices.

Computer users were found to go online slightly more frequently, with 15% using the service at least once a day, compared to 12% of the mobile web population.

Significant regional trends emerged in terms of platform choice, with 20% of South Africans using the mobile web, and the same number using computers. Mobile web use was much rarer in Nigeria, on 8% compared to computers' 32%, while the gap was widest of all in Senegal, with 2% for the mobile web and 47% for fixed line connections.

Varying levels of development for web infrastructure, as well as a general disparity in the availability of mobile internet services, is a major factor behind these national differences.

But the Google figures also indicate a shared scepticism among many African consumers regarding web services, with common barriers to going online among non-users including lack of knowledge about the services, cited by 42% of respondents, lack of access (41%) and lack of interest or time (37%).

The dominance of fixed-line internet come despite the extremely rapid growth rates marked by mobile in Africa over recent years.

Annual data released by mobile trade body the GSMA forecast that mobile connections will rise from 649m at the end of 2011 to 735m in 2012, against the continent's total population of around 1bn.

However, the market remains overwhelmingly dominated by feature phones rather than web-enabled smartphones. In all, 96% of the African mobile population used pre-paid connections last year.

Looking to the future, GSMA argued that the mobile web would make progress over the years ahead, with the number of 4G connections rising to 2.5m in South Africa and 1.1m in Nigeria by 2015.

Data sourced from News 24/Google/Warc; additional content by Warc staff7 May 2012

Service key to social media

NEW YORK: The quality of customer service offered by US brands on social media strongly influences buying habits, research from American Express has suggested.

A new report from the company indicates that the average person using social media to get some kind of customer service is subsequently willing to spend +21% extra on a brand if the service is "excellent".

But this premium drops to +11% among those who had an excellent experience outside of the networks.

This behavioural gap can also be seen among those consumers offered poor customer service. American Express found that 83% of social media customer service users have walked away from a purchase in the past year after a bad experience in this area, compared to just 49% of non-users.

Jim Bush, executive vice president at the company's World Service unit, said: "Ultimately, getting service right with these social media savvy consumers can help a business grow.

"Delivering outstanding service creates impassioned advocates and can serve as a powerful marketing weapon for companies."

Separate findings from the American Express report also illustrated the potential for spreading positive word-of-mouth via online social networks.

In all, the typical social media customer service user will tell 42 others about a good experience, and 53 about a bad experience. These totals drop to nine and 17 respectively among non-users.

Sharing of customer service stories is also on the rise among the general population, with the typical American telling 15 people about positive interactions. When American Express conducted the same poll last year, this total reached just nine people.

At the same time, concerns over the quality of customer service are also on the rise, with almost a third (32%) of respondents saying they believe brands are not prioritising service in the same way as they used to. Last year, just 26% said the same.

Rudeness of staff was also the most common customer service "gripe" among consumers, cited by 33% of those polled. The feeling that brand representatives were "passing the buck" was second on 26%.

Data sourced from American Express; additional content by Warc staff7 May 2012

Indian brands go mobile

MUMBAI: Indian brand owners are raising their mobile ad budgets, with firms including Hindustan Unilever and Bharti Airtel focusing on feature phones to achieve mass reach.

Livemint reports that the subcontinent's advertisers are being encouraged to launch mobile spots due to the devices' high penetration and consumer engagement rates.

Recent data from the Internet & Mobile Association of India (IAMAI) indicates that adspend on the mobile channel rose by 17% over the year to March 2012, with the market valued at around 105 crores ($19.6bn) over the year. This total is anticipated to rise to 144 crores by 2013.

Separate figures from IAMAI show that around 900m Indians, around 75% of the population, have access to a mobile phone. Of this total, around 15% go online via mobile devices.

Data sourced from Livemint/IAMAI; additional content by Warc staff7 May 2012

TV still king in US

NEW YORK: Traditional TV remains by far the most-used video channel in the US, new figures from Nielsen, the market research firm, have shown.

According to the company's latest Cross-Platform Report, 284.4m users watched an average of 33 hours of TV per week during the last three months of 2011. This is a small drop from the 289.3m who did the same during the same period the previous year.

Adoption of time-shifted services and high-end TV platforms have helped to defend TV's position, with the number of HDTV-owning households rising just over 8 million to 80.2m over the year.

Data sourced from Nielsen; additional content by Warc staff7 May 2012