Sharing | Jiang Nanchun, CEO of Focus Media
China is currently facing the superposition of multiple economic cycles: the demographic dividend is fading, traffic costs are rising rapidly, offline traffic has been halved, the traditional e-commerce dividend is no longer substantial, and the customer acquisition cost for interest-based e-commerce is climbing. This poses huge challenges for enterprise growth. But even as dividends disappear, let's think from another angle: if consumers truly love your product, wouldn't they be able to buy it? So the core issue is that you're not good enough yet. Drucker believed that enterprises have only two functions: first, innovation—creating differentiated products and services; second, marketing—becoming the first choice in the customer's mind. These two functions are the fundamental path to growth. If you're still studying how to capture traffic and playing promotional tactics, you'll become increasingly anxious and busy, because you're not focusing on the essence. You haven't understood what the value of innovation and differentiation is, and whether that differentiated value has entered the consumer's mind. So, traffic has never been the fundamental factor for growth. Relying solely on traffic today can neither retain traffic nor win hearts. Only by accurately gauging people's hearts can you achieve fundamental business growth. How to gauge people's hearts? It's about finding your unique commercial position in the consumer's mind. Therefore, in today's era of disappearing dividends and uncertainty, building a high-quality brand is the fundamental way to navigate cycles.
What does a high-quality brand look like?
1. Kantar MDS Brand Strength Model
M (meaningful): Do you have unique value that satisfies consumers' functional or emotional needs? D (different): How are you different and able to lead trends? S (salient): Do you occupy a unique position in the category so that people think of you when they think of the category? As a globally renowned data insights and consulting company, Kantar has conducted extensive brand research and found that truly profitable brands in China follow the "70/30 principle": 70% of sales come from brand awareness, and 30% from short-term promotions and traffic conversion. Conversely, if 70% of sales come from short-term promotions and traffic, profits are minimal or nonexistent.
2. Three Dimensions of High-Quality Communication
For business growth, beyond unique commercial value, high-quality communication is increasingly important. High-quality communication means high coverage, high quality, and high impact.
High Coverage: Among China's three major media, the internet has a daily coverage rate of 95%, elevator media 79%, and TV 61%.
High Quality: TV, internet, and social media are content-based media; consumers are mainly watching content. Therefore, they need high-quality content to attract consumer attention. In open-space outdoor media, consumers rarely pay attention to ads and find it hard to remember them. In enclosed spaces, consumer attention is relatively higher. Thus, elevator and cinema ads bear a significant share in high-quality communication.
High Impact: Most ads seen today—whether news, mobile ads, boot-screen ads, or Moments ads—are swiped away in about 2 seconds (either closed or ignored). Very few ads are fully read by consumers. But in places like elevators or cinemas, where viewing is mandatory, ads are not easily skipped. Instead, this process creates higher recognition rates, completion rates, and stronger purchase intent for brand messages.
Kantar CEO Wang Xing believes that today's communication is increasingly fragmented. Online, Weibo, WeChat, Douyin, Xiaohongshu, etc., have become the most important social media for young consumers; offline, apartments, office buildings, shopping malls, and cinemas are the core living spaces for consumers and also the core communication spaces. Therefore, using online media like Weibo, WeChat, and Douyin to spread volume, creating topics and seeding with quality content, and offline using life-space media like Focus Media for high-frequency reach, mining brand increments, and triggering purchase demand through scenarios—this "Weibo-WeChat-Douyin-Focus" combination is the most effective paradigm for brand building today.
3. Three Major Paths for Brand Communication
First, integrate into or create major social events and topics. For example, New York Fashion Week, Li Ning's launch; Zhengzhou floods, Erke stepped up; Wenchuan earthquake, Wanglaoji donated 100 million. These are all integrations into major social events and topics, winning consumer recognition.
Second, integrate into major entertainment and sports events. For example, JDB—The Voice of China; Yili—Dad, Where Are We Going?; Ambrosial—Running Man; Mengniu—Super Girl; Head & Shoulders—China's Got Talent. These popular top-tier shows leave a deep impression on consumers.
Third, integrate into consumers' core living spaces and scenarios. You always go home, go to work, go to shopping malls and cinemas. Embedding into the core living spaces of consumption becomes a part of your life. Successful Chinese brands have likely achieved success through these three paths. Of course, betting on the hottest event or variety show of the year is rare and hard to replicate. So, communication should rely more on a deterministic media logic to win against an uncertain communication environment. In China's ad slogan rankings, elevator media, internet media, and TV media are the most memorable channels. From 2020 and 2021 data, these three media dominate the top three, but these channels also have their certainty. Investing in advertising is like investing; it requires certainty. Focus Media is the core scarce resource for brand breakthrough, with 400 million mainstream people connecting daily on the必经之路 of elevators, forming a deterministic connection.
4. Brand Positioning: Answer These Three Questions
Over the years, Focus Media has witnessed changes in Chinese urban consumers' lifestyles and consumption patterns, and has helped boost many brands, such as Genki Forest. Generally, core brand positioning answers several questions: First, what is the product's advantage? Second, what is the differentiation from competitors? Third, what is the consumer pain point? After unifying these three questions, Genki Forest's sparkling water, with its "0 sugar, 0 fat, 0 calories" new sugar-free category, broke the original price ceiling of beverages (3 yuan) to reach 5-6 yuan, because the product tastes good and doesn't make you fat, winning consumer recognition. Genki Forest's real launch was in May 2020, when it conducted a nationwide media campaign, choosing high-frequency Focus Media. Post-campaign data showed significant improvements in brand strength and sales. Product is the foundation; marketing is the amplifier. From the Focus Media investment in the first half of 2020, it clearly acted as an amplifier. In 2019, Genki Forest's sales were around 800 million; in May 2020, the first ignition, monthly sales hit 260 million, annual sales 2.7 billion; in 2021, annual sales exceeded 7 billion. Genki Forest became one of China's most successful new consumer brands.
Brand Growth Comes from Four Directions
Brands don't need advertising per se; they need growth, sustained growth. Growth comes from four directions: first, new product breakthrough; second, scenario triggering; third, channel assistance; fourth, social resonance.
1. New Product Breakthrough
1. Ulike's Breakthrough
As a laser hair removal company, Ulike seized the home beauty opportunity track, but when it reached 1 billion in scale, it hit a bottleneck and struggled to break through. I believe this is not a real market bottleneck but a traffic investment bottleneck. Focus Media covers 400 million people daily, of which 200 million are women. Among those 200 million women, 15% (30 million) might spend 1,500 yuan on a hair removal device, because after use, hair doesn't grow back. Ulike's cumulative sales were only 1.5 million units, and all brands combined sold only 5 million units, so the space is still large. In January 2021, Ulike launched Focus Media brand advertising in first-tier cities, and during the March 8th festival, sales reached 348 million, 1.5 times the same period in 2020; during 618, sales were 462 million, 2.5 times the same period in 2020. So, the so-called bottleneck is actually a precise traffic bottleneck. During 618 in 2021, Ulike was not only the champion in hair removal devices but also in hair removal beauty instruments, ranking sixth in Tmall beauty. In 618 of 2022, Tmall sales reached 680 million, and all platforms 1.5 billion. From annual sales, from 1 billion in 2020, through one ignition in 2021, sales reached 2.5 billion in 2021, and 4 billion in 2022. So, I believe there is no absolutely small industry in China. Is hair removal a big industry? It seems not. Is it an absolutely rigid demand industry? It seems not. But China nurtures huge consumption power; as long as consumer demand is ignited, hair removal can achieve a 10-billion output value. In today's China, the ignition of new products is very important. When traffic investment hits a bottleneck, don't be discouraged; it's just a traffic investment bottleneck. Don't look at how many people are reached online; that's not real reach. Focus on how many ads are stopped offline. The biggest problem facing China's new consumption now is that new people and new demands capture new traffic dividends, create new hit products, but quickly attract competitors. Everyone rushes in, differentiated products become homogeneous, competing for net traffic within a category, prices keep falling, traffic costs keep rising, forming a double kill, making it hard to profit.
2. Three Advantages of Old Consumption
Why can China's old consumption make money? There are three aspects worth learning: First, strong supply capability. Nongfu Spring has 14 water plants in 14水源基地, supplying nearby, because the biggest cost of water is transportation. Second, strong offline penetration. Truly excellent consumer companies have gone through 30 years of history, possibly reaching 5 million terminals. The fastest new consumer company in China only reaches 250,000 terminals a year; to surpass old consumer companies, it would take 20 years. So offline can't be faster, and while internet companies are fast, they come and go quickly. For example, in a small convenience store, there might be only 3 types of water; in a supermarket, 30; online, about 3,000. This is the infinite shelf attribute of the internet, bringing infinite competition. Third, building consumer mindshare. New consumer brands develop quickly online because of goods-finding-people, precise distribution, but they soon hit bottlenecks because people-finding-goods is the brand. Truly big brands have established conditioned reflexes in consumer minds, like thinking of water and thinking of Nongfu Spring, or cheese and choosing Miaokelando. Over the past 30 years, the consumer market has changed a lot, but the essence of consumption hasn't changed: deep distribution and seizing mindshare. Today, we can make Coca-Cola that tastes just as good, but we can't imitate Coca-Cola's 5 million terminals, nor can we imitate the mindshare Coca-Cola has built in consumers. That's the key to Coca-Cola's success in China. Let's look at old consumer companies: Wahaha earns 10 billion from 50 billion; Nongfu Spring earns over 7 billion from 29.1 billion; Want Want earns 4 billion from over 20 billion. Today's new consumer companies have learned many new technologies, new marketing, and new algorithms. Why are they struggling more than old consumer companies? Because old consumption grasps the essence of consumption, while new consumption needs to learn to combine the advantages of new demands and new aesthetics with the essential things old consumption has mastered. That's the future of China's new consumption. Thirty years ago, Nongfu Spring was also new consumption; today it's a mature consumer brand. But every generation of consumer products has no shortcuts; it must follow objective laws. So, what comes fast goes fast; what comes slow goes slow.
2. Scenario Triggering
Mature brands have awareness, but often sales come from scenario triggers. What is a scenario? A famous Harvard theory holds that people don't need the product itself; they need the scenario problems the product solves and the emotional and life meaning in the scenario. "Afraid of getting heaty" is just a function; staying up late to watch games, working overtime, outdoor BBQ, eating hotpot are scenarios. Only with scenarios is there consumption. So, what is a scenario? Time, place, people, events. A scenario is a reason for consumers to actively participate and invest.
1. Scenario Awakening
For example, during Chinese New Year, Nongfu Spring's slogan "Good water brings wealth" leads to buying Nongfu Spring's "Spring Festival zodiac water"; on Valentine's Day, 520, etc., Huaxizi's slogan "If you don't send flowers, send 'Huaxizi'." Human needs are not objectively existing; many needs need to be triggered to unleash consumption potential. In today's era that emphasizes consumption quality, we need more scenario triggers. For example, on the day Gu Ailing won the championship, Luckin Coffee launched an ad celebrating Gu Ailing's victory within 5 seconds, selling 3.6 million cups in a week. So, often time, place, people, and events trigger consumption needs; only with scenario triggers can consumers generate genuine purchase desire.
2. Creating Scenarios
Miaokelando is a milk brand focusing on cheese sticks. If it tried to break through in milk, giants like Mengniu and Yili are too strong, making success difficult. In the cheese track, Miaokelando ranked only fifth, with several international companies ahead, but their advertising wasn't strong, so Miaokelando put its main advertising on cheese sticks. First, due to low awareness, it used a catchy children's song melody to grow sales from 170 million to 500 million. But repeat purchase rates were low because there was no habit of eating cheese. What to do? We invited Sun Li to endorse: "As a responsible mother, I prepare Miaokelando cheese sticks for my child every day. One after school, one after exercise, one for happy sharing. Leading sales nationwide, cheese choose Miaokelando." Three a day, making it a food. When sales reached 1.5 billion, competitors started following. So, it created new scenarios: "Add a slice to a nutritious breakfast; add a slice to bread; add a slice to fried eggs; add a slice to porridge and noodles. Cheese choose Miaokelando." Sales grew from 1.5 billion to 4.5 billion. As an imported product, cheese was not well-known, but through repeated revolutions, it finally became part of consumer mindshare.
3. Channel Assistance
Today, both online and offline channels face great pressure. Brands not only care about advertising but also how to complete sales from brand awareness, achieving brand-effect synergy. Alibaba is the second largest shareholder of Focus Media. As early as 2018, Focus Media and Alibaba launched the "U Focus Plan," jointly creating the Tiangang System. Through this system, Focus Media can match buildings with high potential customer concentration based on customer tags, achieving precise building selection, truly "thousands of buildings, thousands of faces." These potential customers are likely new customers, and they may be customers the brand hasn't noticed or reached before. Moreover, every Focus Media placement data is returned to Tmall's data bank, allowing brands to conduct second-round追投 based on the data. In this way, offline large-scale precise ignition, combined with online more precise second touch, forms an effective closed loop, greatly improving brand-effect synergy. From data, people who watched Focus Media ads, when retargeted, had an average conversion rate increase of 50%-60%.
1. Focus Media Brand Case—Kong Ke Pasta
In 2020, Kong Ke Pasta, established less than a year, seized the live-streaming e-commerce trend, leveraging Li Jiaqi and many celebrities' influence to enter the young consumer's view. At the same time, Kong Ke seized the seeding trend in the past two years, conducting seeding marketing on Bilibili, Xiaohongshu, Douyin, and other social platforms. In late May 2022, Kong Ke Pasta appeared on Focus Media elevator media, targeting mainstream urban populations in over 20 first- and second-tier cities including Beijing, Guangzhou, Shenzhen, Chengdu, and Hangzhou, for brand breakthrough and preheating for the upcoming 618. It created the scenario "Mom, I'm hungry!" and the slogan "Only being a mom, not cooking." After the placement, the brand began to rise. Data flowed back to Tmall for second-round追投, and sales grew from 400 million to 1.1 billion, with net profit reaching 100 million. May single-month sales reached 100 million, and during the 18 days of 618, it also sold 100 million, ranking first in the vegetarian platform and tenth in Tmall food category. Finally, by igniting "pan-precise crowds" on a large scale through Focus Media, they repeatedly watched content on various platforms, attention grew significantly, and conversion rates increased substantially.
2. Focus Media Brand Case—Ying's Complementary Food
Traditional complementary food is age-based, e.g., what to eat from 7-12 months; 1-1.5 years; 1.5-2 years; over 2 years. Ying's complementary food is based on stages: when the baby can sit, bite, stand, crawl, each stage immediately changes the food, quickly differentiating from competitors. Through effective staging, it formed a unique system, and after placement, it had a significant effect. We evaluated the effect of Ying's complementary food placement from two angles. Online: sales/UV growth; conversion rate/brand-owned traffic ratio increase; price increase/promotion cost reduction; replacing e-commerce platform ad traffic; expansion and cost reduction of online distribution channels (cooperation with top/mid-tier streamers, live-streaming bases). Offline: sales growth; store conversion rate/order value increase; price increase/promotion cost reduction; replacing offline terminal resources (storefronts/first recommendations, etc.); expansion of distribution channels (entry into strong channels).
4. Social Resonance
During the Mid-Autumn Festival, Xiaoguan Tea conducted a marketing campaign on Focus Media screens: a boss wrote many cards to the important people in his life. This accomplished an almost impossible marketing task: a one-hour long ad film, displayed on Focus Media smart screens for a full day. That day, the topic discussion volume across the internet reached nearly 2 billion, hitting the second place on national hot searches.
Business Growth, Rekindling Hope
1. The Way of Growth, the Art of Marketing
In 2023, enterprises face tight marketing budgets, but business growth still has hope. On the "way" of marketing, I have three suggestions: First, adhere to long-termism, return to the original intention, and don't always think about promotions and traffic; Second, believe in the compound interest of brands; anything without brand compound interest is not worth doing; Third, focus on consumer behavior change and avoid ineffective placements. On the "art" of marketing, I have four suggestions: First, focus on core single products and reduce long-tail products. Focus on core big single products, deeply cultivate new scenarios, new audiences, and create new functions. Coca-Cola cut 400 brands down to 200, concentrating resources on the top ten brands, and instead achieved huge growth. So, iterate, innovate, and upgrade scenarios in the single products you're familiar with. Second, focus on consumer behavior change and reduce ineffective placements. Consumer behavior is not easy to change; it requires 10, 20, 30 times higher frequency to form cognition and impression in the consumer's mind, and then generate real action. Third, focus on core assets; brand is the core asset, reduce reliance on promotions and traffic. Fourth, focus on core media, saturate attacks, hit consumer mindshare with high frequency, achieve strong growth, and change the landscape. Chinese brands like Anta and Feihe have made louder voices than competitors in their fields, ultimately breaking consumer mindshare, achieving strong growth, and changing the pattern of foreign monopoly. In media communication, use the lowest cost to reach the broadest audience, and use the best combination of Weibo, WeChat, Douyin, and Focus Media to achieve the best change effect. What we pursue is not 40% or 50% reach, but how many users have changed their behavior.
2. Market Bottoming Out, Fortune Turns
The economic turning point of 2023 is coming, and China will enter a new diamond decade. Where is our optimism based? I think there are five reasons: First, the negative impact of the pandemic is clearing, and prospects are becoming certain; Second, top-level attention is refocusing on the economy; Third, relations between China and the US and the West are tense but not broken; Fourth, a series of policies to stimulate the consumer market will be introduced domestically; Fifth, the US dollar interest rate hikes end, real estate bottoms out and rebounds, and consumer expectations shift. Thirty years ago, Ogilvy president Ogilvy said: If you don't invest money in the brand, you'll spend it on promotions and discounts. If you invest in the brand, the brand becomes part of people's lives; if you spend on promotions and discounts, the more you promote, the less you get. Fifty years later, it's still the same.