Jenny Chan 陳詠欣
Nov 18, 2016

Innovation starts with the letter 'C', not 'I'

CHINA INNOVATION 2016: A roundtable discussion co-hosted with Miaozhen last week touched on the sources of innovative ideas, the abilities of AI, the validity of data and whether consumers even know what they want.

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What is the main element of marketing innovation?

It may be imaging technology that is driving camera innovation, but it is consumer insight that drives marketing innovation, said Charo Sugano, assistant manager for communication planning and product marketing of the Image Communication Products department of Canon China.

"From our research on young people, we found that they still like real cameras, and not just smartphone cameras. That insight has opened up a new audience for us."

Similarly in the car industry, the post-85s and post-90s generations in China are the opinion leaders for Lexus, said Frankie Gu (顾一凡), the brand's head of digital marketing. They are making choices based on access to brand information and participation in brand communications, he added.

In the mainland market, Audi, Mercedes Benz and BMW are leading the luxury car segment, while Lexus is actually in the second tier, comparable with Jaguar and Land Rover. "The cars we manufacture will be available to consumers for many years, so it's important to listen to their feedback and meet their needs. We need our marketing strategy, creativity and digital technology applications to keep pace with the times."

In October last year, a Lexus ES campaign with Didi Chuxing was implemented based on consumer insight, after the brand found the post-85s and post-90s wanted urban transport with a 'sharing economy' concept. That campaign resulted in a lot of quality user-generated content and online interaction between brand and consumer, Gu said.

Is AI clever enough to be the engine for marketing?

It's all about researching how audiences, young or old, accept new media platforms to try and understand their behaviour so that we can make connections, said Major Lin (林明展), managing partner of OMD China.

"The main consideration is how to find connections next. I'm confident that AI is the next way," Lin said.

For Microsoft meanwhile, innovation comes from various angles, and one of them is artificial intelligence, said Shang Rong (商容), senior director of public affairs and operations at Microsoft China.

"We are in the AI era, and AI will create value for marketing," she said. "It is the hottest topic now. Ask yourself, is Tesla a car or an AI machine when we can 'call' for the car and 'train' the car? Our younger generation will live in a world whereby machines and humans will work as a team." 
 
But in terms of understanding humans better through AI, there is still a long way to go.

Durex tried to use Xiao Bing (小冰), Microsoft's AI chatbot, to answer questions about sex automatically as an experiment, but it wasn't successful. "Right now AI chatbots are only doing just that—chatting. It relaxes consumers with jokes," said Fay Zhou (赵霏), marketing director of Reckitt Benckiser China's sexual wellbeing division. "But when consumers want to ask hard questions about HIV for instance, Xiao Bing cannot answer them (yet)." 

Lofty data goals need validity of data to be addressed first

Everyone is concerned about the problem of money: how much money competitors spent on media and how much money we spent on average in the past, without much concern for the data behind it, said OMD's Lin.

From a practical point of view, a brand's problem is not about having no data, but having too much data, he said. "In addition to the BAT's data, they can get data from other media and payment companies such as UnionPay. They also have their own CRM and POS data to consider. We must have the ability to really find the story behind the data, and then use it to enhance media performance."

We also know that in China's environment, in many cases a lot of media investment becomes “invisible” as they are sunk in one platform. For example, Alimama (Alibaba's mar-tech unit) presents to clients a data report from its closed ecosystem, and does not open its system to third-party monitoring.

"This is a problem we have all encountered," said Lin, adding from personal experience that the BAT data giants in China are "so strong that it's very difficult to negotiate with them".

So this is why brands have been talking about setting up their own data management platforms, but it seems like many brands are not building their own "click streams", highlighted Lin.

From a trail of with monitoring codes put in ads on different sites, we can see where the user has been before he or she visited a site. "In fact you can make presumptions of up to four or five steps before he or she ultimately reached a site. Furthermore, you can see where the user went to after leaving your site, whether it is to view competitive products or to do further searches," Lin explained.

A complete click stream makes it intuitive to understand consumer behaviour and to decide the kind of ad frequency to then achieve the best conversion rate.

"I think real innovation is when there is a suitable tool to help with data collection, classification and management, and finally to integrate the understanding from all these into actual ad delivery and media plans."

Meanwhile, agencies and brands and third-party tracking companies should work together to give pressure to the BAT, he emphasised. 

Are we too dependent on traditional views of the consumer?

Brands tend to overly rely on what consumers tell them in order to try to innovate, but consumers don't always know what they want. We have to make judgments on what can possibly meet their unmet needs, said Albert Sim (沈思永), vice president of research and consulting at Miaozhen Systems.

"Maybe traditional research is not enough; we require that plus social data. Social data itself doesn't have enough depth, so the two methods complement each other." 

Durex's Zhou described how it has been "not very easy" to do traditional research on sexual wellbeing products, because people don't really want to reveal too much, understandably.

However, on ecommerce as well as social-networking sites, the brand can collect consumer feedback on their "real" experiences, as opposed to "shared" experiences revealed on their own accord in traditional focus groups. In such groups, participants are generally more open-minded and sexually-active, so their voices may skew towards one side of the user spectrum. This research method may then be misleading and not multi-faceted enough.

"Now, we are trying anonymous online panels, one to be more comprehensive; and two, to avoid embarrassing users. It has worked well so far," shared Zhou.

Nuo Hotel, which opened just a year ago on the pretext of being the pioneering made-in-China hotel brand, has hardly accumulated enough historical data about consumers, but that is actually an advantage as Cindy Zhu (朱潇潇), the hotel's director of marketing communications, can think about data on a clean slate.

"Have you ever thought about how you analyse your data?" she asked. "You come up with a portrait of your audience based on gender or online activity etc, but it's not that simple. We need a new way to understand consumers." 

Research, if too simplistic, may not always represent reality, stressed Lexus' Gu. "When you go to our dealerships and check the buyer database, only 60 percent of them are similar to the demographic portraits that our research presented," he pointed out.

For Durex as well, it's tough to trust even primary research sometimes, said Zhou. "We can't rely what consumers say as we can't 'track' what they do."

She recalled a chapter in a 2007 book titled The Culture Code: An Ingenious Way to Understand Why People Around the World Live and Buy as They Do by French author Clotaire Rapaille who asked people to nap for 10 minutes and then write down their most memorable sexual experience.

"Subconsciousness can reveal real consumer insights," she stated empathetically. It's not enough to listen to conscious mutterings anymore, it seems.

Source:
Campaign China

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