2019 is shaping up to be a very special year for Alimama.
Alibaba turns 20. Jack Ma retired from Alibaba’s executive chairman, officially handing over the reins of the company to Daniel Zhang. In Sept 2019, Alimama announced its 'new marketing strategy for the digital age’ at the first Alimama Marketing Summit.
What motivated Ailmama’s ‘transformation’? What kinds of challenges does Alimama face in 2019—and how does it position itself in an ever-evolving marketing landscape? Campaign Asia speaks with Yvonne Chang, president of Alimama, to understand what she thinks of Alimama’s recent evolution.
The face behind Alimama’s transformation
In November 26, 2018, Zhang, Alibaba’s CEO at the time, announced a revamp of the senior management and company structure. Yvonne Chang became the president of Alimama; there was also a merger of the company’s e-commerce and branding depts. These changes signified that Alimama, the digital marketing arm of Alibaba, has entered a new era.
Chang is far from an ‘Ali-newbie’. In 2008, she served as Alibaba Group VP, leading the search centre for Taobao. In 2009, she left the company, only to return nine years later as the President of Alimama.
Why has Chang returned to Alimama? She gives several reasons. First, Chang has always believed in Alibaba’s philosophy. Second, Alimama possesses the resources to expand its business. Third, and perhaps most importantly, she realises that the e-commerce and advertising departments still exist in silos in many western companies. As an e-commerce and advertising specialist, Chang believes Alimama has both the capability and expertise to integrate the two. “You can achieve a lot in a short period of time at Alimama,” she says.
Chang is sensitive to the changes, within Alibaba and across the industry, in the last decade. As China’s data marketing and e-commerce industries mature, Chinese consumers are also getting more and more active. Alibaba has long evolved from its e-commerce roots to an integrated economy comprising many different parts. Alimama’s technological evolution has also cemented it as one of the world’s premier digital marketing platform. Whichever way you look at it, it appears that Alimama is ripe for transformation.
One impetus behind Alimama’s transformation is the ‘Alibaba New Retail’ philosophy and ‘Alibaba Business Operating System’.
“Today, Alimama is also evolving with the times. We’re now more consumer-oriented, and our team is constantly exploring ways to add value to the brand in the long-run. It means taking drastically different approaches of defining our products and building our service systems.” Daniel Zhang, executive chairman and chief executive officer of Alibaba, said this in the private C-Level meeting at the summit.
Speaking of Alimama’s transformation, Chang notes that in the past, Alimama’s focus on lower funnel marketing. Now, the focus has been shifted to consumer operation, which is the biggest asset for serving brands and merchants , and the key point is the full-funnel marketing platform.
“For our clients, Alimama’s value doesn’t just lie in managing sales volumes but also to raise consumers’ awareness and interest. The idea is to leverage Alimama’s resources to open up more opportunities for our clients.”
She also notes that the shift in business focus is due to the rise of individualism on one hand, and the anxiety of traffic on the other. According to Chang, Alimama’s transformation is a continuation of Uni Marketing, the strategy put forward by Chris Tung, Alibaba’s CMO and former president of Alimama. By incorporating elements from the ‘Ali-ecosystem’, Alimama has evolved far beyond its online ad exchange roots.
How should Alimama position itself in this new era?
Currently, Alimama’s biggest leverage is Alibaba. Not only is Alibaba the world’s biggest e-commerce platform, it also has a retail media matrix . What does this mean for Alimama? “We have the most commercial data pertaining to consumer-brand interactions,” says Chang. And this, says Alimama’s president, is what differs a retail media platform from social media or content platforms. With retail media, you can predict consumer demands, which could more effectively lead to the ultimate objective.: sales. “Alimama is going to capitalise on this opportunity,” she says.
On the other hand, brand recognition is still relatively weak in certain Chinese markets. A key challenge for western brands entering the Chinese market is: what is the most effective way of speaking to the Chinese audience? Western brands that have been successful in the west might fail miserably in China. For many digital natives in China, brand loyalty means very little, in fact, these consumers are often more willing to spend on a certain brand or product if it is ‘hot’ on social media. This shift in consumer mentality has dealt a huge blow to heritage brands.
Beneath these market shifts is data. ‘Data Decides Decision’. The way brands can make use of data to better communicate with their target audiences. The way that data can shorten trial periods, resulting in higher KPIs.
Having completed the transformation from an online ad exchange to a consumer-centric digital marketing company, Alimama’s next task is to ‘open up’—to unplug barriers between different products, but also to open up different channels of communication. The collaboration between TaoBao and Youku is a case in point. In essence, Alimama is breaking down the wall between upper and lower funnel marketing, says Chang, with the view to target consumers with the right product using the right channel at the right time.
One question remains though: how does Alimama position itself after the transformation?
“Alimama’s main purpose is to provide a platform--to build an ecosystem with the tools and resources. But it is ultimately the agency partners who are servicing the clients,” Chang notes. She emphasises that Alimama is open to working with agency partners to achieve win-win outcomes. “We’re providing a platform [for advertisers and brands to interact] .” She uses the analogy of Taobao, a platform serving consumers, but it is the brands who are doing the servicing. Similarly, the end user of Alimama are the brands, but it is the advertisers who are servicing them. Aside from its positioning as a platform, business growth is also very important to Alimama. As Zhang said during the private meeting at the Alimama Marketing Summit, “all B2B marketing are measured by whether they can help a business grow.” A company’s growth rate is the best marker of marketing success.
This was also the catalyst for the launch of the Alimama Purchase Intent Index. “The Index uses science to measure the relationship between ad spend and business growth,” noted Chang at the Alimama Marketing Summit. According to her, by allowing advertisers to better understand and influence consumers, the Index will have long-lasting implications for advertisers intent on improving their targeting.
Of ‘The New Six Values of The Alibaba Digital Economy’, ‘change is the only constant’ is undeniably Chang’s favourite. And indeed, ‘embracing change’ appears to be the best way to tackle challenges in a fast-changing digital marketing landscape. Alimama’s transformation officially marks the arrival of a new kind of content marketing in a data-driven era.
This article was originally published on Campaign China.