2020, a year full of uncertainties, the pandemic has made already difficult business even harder. Why is marketing becoming increasingly difficult? Why can't good products sell? What opportunities remain for new brands? Facing a series of soul-searching questions, Jiang Nanchun, founder of Focus Media, offers his insights: Jiang Nanchun, Founder and Chairman of Focus Media, Chairman of Zhenghe Island Shanghai Island Neighbor Organization -01- Why is it increasingly difficult for brands to stand out? A boss of an FMCG company once asked me how I viewed the advertising done for his company over the past decade or so. I said that more than ten years ago, when you had 1 billion in advertising, you would often see your ads when you turned on the TV. Later, about six or seven years ago, when PC internet rose, you put part of your ads on the internet and part on TV, so your ads were not particularly noticeable. Now, more than ten years later, in the mobile internet era, I basically don't see your ads anymore. Why? Because your ad volume may have increased 7 times, but with the rise of mobile internet, information flow has increased 70 times, so you can find that you have been diluted again. In the pure TV era, we seemed to live on Earth. Later, in the PC internet era, we moved into the solar system. Mobile internet is like the Milky Way. The voice of every brand will become increasingly limited and weak, and uncontrollable. -02- Why do good products fail to sell? You've made a good product and laid out the channels, but it still doesn't sell because you're managing the internal aspects of the enterprise, while the real consumption decisions are made externally, in the minds of consumers. When the advantages of your product cannot be transformed into cognitive advantages in the minds of consumers, it won't sell. When you lack a brand mind-share that distinguishes you from competitors in the minds of consumers, then falling into price wars, promotional wars, and traffic wars is only a matter of time. -03- Are brand ads just costs that are hard to see results from? That's because you haven't found the switch in the consumer's mind. An excellent brand strategy not only reflects the product's advantage points, but also is a major difference from competitors, and is the pain point of consumer demand. Only then can it attract attention and resonate with consumers. For example, "Wanglaoji Herbal Tea" was previously a regional product that sold for many years with only one or two hundred million in sales. When they went to Shanghai for research, Shanghai people thought herbal tea was overnight tea; when they went to Beijing, Beijing people thought herbal tea was tea that would cause stomach pain if drunk. It seemed impossible to sell nationwide. But later, with the positioning "Afraid of getting heaty? Drink Wanglaoji," they launched a saturation attack. In the first year, national sales were 1.2 billion; the second year, 2.5 billion; more than ten years later, 25 billion a year. Coca-Cola sells 10 billion in China, Nongfu Spring sells 17 billion, and a can of herbal tea that doesn't quench thirst well sells 25 billion. Is there any justice? The core is finding the switch in the consumer's mind. Many people view brand advertising as a cost item, but that's because they haven't done advertising right. The essence of advertising is to make money. If you've done advertising and didn't make money, then you haven't done advertising right. -04- Isn't building a brand slow to show results? Isn't it faster to do promotions and traffic? Pulling traffic and doing promotions are effective in the short term, but they don't solve your long-term business development. Brand advertising indeed doesn't show results in one or two weeks or a month. When brand advertising with correct positioning is launched, there is a process from quantitative change to qualitative change. The inflection point sometimes takes two to three months, sometimes up to six months to a year. Many people claim that traffic is the essence of all business, but I think brand winning people's hearts is the foundation of business. Traffic is only the result of brand winning people's hearts. We must avoid putting the cart before the horse. If you want to buy the car that best embodies dignity, go to Mercedes-Benz; if you want the most driving pleasure, go to BMW; if you want the safest car in the world, go to Volvo; if you want to buy or sell a used car, who do you go to? Guazi Used Cars, because there's no middleman to take a cut. This is a conditioned reflex in the consumer's mind, turning into an unthinking choice. In the same industry, a big brand and an ordinary brand, spending the same price to buy the same ad slot, will have vastly different click-through rates and conversion rates. Therefore, only when the brand is deeply rooted in people's hearts can it be a continuous free traffic source. Brand power can increase the conversion rate of traffic, and brand momentum can bring premium pricing capability. -05- How to unify brand advertising and performance advertising? Many people in the market talk about the unity of brand and effect. I don't quite agree with this term. I think brand advertising is brand advertising, and performance advertising is performance advertising. They can synergize, but they may not be unified. Because brand advertising is a long-term mechanism. It builds awareness in consumers' minds. For example, Guazi Used Cars has no middleman to take a cut. Consumers remember that, but they may not have a used car right now. But today, if any of you have a used car to sell, who do you go to? Your brain will tell you to go to Guazi Used Cars at the first moment! So you can see that advertising forms a very clear conditioned reflex in the consumer's mind. That's called a brand. Brand is a long-term mechanism, while performance advertising is often a short-term mechanism. So I think it's difficult for brand advertising and performance advertising to be unified at the same time. I believe they should be synergistic. We need to shorten the time it takes for brand advertising and performance advertising to have an effect. -06- What if small and medium companies have limited budgets? How to ignite the brand? I believe enterprises all start small. Small enterprises can't invest 200 million in advertising nationwide. You can find the best sample region for terminal layout. You can first do a saturation attack in one province, or one city. If you can't do Shanghai, you can do Suzhou. If the budget is even insufficient, you might first do one district of Suzhou thoroughly, do a local ignition, and first build up the sample region. Another way is if you want to go national but your audience is relatively limited, you can use precision methods for advertising. For example, some brands in home furnishing and building materials mainly sell to real estate developers and decoration companies. We give them a solution: among all the office buildings in China, which ones have real estate companies, decoration companies, and design firms? You might want to target these people. They might only account for 5% of all our buildings. You just target that 5% precisely. Precision can effectively reduce the cost of ignition. -07- For a new brand wanting to ignite through an IP, what is better to choose? The essence of advertising is repetition; the essence of the audience is forgetting. Through repeated exposure, you form a clear impression in the consumer's brain. The elevators in residential apartments and office buildings are a scene that the city's mainstream people pass through every day. Focus Media's elevator media can achieve high-frequency, mandatory, and effective exposure to consumers. Consumers are more likely to have a strong awareness of ads on Focus Media. So I think for a new brand, if you go to TV or online variety shows to get an IP, for example, sponsoring a certain show, first of all, can you accurately choose a show that will become popular? The ones that can truly drive a brand are the hottest top shows, like the former JDB - The Voice of China, Yili - Dad, Where Are You Going? Now, most program sponsors are basically forgotten. Occasionally, there are top programs, but they are taken by mature big brands like Huawei, OPPO, vivo, Mengniu, Yili, and the starting price is generally 200-300 million RMB, which is not particularly suitable for new companies. I think mature brands are suitable for IP-based, content-based, and entertainment-based approaches because their brand awareness is already high, and they need to create heat and freshness. For new brands, I suggest you first make a clear positioning for your brand, then use core media like Focus Media to ignite the brand. Through high-frequency saturation attacks, first let everyone remember your name and the differentiated value you represent, rather than doing an IP show. In recent years, I basically haven't seen a new brand ignited by sponsoring an IP show. -08- A viral brand has reached nearly 300 million in revenue but can't grow further. How to break through? I've encountered many products that, at the start, used celebrity influencers to "plant grass" (recommend products), and after reaching 200-300 million in revenue, they hit a bottleneck. In a fragmented era, you need to quickly break through from a viral brand to a public brand, to a star brand. For example, Xiaoxiandun, which created the category of fresh stewed bird's nest, also attaches great importance to product and quality. At the start, they seized the dividend of Xiaohongshu (Little Red Book). Through influencer recommendations and celebrity endorsements, they reached 200-300 million in revenue, and then sales hit a bottleneck. So last year, Xiaoxiandun tried brand ignition on Focus Media's elevator media in Beijing, Shanghai, and Hangzhou, and quickly grew from 200 million to 800 million. First, Xiaoxiandun's product quality is very good, and it also has good differentiated value, so it quickly became popular in a small circle. But it was difficult to expand the fire further. The role of Focus Media brand advertising is like pouring a bucket of oil on it, and the fire quickly spreads across the mountains. Many viral brands may have risen by seizing an event or a traffic depression, but events and traffic depressions will pass. The important thing is that you should use these opportunities to quickly complete the initial accumulation, so that you have the opportunity to ignite the brand on a large media platform. If a viral brand cannot seize the time window to ignite and become a public brand and star brand, then as new influencers emerge, it is likely to be overshadowed. -09- Why do you always talk about product upgrades and mainstream people? I suggest everyone upgrade products, move to the mid-to-high-end market, and join the wave of consumption upgrade. Because China indeed had many successful mass-market products in the past, like Midea succeeded, and Galanz also succeeded. But they have already succeeded. Through large-scale production, they have huge scale advantages in their home appliance fields. How can you compete with them? China already has 225 million middle-class people. By 2025, China will have 500 million new middle class, which is larger than the total population of the United States. So I think brands that want to succeed in the future should firmly lock onto and influence these mainstream urban consumers. Because these people are opinion leaders and word-of-mouth champions. They are the vane group of Chinese consumption. They define brands and lead trends. If you catch them, you catch the entire Chinese market. If you have a mass-market product with very thin profits, a product that follows the cost-performance path, the terminal doesn't make much money, and distributors also find it hard to make money when they invest the same amount of money to distribute your product. With thin profits, why would they do it? Many problems in China are due to a negative business ecosystem cycle. Continuous promotions eventually lead to no sales without promotions. Distributors and terminals have no profits and no enthusiasm, and the entire goods can't be sold. So try to do the mid-to-high-end market and establish a positive business cycle. -10- Conclusion I believe China still has a great opportunity to become the world's number one in the next ten years, and it won't change because of a pandemic. Looking back at this pandemic five years from now, it should be a watershed for China's economy. The consumer market will accelerate the differentiation into two tiers, and enterprises will also accelerate differentiation. Companies that still think about price wars every day and fight bloody battles in the mid-to-low-end market will see profits decline faster, and business will become increasingly difficult each year. Those companies that lock onto China's 400 million middle and above income class, create differentiated value with craftsmanship and innovative concepts, seize the time window to ignite their brands, and lead trends will definitely change the market landscape, win pricing power, dominate market standards, and dominate market share. An opportunity for everyone is not an opportunity; a crisis for everyone is not a crisis. Truly competitive enterprises should step on the accelerator in a crisis, not the brake. Source: Zhenghe Island (ID: zhenghedao) Editor: Ye Kaifu Tips will be paid 400-2000 yuan once published.