Innovating in an Age of Personalization

First of all, a very happy 2014 to all. Like many others, I took the two weeks off for the holidays and spent quite a bit of time with varying slices of my family -- in-laws, grandparents, siblings, and my kids. Even though many a movie had been written about the tensions and antics of families temporarily together in such tight quarters, few show how much our digital world has made it easier to make it all enjoyable. There were many times when things were happening that we just take for granted now, but really are deep-set behavior changes that we should step back and recognize. In our quest for always looking at the next hot app or technology, much is now embedded in our world that, as marketers, and just as people, we should recognize:

Texting coordinates. Yes, it is a basic technology, but our family sends dozens of texts per day to make sure all of our logistics are smooth. The asynchronous nature of them allow a response at your leisure, and it is much less intrusive than a phone call (does anyone phone people anymore?) For mobile marketers, getting into the texting flow via permissioned SMS will remain a viable channel, and will likely grow in importance as long as the messages are truly relevant and helpful. Let me know that my credit card bill is due tomorrow and give me a one-click way to pay. 

Skype integrates. Our daughter took a semester abroad in Paris, and Skype was an essential part of our weekly routine of connecting with her. The video always worked and the ability to move her image around on an iPad, even to go over and see the dog, was incredibly convenient. I think we'll likely see more Skype-enabled interactions available on mobile and web sites so people can help you pick out the right TV, who can advise you on finances, who can solve a travel dilemma, etc. People will expect to see the human on the other side. This will likely put more pressure on service providers to change their protocols to support a face-to-face interaction. The brand bonding upside could be extremely high.

Mapping locates (and more). No one gives directions anymore, and maps do so much more, with layers for checking on traffic, cheap gas, food specials, and locations of opted-in family members. Maps are becoming a primary search function. Where location matters -- retail, dining, travel, etc – businesses will need to think more creatively about their placement in maps and the functionality they will enable. Maps will become a source for messaging, and will increasingly have real time information highlighted, such as available rooms, empty tables, open parking. 

Video liberates. I was amazed at how many of the households we were in were using over-the-top services, like Roku, Chromecast, Hulu, to get access to Amazon, Netflix, YouTube and other alternatives to cable. Teens were easily moving around across them, as well as checking out the cable provider's on-demand app. No one watched timed TV except for sports, and the assumption was always that you could get pretty much anything you wanted to see. I know much has been written about the threat to cable and telecomms companies, but seeing the phenomenon so clearly , in so many households, makes me wonder how long it will just be before a simple integrated application gives access to everything in a simpler way, thereby truly breaking open the alternative to regular pay TV. Aside from the strategy for the media companies, marketers need to allocate clear budgets to experimenting with new pre-roll, on-demand, and sponsorship alternatives to buying simple commercial time. 

Photos permeate. During my vacation, people were busy with Instagram posts, Snapchat messages, and Facebook galleries. Our family now uses all of these to share moments with each other, and others. As marketers, we need to make sure we are not losing sight of the image in light of the growth of video, and we should find ways to make it easier for people to use brands in the context of the images they share, e.g. sponsoring photo filters, enabling new kinds of Photshopping insertion of a product in a fun way, adding clickable information to pictures about a place that should also be marketing itself. These services have yet, in many cases, to monetize themselves, but I see new directions for the right brands to get themselves into the flow of the image dialogue in powerful ways.

So, while none of these observations is radically new, just seeing how real the trends are in reshaping one's own family behavior is motivating me to make sure clients are building new assumptions into how they'll be marketing in the next couple of years. How far has your brand gone in embracing these changes and getting ahead of the learning curve involved?

In 2014, we'll see brands and agencies harness digital advertising in a way that integrates seamlessly with people's busy lives, whether through location retargeting on their mobile devices, predictive analytics or the intelligent automation of the ad buying process. Consumers send buying signals every day to advertisers and the brands that figure out how to use technology to listen more closely and send their messages in an organic and authentic way will succeed.

At RadiumOne we predict the following industry shifts:

1. Programmatic will Get Smarter -- skyrocketing to 60% of all digital ad spend.

We predict that by the end of 2014, almost two-thirds of the digital advertising market will be automated but the key to growth will hinge on the model's ability to rely less on third-party data and more on first-party data insights. Ad tech companies must take a page from the Facebook and Twitter playbook to incorporate some form of proprietary data into their technology. This coming year will focus on the refinement of advertising automation as technologies that rely solely on third-party data will become table stakes, fueled by the industry need to innovate cookie-less forms of targeting. This added layer of ad intelligence will give brands a leg up on the competition.

2. Platforms Thrive. Networks Die.

As marketers expand their digital footprint this year they will seek more cost-effective media buying solutions that offer them the transparency, control, performance and insights they truly need and generic ad networks will become a thing of the past. Advertising platforms will rise to the forefront as a crucial solution removing the complexity of media buying. Unlike networks, platforms are designed to put the power back in the hands of brands and eliminate arbitrage and heavy fee loads associated with the agency model.

3. Artificial Intelligence is a black box. Automated Intelligence will live on.

Many vendors currently fail to demonstrate how their artificial intelligence based on common third-party data brings any value to marketers. In 2014, marketers will seek those vendors using intelligent software that automates media to produce new insights that no one else has gleaned by combining their brands first party customer data and linking it with location-based and proprietary data. Brands will crack the code of big data by using these findings to drive data-informed decisions on the right course of action to take, at the right time with the right message over the right channel.

4. Mobile will exceed analyst estimates to represent 30% of all digital spend.

Spending an average of two hours and 21 minutes a day on their devices, consumers are replacing computers and TVs with smartphones and tablets to surf the Web and watch videos. The rise of new anonymous cookie-less methods of capturing user insights on mobile will help advertisers overcome one of the biggest obstacles for marketers -- mapping user behavior between mobile and desktop. Although current analyst estimates expects mobile ad spend to increase by 19%, we predict mobile will emerge to account for 30% of all digital spend in 2014.

5. Location becomes the new retargeting signal for mobile.

Elaborating on the personalization theme, next year brands will begin utilizing location-based data to more effectively reach consumers and successfully convert customers across the web and mobile. Mobile ad campaigns will start to leverage comprehensive analytics to hyper-target existing customers in real-time and identify avenues to connect them with their next customers on their most trusted device. Wearables and other innovative technologies analyzing consumers' movements are a sign of what's to come.

Innovation

Now neck-and-neck?

Historically this was a no-brainer as Apple leapfrogged everybody with its new product breakthroughs: iPod, iPhone and iPad. However, since Tim Cook took over as CEO in 2011, the charge is that Apple has become more of an iterator rather than an innovator.

For years, the Apple rumor mill has forecast (wrongly) the imminent arrival of the iWatch and the iTV, while Samsung has brought these products to market, with the Galaxy Gear and Smart TV. Google too is pushing ahead with new product categories, like the Google Glass smart-glasses.

Jong-Kyun Shin, the Samsung President/CEO who runs its mobile division, said: “Innovation is what will get consumers to buy new devices… The Galaxy S4 has features unique to Samsung like Air Gesture that detect hand gestures. In the process of developing and making the Galaxy S4, we have filed around 120 patents related to user interface and software. We've also hired a number of software engineers from India, Russia, China and Europe to develop unique features internally.”

Is this innovation strategy working? Reviews of the hand and eye gestures in the Galaxy S4 suggest that they are not “fully-baked”, actually slow the phone down and are more like gimmicks. Critics’ reviews of the Galaxy Gear smart-watch have also not been great, and it has only sold 800,000 units since its launch two months ago. However, Interbrand's Moon Ji-hun argues that its more about positioning: “Probably Samsung knows better than anyone that Gear will not become a mainstream product. Still, they are trying to convey the message that 'we are first with such technology,' which they hope will help build their brand as an advanced technology firm.”

By contrast, the fingerprint sensor unique to the new iPhone 5s has been well-received and is thought to have been well-executed. In what Apple claims to be “the most forward-thinking iPhone ever”, the iPhone 5s is also the first smartphone to market with a 64-bit processor, the A7, which ironically is manufactured by Samsung.

An unlikely Samsung admirer is former Apple CEO John Sculley, who led the firm while Steve Jobs was pushed out in the 1980s. In a piece welcoming Oh-Hyun Kwon into the 2013 TIME 100, Sculley wrote:

“Product design, marketing and complex supply-chain management are the trifecta of success in consumer electronics. Excelling at all of them simultaneously is a rare feat, much like throwing a no-hitter in baseball. Akio Morita did it at Sony with the Walkman and Sony Trinitron. Steve Jobs did it with the iPhone and iPad. With the Samsung Galaxy, Oh-Hyun Kwon joins those business giants. Kwon’s first principles of leadership are remarkably simple and clear. Galaxy phones have a signature design feature: big, beautiful, highest-definition screens; an integrated supply chain allows for a family of products at more price points than competitors’; and their brand advertising is bold, tasteful and executed with a cheeky self-confidence equaled only by Apple’s.”

Apple’s recent ‘This Is Our Signature’ ad is very much a restatement of the core Jobs philosophy: its strapline states, “We simplify, we perfect, until everything we touch enhances life.”

So it seems we have a battle between perfection and getting it out new products fast and refining them later. If it continues on current product feature trajectories, then I would favor Samsung.

But what Apple fans and stock analysts alike are crying out for are bold, new product categories which could rest the game back in Apple’s favor.

CEO & Leadership

Samsung Gets The Medal: 3 CEOs vs Tim Cook

You may be surprised to learn that Samsung has not just one but three CEOs. In post since June 2012, Dr. Oh-Hyun Kwon is Vice Chairman & CEO. Then in March 2013, Samsung also promoted two of its presidents to CEO: most significantly for this discussion, Jong-Kyun Shin, who heads up Samsung’s mobile division, and also Boo-Keun Yoon, head of the appliances division. They do still both report to Oh-Hyun Kwon though, so he maybe the more dominant player. As is common in the culture of Korean companies, Samsung hasn’t provided anything more than minimal bios for these executives, so we don’t know a huge amount about them beyond a handful of interviews that they have given over the years.

We do know that before he become CEO, Kwon oversaw Samsung's components business, which makes displays, chips, memory, processors, etc. Kwon helped lock down one of his division's biggest customers, Apple. Apple uses a lot of Samsung components in its mobile devices. Under Kwon, Samsung became the second largest chip maker in the world.

Mobile chief Jong-Kyun Shin has been the most outspoken, telling analysts last month that Samsung’s tablet business is growing rapidly and the company aims to topple Apple as the biggest maker of tablet computers too. He is equally ambitious for the Samsung brand, saying, “Our product innovation and marketing strategy have made Samsung the world's most preferred smartphone brand. Now we'll move from the most preferred brand to become one of the world’s leading aspirational brands.”

At Business Insider's IGNITION Conference, David Eun, executive vice president of Samsung's Open Innovation Center, shed some light on how the company has been able to see such great success despite such heavy devotion by Apple fans and customers: “Samsung is a very entrepreneurial story. The company set large goals for itself and has been bold in its execution.” He adds, “Seven years ago there was no iPhone or Samsung Galaxy phone. It was all about Nokia and Motorola. It takes entrepreneurial ideas and execution. The leaders at Samsung are people who have risen and made their mark by being entrepreneurial.”

And it is still in the shadow of the visionary Jobs that Tim Cook is currently judged. Cook was a very competent logistics man and COO, but as Jobs himself expressed, “Tim is not a product person”. I see him as a ‘professional manager’ who risks managing processes rather than putting the next dent in the universe. He has done some good things, like improving internal collaboration and corporate governance, but he is not the great showman like Jobs and the jury is out on him.

It will be interesting to see the impact next year when Burberry CEO Angela Ahrendts joins Apple as SVP Retail & Online Stores – will they create more of a fashion and customer focused Apple? Maybe Angela will be Apple CEO in the future?

Overall, currently Samsung’s leadership has more momentum, as they are executing at speed, picking up customers, gaining market share and widening product range. Yet there are still big challenges.

Last week, amid investor concern and lower than hoped-for sales of the flagship Galaxy S4, Samsung called a “crisis awareness meeting”. Samsung has invited 600 management staff members to attend a four-day "global strategizing meeting" in mid December, where the main topic is ‘Crisis Awareness’. According to a report by ZDNet Korea, “As people are foretelling that downfall of Samsung is coming, they are trying their best to prevent such crisis from happening.”

While “crisis” at Samsung doesn’t sound great, it is good that the co-CEOs are facing reality and involving the wider management team. It contrasts favorably with Steve Jobs’ famous “reality distortion field”, which helped move mountains in product development, but often meant that he was abrasive and slow to acknowledge problems and challenges (e.g. iPhone 4 ‘Antennagate’).

Wonder whether Apple has a 'reality distortion field' on its top team’s leadership performance?

Brand

Apple wins the medal but Samsung closing the gap by massive spending

The Apple brand and logo are currently more recognized around the Western world, and in London and New York, you cannot walk down the street without seeing a sea of white headphones and people playing with their iPhones. The Brand Finance Global 500 2013 puts Apple and Samsung right at the very top of the best brands in the world, ahead of Coca-Cola and Google.

Samsung smartphones are broadly comparable, feature-for-feature, with competitors like HTC, Sony, LG and now Nokia, so why has it become so dominant? A big part of the answer lies in its sheer marketing muscle – Samsung spends a bigger chunk of its annual revenue on advertising and promotion than any other of the world's top-20 companies by sales – 5.4%, according to Thomson Reuters data. Apple spends just 0.6%, and General Motors 3.5%.

Adverts mocking Apple fans, and heavy investment in product placement and in distribution channels have strengthened its Galaxy mobile brand. Samsung now sells one in every three smartphones and has more than double Apple’s market share. Is this enough to make Samsung loved?

Samsung’s Galaxy S4 launch in New York came under fire for being sexist, showing giggling women chatting about jewelry and nail polish while the men discussed the new phone. Oh Jung-Suk, associate professor at Seoul National University business school cautions: “Samsung's marketing is too much focused on projecting an image they aspire to: being innovative and ahead of the pack. They are failing to efficiently bridge the gap between the aspiration and how consumers actually respond to the campaign. It's got to be more aligned.”

Moon Ji-hun, head of brand consultant Interbrand's Korean operation, adds: “When your brand doesn't have a clear identity, as is the case with Samsung, to keep spending is probably the best strategy. But maintaining marketing spend at that level in the longer term wouldn't bring much more benefit. No one can beat Samsung in terms of ad presence, and I doubt whether keeping investing at this level is effective.”

Samsung has told Reuters that it will “continue to leverage our brand power to maintain growth momentum, while focusing on optimizing the efficiency of our marketing activities.”

Apple may sit in top position now, but has lost its mojo over the last couple of years through lackluster product releases and perceived lack of innovation. Samsung is catching up and is already no. 2. The Samsung brand can be improved and it isn’t loved by some like Apple, but I am impressed with the leadership team for seizing the opportunity to leapfrog all its other competitors, through investment and execution with conviction.

Design

Apple wins the medal, but do simplicity and beauty still trump a bigger screen?

Apple has long placed design at the heart of its product development policy. Steve Jobs famously used to obsess about details that nobody would ever see, such as the look of Apple’s factories and the internals of products… this trend was taken to its logical extreme with the launch of the translucent plastic iMac in 1998.

When the iPhone was launched in 2007, its all-touchscreen and single-button front was distinctive and simple. Apple has honed the design over the years with glass casing and then unibody aluminum, but fundamentally it remains unchanged. The iPad takes the same design cues and it gets ever lighter and thinner. Apple’s aluminum MacBooks and iMacs are widely considered to be the most beautiful, slick and minimal.

Sir Jony Ive, Senior Vice President of Design, keeps the Jobs design obsession alive at Apple. His biographer Leander Kahney recently called him the “soul” of Apple, adding, “Ive has a mad, total, one-hundred-and-ten-percent commitment to making the best products humanly possible.” Jony once flew to Japan to watch a sword-maker forge a katana, in his quest to make the MacBook Air even thinner. His remit has now been expanded to software as well as hardware, leading to the flatter, cartoon-like and generally well-received iOS 7 iPhone software update rolled out in September.

However, now that nearly all smartphones have an all-touchscreen front, the differences between them are less striking. Samsung’s current flagship the Galaxy S4 in some aspects has a less polished look than the iPhone 5s, with a polycarbonate plastic backing. However, it has a singular design feature: big, beautiful, highest-definition screens, that dwarf the iPhone and its “Retina” display. The design is “good enough” for consumers who are more focused on features, price and a bigger screen canvas.

Overall it feels that Apple still has the design edge.

Ecosystem & User Experience

Apple wins the medal with its "walled garden".

This is where Apple still excels. Tim Cook likes to claim that, “Apple has unique strengths in products, software and services”. I think it’s a bit simpler than that. Apple products still broadly have the reputation that they “just work”, and indeed they have made technology more accessible and made us more connected. Add to that the 1,000,000 apps available to download in the App Store and you have a very powerful platform that is seamless across multiple devices. People (willingly) get locked in to Apple’s “walled garden” and it is difficult to persuade them to make the move outside it.

Samsung on the other hand is highly reliant on Google’s Android mobile operating system for smartphones and tablets, and on Microsoft for Windows PCs. While the apps on the Google Play store have caught up in number with the Apple app store, they have historically been slower to come to market and less reliable due to the large fragmentation of Android devices. The Android tablet apps were thought to be just blown-up smartphone apps rather than iPad-style apps fully reimagined for a larger screen, although this is changing. Where Samsung adds onto its devices its own user interface, this is sometimes considered to be “bloatware” that gets in the way of the user experience and duplicates or slows down the core Android or Windows operating system. So here Apple’s obsession with control does pay a dividend for ordinary users wanting stable and intuitive devices.

Principal CEO Oh-Hyun Kwon has publicly acknowledged that this is a weakness and important area of development for Samsung: “A particular focus must be given to serving new customer experience and value by strengthening soft capabilities in software, user experience, design, and solutions.” He also believes that to secure an “an absolute lead” the company, “must have dominance over new technology and global markets”.

John Sculley adds, “As Samsung builds a campus in Silicon Valley, all eyes will be on Kwon to see if the CEO with a Ph.D. from Stanford can be as successful with software as he has been with hardware.”

Looking at buyers of new smartphones, the above chart shows that not many users switch from Apple to Samsung, at only 11%. This is critical to Apple’s long-term survival since Apple users are sticking with iOS and not defecting to Samsung. Apple is having about one-third of its users coming from Android. It is interesting to note that similar to all buyers first-time smartphone buyers favor Samsung by about a three to one margin, approximately 6% vs. 2%, over Apple.

Apple still ahead.

Giving Customers What They Want

Samsung wins the medal.

Customers within Apple’s walled garden broadly get what they want in terms of a seamless user experience across iPhones, iPads and Macs, but they have a much more restricted choice when it comes to variations of new devices. There is only one top-end iPhone (the 5s), and only a big or a small iPad (the iPad Air or the iPad Mini). Steve Jobs famously liked to make these kinds of decisions for customers rather than bother them with a confusing array of options.

By contrast, Samsung makes a much wider range of devices in all shapes and sizes, at a range of price points. They can even go bigger than the Galaxy S4, with a Galaxy Note smartphone known as a “phablet” that blurs the distinction between phone and tablet. Samsung also makes a range of hybrid PCs that fuse tablet and laptop, as well as TVs, kitchen appliances and the new Galaxy Gear smartwatch. The bigger screen in particular seems to be the biggest draw over Apple, although it is something that Apple is likely to correct with the launch of a bigger iPhone 6 in 2014.

Profits & Growth

Growth now with Samsung so wins the medal, but Xmas showdown ahead

The most recent Fortune 500 Global rankings of worldwide companies (based on revenue in their fiscal years ended on or before March 31st, 2013) shows that Samsung topped Apple with revenue totaling $178.6 billion, compared to $156.5 bn. However, with $41.7bn in profit, Apple was beaten only by ExxonMobil. This was more than double Samsung’s $20.6 billion annual profit.

This might be changing – this graph from Business Insider shows that, for the last two quarters, Samsung’s profits were actually higher than Apple’s. Having settled into a pattern of releasing new iPhones and iPads in September/October, Apple is now highly reliant on the holiday quarter in Q4 – although Tim Cook may have a point when he said, “I think it’s going to be an iPad Christmas.”

For now, Apple’s iPhone business is holding up well – it sold 150 million iPhones in its last fiscal year ending in September, as well as 71 million iPads. Indeed, Apple can still claim 70% of the profits in the smartphone sector. The gloss has come off slightly off Samsung’s sales machine – it fell far short of initial estimates that it would sell 100 million Galaxy S4 units, and it is instead now predicting of 100 million total Galaxy S and Note series phones, phablets and tablet devices up until the end of the year.

Apple’s share price has had a tough fall from its all-time highs of $700, although it has since recovered a lot of the ground as stands at year highs of over $560. This is partially fueled by rumors that it is finally about to do a deal to get carrier coverage for the iPhone with China Mobile, the world’s largest mobile carrier and potentially a big source of growth. But for me, this is again an example of a deal that should have happened years ago and which has been hampered by poor execution. Another question mark is the recent launch of the iPhone 5c, with the ‘c’ being variously said to stand for “color”, “cheap” and “China”. It had been hoped that a lower end model would help Apple to gain share in emerging markets, although is it only $80 cheaper that the iPhone 5s and Tim Cook has said that it is a mid-tier rather than low-tier model. This does however give Apple pricing flexibility for the future and, in a market subject to increasing commoditization, I quite admire Apple for standing firm on its high profit margins.

Overall: Neck-And-Neck

So overall today they seem to be neck and neck but I do see the growth of Samsung to be steadier and more sustained. We’re all fascinated by Apple, but so much of what we hear turns out just to be rumors. Right now it remains a profit generating machine, but long-term that will change if it fails to recapture the public imagination and innovate into new product categories. Samsung has weathered years of legal action, and having initially copied parts of the Apple playbook, it is now starting to innovate into new areas.

In the future I am torn: my head currently says the 3 mystery CEOs of Samsung will prevail, but my heart really wants Apple to come back and leapfrog them, with innovation that changes our lives again. Maybe in future both will remain big beasts, and we will have an Apple and Samsung duopoly.

Millward Brown, the global research firm, has today published its definitive annual BrandZ list of China’s most valuable brands – essential reading for Sinophiles like me (and indeed for anyone with an interest in what’s happening in the world’s second largest economy).

Now in its fourth year, the WPP-commissioned survey for the first time documents the leading 100 brands rather than the top 50. You can read the full report here, but the top ten are:

These companies are among the biggest in the world, with a combined brand value of more than $250 billion, but most in the West know little or nothing about them (yet).

The report is absorbing both in itself and in what it tells us about the unprecedented industrial revolution that has taken place in China over the last 20 years or so. Here are five things to emphasise:

1. Technology, telecoms and banking brands dominate

Seven of the top ten brands are financial institutions, tech companies or telecoms providers. Looking at the top 100, the banks have a collective brand value of $114 billion, telcos $74 billion and tech businesses $60 billion. The next largest category (insurance) is worth about half that at $32 billion.

Each of these three dominant sectors is developing rapidly, as China’s industrial revolution drives financial, social and behavioural change on a massive scale.

As businesses they’re finding they have more and more in common. The web is bringing them into ever-closer proximity (more on this below) – and convergence happens pretty fast in a country with an online population approaching 600 million.

2. China’s tech businesses already stand toe-to-toe with the global giants

Baidu, which operates almost exclusively in China, processes more than five billion search queries every day. This is on a par with Google’s global figure.

Tencent’s WeChat messaging service, launched only two years ago, is now used by around 400 million people – and continues to grow exponentially. Tencent’s revenues and profits are greater than Facebook’s.

And in China, where more than half the population is yet to go online, the digital explosion is only just beginning.

3. Chinese tech companies want to be banks, too

Financial institutions may occupy four of the top ten slots in the BrandZ rankings, but they’re looking nervously over their shoulders at a new breed of competitor.

Baidu isn’t just China’s Google. It’s Google plus Amazon, and now it’s moving squarely into the territory of the banks as well, as the latest tech player to offer users financial services. Deposits to new wealth management service, Baidu Wallet, reached their limit of one billion yuan within five hours of the service launching a few weeks ago.

Transaction platforms are increasingly important to the tech companies, which already have online payment systems and even offer loans. According to Reuters Breaking Views, Alibaba is the biggest threat to the banks: by July this year it had made short-term loans totalling more than $16 billion to businesses selling merchandise on its sites. Both it and Tencent are reported to have applied for banking licences in the last few months.

Given their phenomenal scale and growth, and the convenience of their platforms, these tech players are well placed to disintermediate the traditional banks in much the same way that Amazon has disintermediated traditional retailers. Many believe that physical retail banks will soon become little more than showrooms, with the real business conducted almost entirely on mobile devices.

Will we see GoogleBank in the West?

4. The scale of mobile is incredible

A banal observation perhaps, because in every respect China is a land of very big numbers, but the scale of mobile usage is worth reflecting on for a moment.

China Mobile, which tops the BrandZ list with a value of $61 billion, has 750 million subscribers, making it the largest mobile provider on the planet.

Significantly, mobile has already overtaken the desktop as the primary means of accessing the web. In China, as in other fast-growing markets, the era of the desktop has been short-lived compared to Western countries.

Official estimates suggest that three quarters of China’s 591 million internet users access the web via mobile devices. In 2012 the Chinese bought 213 million smartphones, a figure that is expected to rise to 360 million this year.

For marketers, this means China (the world’s largest smartphone market) is the place to watch: Hugo Shong, one of the leading Chinese venture capitalists and a WPP director, believes that a penetration of 400 million smartphones could be the tipping point when mobile advertising comes into its own.

5. Chinese business stereotypes are out of date

There’s a persistent myth that all Chinese companies are good at is stealing intellectual property or at best replicating existing business models (just as people used to say about Japan or Hong Kong or South Korea). This is a lazy stereotype and well past its sell-by date.

Chinese companies often have a better understanding of trends in digital, social and mobile, for example, than Western counterparts, and are becoming increasingly innovative in their approach. This innovation is driven by huge demand from consumers – as demonstrated by the presence of so many fast-growing tech and telecom companies in the BrandZ rankings.

I'd like to highlight an example not on the list, though: smartphone business Xiaomi (a private company and therefore not eligible). Its CEO Lei Jun is often referred to as the Steve Jobs of China (a moniker he dislikes), the company has been accused of copying Apple, and it has an Android-based operating system.

In truth, though, Xiaomi is forging its own path. Its business model relies not on handset sales but ongoing services to the user, such as accessories and apps, and it has recently launched a TV box. The company also incorporates the views of customers into design and software development, releasing an update every week based on feedback from its core user base. As The Economist has pointed out, a far more democratic approach than that of its US competitors.

Xiaomi launched its first Mi smartphone in October 2011. At $10 billion, after only three years, the company is worth more than Nokia’s handset business and has recently overtaken Apple’s market share in China.

Xiaomi is just one example of a growing trend, a trend that will see China become the origin of various disruptive changes in the current structures of global business – and challenge many a complacent Western assumption in the process.

Let's call it what it is: shopping madness. And that means it's shipping madness too. Shoppers are surfing, buying and sending from the comfort of their homes. But behind this "virtual" shopping is the very real world of logistics playing out in the background that makes that special gift you clicked online actually appear at someone's house.

So let's talk about the decidedly unsexy topic of distribution centers, which is actually the linchpin of any retailer's fulfillment capabilities. Amazon is best in class here because they've built more distribution centers (DC) than their competitors to guarantee next-day delivery from almost everywhere. This logistics issue is absolutely critical if companies want to deliver on the promise of "me-commerce," which is the ability of retailers to get the right product to the right individual customer at the right time. Check out the exhibit below that shows what sort of coverage DCs can provide.

As companies become ever more responsive to and informed by their customers, their range of interactions will continue to expand. Those customer interactions hit many different parts of the organization (call center, sales staff, web sites, mobile apps, etc.). Since those interaction points are often owned by many different parts of the organization, the customer experience is often disjointed, inconsistent, and unfulfilling. Those experiences need to be integrated into consistent customer journeys. That’s where marketing comes in.

Here are three areas where marketing can really make a difference:

Provide relevant insights: Big Data and analytics have opened the door to mind-blowing insights about customers – how they behave, what they like/don’t like, what they’re interested in, etc. While carefully staying within the bounds of privacy parameters, marketers can know so much more about their customers than was possible even two years ago. Marketers need to identify, bundle, and serve relevant insights to the various parts of the organization. Insights are the foundation of any commercial strategy. Those insights, in fact, provide a vocabulary that the organization can share across silos. Data – and the insights derived from them – become the lingua franca of the organization.

Create valuable connections: CMO's know their effectiveness will increasingly lie in a brand's ability to make the execution happen at the front-lines of interaction with a customer. But marketing cannot control them all. What that means is that marketing will need to tighten their partnerships with sales, service, and product development around all sorts of things, such as how the brand should handle personalization and privacy. Service organizations, usually under the COO, now need to also coordinate with marketing as the volume of requests coming in through social media blurs the lines between what is remediation help and selling support. CMOs will need to increasingly guide IT on what their priorities should be for investing in new technologies that drive personalization and new experiences. Marketers are helping CFO's understand that "working media spend" ratios no longer define the efficiency of marketing operations when more investment has to go into content for owned and earned media. 

Deliver performance excellence: Beyond creating tighter relationships, CMOs and marketing in general will need to help various other parts of the organization connect with each other. Product design should be working closely with sales. Marketing can be the glue to help bind these groups together around a vision based on deep customer insights and a clear go-to-market strategy. That growth comes from having balanced and connected marketing and sales capabilities. We have found that companies with that profile perform 2x to 3x better than the market in terms of revenue growth. And while only 14 percent of companies in a separate survey believe they have the right investment levels across their capabilities, almost 2/3 of that group has much greater confidence in their ability to beat the market compared to those that aren’t investing effectively. When the organization can effectively work together better, marketing becomes a “performance multiplier” for the entire business.

These are all fundamental acts of giving. But unlike ending of “The Giving Tree” (a great book, by the way, as any parent knows) where the tree wilts away after giving away so much, the marketing version will enhance marketing’s influence. If marketing can really deliver on insights, design great experiences by pulling together the right parts of the organization, and then deliver those services and products at the right place and time to the right person, then marketing will see its influence increase significantly. I’ve seen it happen at a number of clients already. In 2014, I expect to see that giving role for marketing expand.

It’s time for a new way of thinking about Viral. Viral 2.0. Here are 4 laws to guide your thinking.

1) More Than Online

Social media is great. Technologies like Facebook, Twitter, and LinkedIn have made it faster and easier to communicate with large numbers of people very quickly. Heck, without them, you probably wouldn’t be reading this article in the first place.

But as I talk about in Contagious: Why Things Catch On, only 7% of word of mouth happens online. That’s right. 7%. Most word of mouth is actually offline. Face-to-face interactions around the dinner table, the watercooler, or while watching sports.

So when thinking about how to generate word of mouth and get something to catch on, don’t just think about social media. Think about offline as well. How can you get people talking and sharing, online and off, so that word spreads about your product or idea?

2) 10 Million Views Doesn't Matter

Everyone would love to have a video that gets 10 million views. Your boss would be happy, you’d get your 15 minutes of fame, heck, you might even get promoted.

But one flash in the pan hit is not enough (anyone know where Rebecca Black is now?). And in shooting for these big numbers, companies and organizations lose sight of the much more important goal: turning customers into advocates. 10 million views is great, but the real goal is to get more people talking, sharing, and driving business growth. If every one of your existing customers brought in just one new customer, your business would double. You’d be ecstatic (and so would your boss). So while 10 million views is exciting, focus on the much more useful (and reachable) goal of getting more people to talk and share.

3) Shares Are More Important Than Views

When people talk about a video going viral they’re usually referring to the number of views. A million views in three days. 100 million views overall.

But while views are an easy metric to track, they’re the wrong one to focus on. Something can have a million views not because it’s particularly viral but because the company paid to have the video featured on many websites. Or because they showed that same ad on a TV spot. Further, views are passive. Just because someone clicked on a link doesn’t mean they watched it or took any subsequent action.

Share rate is a better metric. What percentage of viewers shared the video? 10%? 20%? 50%? This batting average is more informative. It says whether people who see the content actually pass it on, or whether that content just has a big budget behind it. Anyone can buy views. Truly contagious content generates engagement.

Just divide the number of shares by the number of views and you have a much more accurate measure of how “viral” content is.

4) Not Just Viral, Valuable Virality

Viral content is fun, but it’s only useful for businesses if it helps the company, organization, or individual that made it. In 2009, Evian posted their “Roller Babies’” ad that featured what looks like babies performing a series of amazing roller-skate aerobatics. Over 55 million people viewed the clip. But, when Evian looked at how the ad impacted sales, there wasn’t much of a bump. In fact, Evian lost market share and sales dropped almost 25% in the US.

The problem? The video has nothing to do with Evian. People loved watching it, and even sharing it, but it could have been for any one of dozens of products or brands. Roller skates, diapers, skin cream, etc. Viewers didn’t connect the video to Evian.

Viral is great, but valuable virality is better. Content people share that also increases sales, boosts product evaluations, or in some way helps the brand. If people can’t connect the content to the brand, or remember who made the video in the first place, the content ends up just being entertainment

Viral is a powerful idea, but some aspects of the message have gotten lost along the way. So it’s time for a new approach. Viral 2.0. Crafting contagious content will still help you and your business succeed, you just need to approach it the right way.

Here are my own predictions about what customers will be like in the year 2020:

Time and attention span will be more precious than ever, and no one will have the patience to deal with untrustable companies, in much the same way as today’s customers have no patience for companies that can’t respond to a problem, whether they raise it by phone, email or Twitter.

Customers in the year 2020 will expect every business to proactively protect customer interests. It will no longer be sufficient simply to ensure that your pricing is fair and your terms clear. They’ll expect you to warn them if they’re making a mistake, paying more than they need to pay, buying more than they need to buy, or doing anything else they might regret later. Why? Because that’s the most efficient use of their precious time. And besides, by the year 2020 that’s what all the best companies are doing.

"Social filtering" – checking the opinions of your friends, or the friends of your friends – will be a robust and fairly well automated activity, because there will be 25 to 50 times as many opinions and reviews posted in 2020 as were posted in 2013.

Today's minority of consumers, typically younger, who always look up product reviews and often check the opinions of their friends before buying, are what researchers sometimes call "early adopters." But by 2020, the vast majority of people in the world, including even those in less developed countries who aren't plugged into the Internet in 2013, will be like 2013's early adopters.

The consumer of 2020 who we consider to be an early adopter will be pushing the envelope a good deal further. She will almost certainly be wearing the computer she now carries as a smartphone, perhaps as a set of glasses or even contact lenses. When she sees a blouse she particularly likes, her wearable smartphone-computer may even detect that she likes it because her retinas dilate slightly or her pulse quickens. After checking prices at her preferred locations, the computer will set the order up for her, and just wait for her OK.

We’ve come up with a short list of trends that we think will have the biggest influence on B2B marketing plans in 2014. While not exhaustive by any means, here are five B2B marketing trends to watch.

Last year, Gartner released a study that claimed that by 2017, the Chief Marketing Officer would spend more dollars on technology than the Chief Information Officer. Regardless of whether that claim will be fully realized, the reality is that marketing departments in 2014 will continue a trend of investing in significant technology out of their own budgets as more and more marketing is done in the digital space and better tools become available. Everything from content managed websites to marketing automation software, CRM systems, social media management tools and project collaboration software are helping to make marketing efforts more effective and efficient.

The revolution of mobile is happening in a big way and the impact on consumer behavior—even B2B buyers—is going to have a big impact on B2B marketing best practices in 2014. According to a recent study from the Pew Internet & American Life Project, two-thirds of mobile owners in the U.S use their phones to access the Internet and check e-mail—a number that has doubled since 2009. And a growing number of users (21%) are using mobile as their primary Internet-viewing device.

Further, a report from the IDC states that by 2017, 87% percent of Internet connected device sales will be smartphones and tablets. The point is, the growing dependence on mobile will make the need for mobile friendly websites, email and content absolutely mandatory—making the utilization of responsive design a must in 2014.

We’re in the midst of a fundamental shift in how companies approach marketing and content marketing is at the center of that revolution. And while some of us have been a part of the content marketing movement for some time, content marketing has still not reached mainstream status—at least not in the true sense of the term. Misconceptions still exist in the marketing community at large about what content marketing really is. And many companies have failed to put together a true strategic foundation for their content marketing programs.

Nevertheless, in 2014 there will be a greater awareness of content marketing at the executive level and more pressure on marketers to not just create content, but establish strategic, sustained and measurable content marketing programs.

Google quietly released Hummingbird, their latest algorithm update, a couple­ months back. And while the update represents as close to an entirely new algorithm as they’ve had in 12 years, marketers should focus less on the details of the update and more on the philosophy that’s driving the changes in the first place. Hummingbird increased Google’s focus on “semantic search,” giving the search engine a better understanding of concepts, meaning and intent, instead of just focusing on individual keywords—all to provide relevant, high-quality resources for search queries.

This means that in 2014, marketers will continue to focus less on keywords and more on creating quality content aimed at answering specific, long-tail questions and search queries of a particular target audience. Marketers will need to deeply understand the questions and concerns of their target audiences in order to write content that provides answers for what they are searching for.

Social media in the B2B space has had a slower start than its B2C counterpart. And while most B2B companies are using social media to some degree, the practice overall is going to see changes for the positive in 2014. One of the changes coming is more widespread usage of sophisticated social media measurement tools that better track how engagement and interactions have contributed to lead conversions and sales.

Additionally, social signals are predicted to have greater influence on SEO in 2014. Add to these the growth of mobile usage and the rise of content marketing and social media is something that B2B marketers simply have to get right. These trends continue to underline the importance of establishing a documented social media marketing strategy and growing your reach and influence on the social channels that are the best fit for your business.

These are just a few of the B2B marketing trends you should expect to see on the rise in 2014. While there are others, we believe these are the ones that are likely to have the most ongoing impact to B2B marketers this coming year. What did we miss? Feel free to add to the conversation and share your additions in the comments.

There are all sorts of wonderful things built into social media marketing that you won't have built into traditional one-way channels. There are:

...

You want to know the ROI of social media?

Number one. It's the ability to listen. It's priceless. Not with some damned tool that measures sentiment or finds influencers, either. Really listen.

Number two. Serendipity. It's opening yourself up to constant and amazing opportunities to participate and by participating, you will find numerous opportunities to lead the conversation and make a great impression. Oreo's dunk in the dark tweet is a great example of this. They are doing a really great job of being a relevant brand again by seizing opportunities like that. Do they do it every single day? Nope. But when they do, they nail it.

Number three. Community instead of merely customers. The difference is incredible. If you have patience and build a community instead of just a customer database, you will have finally tapped into that magical word of mouth network you wanted to buy a few months ago. But this time, it's real and authentic and it spreads.