In the "post-epidemic" era, the trend of Chinese brands rising globally has become more and more obvious. All kinds of companies are racing to sail the sea, among which games, financial technology and D2C categories have become popular tracks. However, in the face of a rapidly changing marketing environment and different consumers around the world, Chinese companies are facing the problem of balancing long-term brand building with short-term revenue.
Around these changes, The Trade Desk and Kantar jointly launched the white paper "Accelerating Chinese Enterprises to Go global with the power of "brand"", focusing on the three popular categories of games, financial technology and D2C, interpreting the current needs and challenges of building brands overseas for Chinese enterprises, and finding a win-win solution to drive sales and brands.
Quick overview of report highlights
There are two key points to enhance brand value: brand meaning and brand differentiation
Globally, most Chinese brands have withstood the test of the epidemic. The data shows that consumers in developed markets are increasing in awareness of the top 50 Chinese global brands tracked by BrandZ year by year.
*7 developed markets (US, UK, France, Germany, Spain, Australia and Japan)
According to Kantar BrandZ research, brands that have increased in value over the years have performed well in enhancing brand meaning and shaping brand differentiation, while brands with declining value have underperformed in these areas.
As consumers become more price-sensitive during the pandemic, brands need to increase their perceived value. Specifically, brands can do this in two ways, meaningfulness and differentiation.
"Meaningful" brands can also deepen brand affinity and loyalty while meeting consumer needs; "differentiation" means that brands can provide consumers with their exclusive products or services - a two-pronged accumulation of "brand equity", promoting short-term ROI improvement and long-term brand value.
By quantifying and analyzing the impact of brand marketing activities on brand equity and underlying sales over time, the report also found that building brand equity is extremely important for increasing sales in both the long and short term. If the composition of total sales is stratified, brand equity can bring about a considerable increase in sales, which is not only reflected in different marketing activities, but also in the total ROI achieved by different channels.
Kantar's Total Marketing ROI (TMROI) quantification
Total ROI achieved through media
Games: The visibility gap between Chinese mobile game brands and international brands has narrowed
The game industry has developed rapidly during the epidemic, but fierce competition has also made many Chinese leading mobile game brands adjust their strategies. In addition to increasing investment in production quality, game owners are also enhancing their brand influence in developed markets. The good news is that in 2021, Chinese mobile game brands successfully narrowed the visibility gap between them and international brands by 5% compared with 2020. Brand building is important for game owners, whether it's to maximize the consumer lifecycle or for a new IP (not just as a sequel or an annual iteration of the series).
Fintech: Innovative and disruptive, but lacking in emotional connection
Fintech companies are making their mark on the world stage, bringing innovative and disruptive experiences to consumers and investors, but they are respected and frustrated with building long-term relationships with consumers, especially younger consumers, compared to established and mature financial institutions. Therefore, the report believes that when fintech companies do marketing activities, they should pay more attention to the improvement of trust and brand superiority, and strengthen the emotional connection with consumers.
D2C: The year-on-year growth rate of brand power in multiple subdivisions is outstanding
China's fast fashion cross-border e-commerce shein will grow by 40% year-on-year in 2021. D2C is a time- and even cost-saving way for consumers, where brands can communicate directly with users, helping to strengthen customer relationships and gain more consumer insights. Although D2C is not a category, through the D2C approach, brands can control the entire process from initial contact with consumers, product use, to final delivery, and build consumer awareness around the brand ecosystem, which generates first-party data and insights from advertisers, which are especially beneficial to early-stage or small consumer goods companies seeking differentiation.
The historical opportunity of smart big screen/OTT overseas
As of Q2 2021, 85% of U.S. broadband household users had a smart large screen (CTV). With the advancement of science and technology, the TV itself has long been transformed into a new force for both programmatic advertising, and high-quality OTT video content is no longer limited to home viewing, but is gradually becoming mobile.
Better information transmission and bond building
As smart big screens, mobile phones, tablets and other media continue to penetrate into public life, marketers can target more audiences with higher engagement, and if they want to bring better brand awareness and messaging, choosing paid video is more dominant. Compared with non-paid video, the use of major OTT platforms is 1.9 times more relevant to the brand's information.
Paid video is a platform that consumers can trust and that doesn't disturb the consumer viewing experience. Leveraging the ad viewability and appealing nature of this experience will help advertisers increase brand awareness and message relevance, thereby building trusting connections with consumers, which is especially important for fintech companies.
Advance the speed of transactions in the lower part of the sales funnel
For D2C brands, the ability to focus on marketing and refine traffic measurement allows marketers to use paid video to promote business at the bottom of the marketing funnel, while the smart big screen can already optimize delivery in real time and understand the entire purchase process and experience from a "consumer perspective". Interactive video ads offer higher conversion possibilities than standard video ads. For gaming companies, paid video also drives download rates, and former gamers can target their target audiences to get a better RETURN on investment.
Higher synergy with linear TV and paid video leads to incremental coverage
In 2021, 60% of U.S. advertisers plan to shift advertising spending from linear TV to CTV/OTT. 55% of advertisers cite incremental reach as a major factor in this shift. While the share of CTV/OTT is growing and dominating, linear TV still has a coverage that cannot be ignored, and marketers can consider using paid video in collaboration with linear TV to increase reach, and the use of linear TV with paid video has also proved to have a higher sales impact than working with other media channels.
TV + Video on Demand (VOD) cross-platform advertising has a greater sales impact
Consumer habits have changed, and paid video has become a necessity for advertisers
Changes in consumer habits can be seen in several sets of data. First, more and more households are canceling their subscriptions to pay TV and turning to paid videos; second, the audience of OTT is mainly young people, who tend to be high-income groups, which is also the target group of most brands; third, consumers are willing to watch ads when watching free or low-fee content, which will ensure a high-quality advertising catalog; and fourth, the COVID-19 pandemic has accelerated the consumer's transition to streaming services, and the audience and usage of OTT platforms have increased.