It represents not only the former symbol of the Chinese emperor – nowadays, the dragon is still a famous talisman in China. The year of the dragon is affected by innovation, enthusiasm and strength. Ambitious goals can be achieved and major projects will be implemented successfully.

We want to thank our clients, our employees and service providers for good co-operation, exciting projects and the confidence placed in us in 2011. Together with you, we are looking forward to a fascinating and promising year 2012.

At the beginning of December 2011, Eric Schmidt announced at the LeWeb Conference: “By the summer of 2012, the majority of the televisions you see in stores will have Google TV embedded”.  Many dismissed his statement as being outright crazy. PC appliances manufacturer Logitech had just terminated the cooperation with Google at that time and everything looked like it is going to be a mega flop.

But it seems that Google wants to greatly push the TV development in 2012, which is why a number of old and new partnerships were announced at the CES: Sony, an integral partner for Google, will continue to be on board. LG and Samsung will join, so will Taiwanese chip manufacturer MediaTek. While Samsung did not present any Google-TV-devices, LG already showcased its newest Google-TV developments and plans to integrate Google-TV in all TV sets sold in the US in 2012. According to Bloomberg, LG plans to develop a flagship TV device in Nexus-style as a platform for Google.

The fight over the TV of the future: Will users go for Google TV? 

According to Germany’s Federal Association for Information Technology, Telecommunications and New Media (BITKOM), 5 million smart TV will be sold in 2012 (up 35% compared to last year), leading to a boom of Internet-ready TV devices in Germany. Smart TVs are TV devices that are connected to the Internet and feature apps like smartphones, thus enabling users to access Internet-based services. If the forecasts by BITKOM are to be trusted, every second TV set sold in Germany in 2012 would be such a smart TV.

Conclusion: Up to now, we do not know when Google TV will be launched in Europe. But the competition over the TV of the future gets more exciting: Apple’s iTV is rumored to be launched in 2012 as well. Both Google and Apple do have the necessary resources to distribute their own systems on the consumer market.

The world is shifting. While economic uncertainty deepens amid a continued European debt crisis and a potential one in the USA, it’s the Eastern Hemisphere, and especially China, that we have to look for tomorrow’s top urban players in the global economy, says a report from McKinsey Quarterly: More than 20 of the world’s top 50 cities ranked by GDP will be located in Asia by the year 2025, up from 8 in 2007. During that same time period, the McKinsey research suggests, more than half of Europe’s top 50 cities will drop off the list, as will 3 in North America.

There is considerable unexploited potential in the Chinese digital market:

• China has the world‘s largest and fastest-growing Internet population and the reach of the major online portals is comparable to their international equivalents.
• China is now the third-largest ad market in the world, and is catching up quickly with second-placed Japan.
• In general, the internet is growing much faster than any other medium, at an average of 14.6% a year between 2010 and 2013, says ZenithOptiMedia and within two years, the internet will be the world’s second-largest medium, with an 18.9% share of expenditures.

The influence of the Internet on Chinese people’s life is growing and China is becoming an ever more important consumer market for international companies. The digital market is huge in terms of size and potential, but companies are facing challenging requirements. With our offices in Shanghai and Hongkong we would be delighted to provide our expertise for your activities in this incredibly dynamic market!

The head of aquarius’ mobile unit, Ralf Jahns, will host the discussion panel „Location based services, mobile social media et. al.“ on October 20, 2011 at 2:15 pm. The panel seeks to investigate how much marketing potential location-based advertising, smartphone applications and mobile coupons offer and how to turn it into a reliable source for profits. Among the participants on the panel are representatives of Robert Bosch, the Senior Vice President for Business Development at Groupon, Prof. Dr. Martin Spann, Director of the Institute for Electronic Commerce and Digital Markets at Munich’s Ludwig-Maximilian- University and other experts for mobile marketing.

Tickets are available here.

Thanks to a rapidly growing economy, increasing purchasing power and, last but not least, the 1.3 billion inhabitants, China is of extremely high interest for western companies. The communicative access to well-funded target groups in China is the Internet. No Google, Youtube or ebay – the local players are called Baidu, Youku and Alibaba. Seems similar, but isn’t alike! To understand the local business culture instead of blindly following western concepts is what is needed on this market.

Read more about the Chinese market in our studies „Digital Business in China“ and „eCommerce in China – Growth I Potential I Challenge“.

Our internationally educated management team, with both European and Asian background, guarantees excellent consulting- and implementation service with strong regional and local expertise in realization and a network of specialized service providers.

Marc Finsterlin in Shanghai and his team are looking forward to your request!

‘Shazam for TV’ works similar to the music recognition formula: You hold a smartphone next to the TV screen and it will tell you which movie, show or scene you are currently watching. The whole thing works similar to QR codes, with the only difference that Shazam recognizes audio content. Broadcasting corporations like NBC Universal or MTV have been cooperating with Shazam since last year in order to mash up their formats with Shazam’s app, thereby increasing consumer loyalty.

What is interesting for the advertising business is, that Shazam can be integrated into every TV commercial. A text will appear ‘Shazam this now’, encouraging viewers to interact with what they see on the screen. As soon as the app recognizes the content, the user will receive additional information or links on his mobile phone. Whatever the user is doing then, can be tracked and analyzed en detail: “We’re now seeing companies in nearly every industry sector taking advantage of Shazam’s ‘second screen’ experience to provide consumers with additional product information or give them an easy and fast point-of-interest retail experience at the click of a button“, Evan Krauss, Executive Vice President Advertising Sales says. Big brands such as Procter&Gamble, Honda, American Express, Starbucks or Paramount already have their mobile content linked up.

‘Shazam for TV’: Bringing TV and mobile together

More examples can be found on Shazam’s YouTube Channel

Apart from Shazam, there are other competitors that seek to tap into the promising TV commercial market: iSignMedia recently launched its little Black Box. CouponIO listens to TV commercials: As soon as there are coupons available for a certain commercial, the relevant information will be forwarded to the nearest mobile device via Bluetooth. This is similar to TV ChekIn’s IntoNow. Launched at the beginning of 2011, the app managed to count 600,000 downloads in the first three months already. One of the first advertising partners was Pepsi. The company gave away free digital coupons via smartphone as soon as a related commercial was viewed on TV. Shortly after, IntoNow was taken over by Yahoo! for an estimated US$25 mn.

Conclusion: Anybody still remembering the good old days of Direct Response TV? In the beginning it was a telephone number that was displayed at the bottom of the screen, later it was an online address, through which the advertised product could be ordered.  These were the first steps towards interactive TV advertising. Companies like Shazam take the next steps into the future. It is quite amazing how their product manages to bring the mobile web and television together. Maybe both will be combined in one device soon, bringing along features like automated check-ins, connection to the brand community and measurability of user behavior during the whole experience and process. The TV commercial market is a very lucrative one. It remains to be seen what the next steps of Apple, Google et al. will be.

Apart from Google’s search engine, the Android mobile OS or Google Chrome, one of Google’s new sources for revenue is the billion-dollar TV ad business. Google seeks to do nothing less than change the whole TV commercial industry by implementing targeted and personalized TV commercials, thereby replacing traditional TV commercials, which presents one commercial to millions of viewers at the same time. Google TV had a bumpy start last year, but with the new advertising platform Google TV Ads, new cooperations and an ad campaign the project becomes now more tangible.

Personalized TV commercials via Google TV Ads

Google TV Ads was launched in 2007 and based on the successful AdWords model. Just like with AdWords, customers get to book TV commercials and choose the relevant target group according to the commercial’s content and own preferences. The existing interface stays intact and the appropriate TV channels and programs can be chosen via the well-known Targeting Tools. The commercial will be sent via the usual bid system and can be analyzed precisely via the viewer’s set-top-box reporting mechanism. Viewers can enjoy tailor-made ad spots and Google’s clients will receive a campaign analysis in real-time. This adds much value to the existing viewership figures, which are estimates only. Currently, Google TV Ads reaches 30 mn households in the US.

Conclusion: Google mastered the online advertising business to its perfection. Now, this know-how is transferred to the mobile web and TV market. At the same time, projects like Google+ feed Google with even more knowledge about its users social contacts, interests and activities. The goal is to create integrated online, offline and mobile advertising in order to wield the decisive weapons in the fight for advertising dollars. The concept of measurability is to replace the traditional paradigm of reach oriented target group planning in the TV advertising business. Even though this project is not featured so prominently in the news at the moment due to the buzz about Google+, it holds tremendous potential to fundamentally change the traditional advertising business.

 Google Promotion to acquire new partner networks

Without doubt, Google+ is the long-awaited attack on Facebook’s dominance. Larry Page himself, one of the founders of Google, led the project. Usability and design are much more elegant than its blue-colored counterpart. However, the biggest advantage is, that users can administer their privacy settings much more intuitive and with greater freedom as compared to Facebook, thereby making it easier to determine what content is shared with whom. Of course, Facebook offers this service via its lists function, too. Google+’ concept Circles though makes it so much easier: Every new contact can be assigned to user-defined social circles in just one click. A message will not be shared before the user has explicitly chosen its recipients.

Google’s wall is coined Stream. This is where users can see what their contacts are posting. Sparks is a service for posting certain topics. This is where users will post their different interests. It is likely that it is here, that advertisements will be placed in the future. Hangouts is a video chat function, which enables up to ten users to talk at a time. The alternative to Facebook’s “Like” button has recently been added as Google “+1″. And this is how Google’s “Facebook” works:

Google+: Circles

Google+: Hangouts

In May this year, Google became the first company that set a new record in the number of users, with 1 billion users. However, until recently it had completely missed the train of social media. According to ComScore (via faz.net) Google’s pages have increased their reach by 8%. The biggest growth however, was the one of Facebook. Facebook’s dominance can also be clearly determined by looking at the average time spent on the respective competitor’s pages. Time spent is one of the key criteria for graphics-based advertisements. Google already owns a vast amount of user data, however it is anonymous data. Facebook collects user data as well, but it knows much more about each user, his interests, his social contacts and activities. Google+ wants to change that and make the social web more “searchable and monetizable”. From a marketing perspective, this holds a lot of potential, because the first contact with a brand can be traced up to the purchase of a product of this very brand at a later point of time. This is a milestone for social ROI.

But the Internet is developing rapidly and Facebook already retaliates. Rumors are spreading since Zuckerberg announced “something big” for tomorrow. The industry’s insiders at Techcrunch suspect that Facebook will introduce a video chat function as well. One thing is for sure: None of the contenders will throw in the towel without a fight. It remains to be seen if a large amount of users will migrate to Google+. They need good reasons for such a step. The next weeks will show if there is reason enough.

Conclusion: Nobody can predict the outcome of the fight for the “social graph” at the moment. Whether Google+ can successfully conquer Facebook’s market shares or whether the inertia of the sheer number of users prevents a fundamental change remains to be seen. One thing is for sure though: With the introduction of Google+, the duel of the Internet giants Facebook and Google has reached a crucial point. It will be exciting to observe the coming events unfold.

US publisher Hearst Corp. focuses on print media that are sold via multimedia channels on different platforms

Expansion of the magazine business

At the end of January 2011 the company hit the headlines, when it bought the whole international magazine business of French media corporation Lagardère (102 magazines in 15 countries) at 650 million Euros. Instantly, Hearst became the world’s second largest publishing company for high-class women’s magazines. After the printing industry had seen some very difficult years, the acquisition by Hearst was considered as a sign of recovery combined with a new hope for a bright future of magazines as a prime content provider: “Magazines are going to be a part of our future as far as the eye can see”, said 78-year-old Frank A. Bennack Jr., Chief Executive of Hearst. Hearst had already launched a PR-campaign titled “The Magazine Conversation” in 2009, which aimed at generating more awareness for magazines among media consumers.

Paid-content: Next Issue Media

However, the print media’s revenue margins are constantly dropping. The question is, how to get media users to pay for digital content? Hearst’s answer lies in NIM, Next Issue Media. NIM is a digital publishing consortium of Condé Nast, Hearst Corp., Meredith, News Corp. and Time Inc., which aims at promoting the establishment of paid content in all digital channels. The publishing houses have announced their cooperation already one year ago, but put the project on hold while working on own strategies. However, since May this year the “Hulu for Magazines” offers seven magazines as a trial subscription via it’s digital newsstand on Samsung’s Galaxy Tab.

The advantage of Android platforms as compared to iTunes lies in the fact that publishing houses can keep their control over valuable user data and are able to establish their own pricing models independent from Apple. The platform is ready for more similar cooperations: Rupert Murdoch’s “The Daily” is bound to be available via an Android-based newsstand in the near future. Even though NIM enters the market with some delay and the current contents as well as the number of users are low, it is an entry into a growing market.

Next Issue Media: Mobile Publishing Business Models

“Next Issue Media is a merger of technology and content partners founded by publishers, for publishers, with advertising in mind” (Morgan Guenther, CEO NIM)

A growing market: Interactive Magazines

The rapidly growing market of tablet devices deserves special attention. In a recent research study by Oliver Wyman titled “A new digital market for publishers” the author estimates that by 2014 the market volume for interactive magazines will reach US$3 billion. Print, interactive and bundled offers are supposed to generate revenue from existing and new customers. NIM pursues a publisher-centered business model, which directly involves readers. By collecting the users’ data, it is much more attractive for big brands and their advertising business. Morgan Guenther, NIM’s CEO says: “Touchscreen media is perfect for rich interactive advertising products that drive incremental revenue growth across print and digital platforms, plus rich data analytics and reporting”.

Conclusion: What was said to be “not so mobile” turned out to become “mobile first”.  Future will tell in how far Android-based devices are able to reach an audience that is relevant enough for publishers. Undoubtedly it is interesting to see how a big US publishing house, which counted on reusing its contents in the past, has shifted its focus on the mobile business.

In the last three months of 2010, 20 of the 52 companies that went public were Chinese, USAToday found out. According to iChinaStock the share prices of the biggest Internet companies have risen by more than a third; the ten biggest companies shown in the chart below have a combined worth of nearly 150 billion US$ – that’s nearly as much as Google’s.

The share price of Baidu, China’s largest searchengine and equivalent of Google, climbed from about 60 to 150US$ in the past 12 months – reaching a market capitalization of nearly 50 billion US$. Tencent, the Chinese ICQ, went public in 2004. Their share price is now 60 times higher than it was in 2004. The share price of Youku (considered as the Chinese YouTube) jumped 161% and the one of Dangdang (equivalent to the Chinese Amazon) doubled, when entering the stock market in December 2010. Youku’s first-day gain was the biggest by a newcomer in five years. On May 4th, the Facebook of China, Renren, went up by 29% on its trading debut in New York. It was the first social network to be listed on the NY Stock Exchange. However, judging by its first quarter earnings, China’s social network is very much a small cap company – net revenues were 20.6 million US$, it had no earnings in the first quarter, instead it reported a net loss of 2.6 million US$.

Chinese Internet companies listed on American Stock Exchanges are booming
Source: The Economist

Conclusion: Some analysts cheer to the IPO boom, others are showing concerns over a potential Internet bubble in China. In fact: the influence of the Internet on Chinese people’s life is growing and China is becoming an ever more important consumer market for international companies. The digital market is huge in terms of size and potential, but companies are facing challenging requirements.

Latest aquarius studies: Digital Business and eCommerce in China today
aquarius consulting analyzed the potential of the digital economy in China in one of its recent studies titled ‘Digital Business in China – a demanding and rewarding challenge‘. In our latest study ‘eCommerce in China today – Growth, Potential, Challenge‘ we analyzed the Chinese eCommerce market and the online activities of the top 100 manufacturers of consumer goods along the marketing and sales funnel. aquarius consulting is also working together with the above-mentioned Chinese Internet companies in terms of media campaigns or eCommerce coops. We would be delighted to provide our expertise for your activities in this incredibly dynamic market!