China’s Li-Ning Takes on Nike, Adidas With U.S. E-Commerce Site
AdAge

Top Chinese sports brand Li-Ning is making a second pass at the U.S. market and for now their strategy is branded e-commerce.

"The biggest brand you've never heard of ... now available here," proclaims the greeting on a bold red background on www.Li-Ning.com, which officially launches Monday. The company's first English-language consumer website has already picked up some popular U.S. e-commerce tactics, like free holiday shipping and a Facebook page.

The company's founder, former Chinese Olympic gymnast Li Ning, has ambitious plans to challenge rivals like Nike on their home turf with his namesake brand.

"The U.S. is obviously important for any sports brand to have a presence in ... [and] in the short term the most cost-effective manner to reach that market, to get products to consumers, is through the e-commerce platform," said CMO Frank Chen.

Li-Ning has been in the U.S. since 2007, when it opened a design center in Portland, Nike's hometown and a regional hub for Adidas. Its first attempt at selling products through U.S. retailers fizzled because of supply-chain problems.

It's a big challenge for any Chinese brand to overcome perceptions of being a producer of cheap, copycat goods, but even more so in the sporting goods industry, where branding is key. And American consumers will see a strong similarity between Li-Ning's logo and the Nike swoosh. But the Li-Ning team, led by the straight-talking Mr. Chen, a U.S.-educated former Greater China CMO at Philips Electronics and general manager at Electronic Arts China, says the key to success lies in clearly differentiating themselves from rivals.

"If you just have the product without the branding, it's like having a car without the gas—it wouldn't run," said George Lu, CEO of Digital Li-Ning and a Chicago technology entrepreneur who's also chairman of Acquity Group. The independent digital marketing agency sealed a joint-venture with Li-Ning a year ago to form Digital Li-Ning, with a $10 million startup investment. The international e-commerce site will initially focus on the U.S.

Along with Acquity and other partners, Li-Ning plans to invest a combined $100 million on global marketing over the next five years.

Li-Ning sees its niche in the U.S. as an Eastern-inspired brand that emphasizes the spiritual side of sports, focusing on balance of mind and body over brute strength and power. To start, the company is selling products in three categories: basketball, running and women's fitness.

The marketing campaign is still at an early stage and messaging has not yet been fully developed. But as an example, women's fitness products will be marketed as sporty yet still feminine.

"There is a market segment of women who don't want to build up muscles and sweat all the time and feel they have to compete with men. They may be involved in kickboxing or whatever but it's the psychological side that we need to cater to," Mr. Chen said. "It's a very Eastern philosophy. Nobody owns that."

Added Mr. Lu: "We're not just putting Chinese shoes in a box and sending it to the U.S. We're designing entire new sets of products just for the U.S. and we've mapped out the next five, ten years," in terms of products and messaging.

For now, the company is doing exactly that, offering a selection of shoes and apparel from Chinese product lines on Li-Ning.com while the company develops products geared toward Americans in terms of sizing, design and material. New products are scheduled to roll out around the time of the 2012 London Olympics.

Publishers Challenge Audience Report: Fall Study Shows Widespread Readership Declines
AdWeek

Magazine publishers are demanding explanations from GfK MRI after its fall magazine audience report showed more than two-thirds lost audience versus a year ago, many of them by double-digits. Some year-to-year audience fluctuations are common, but the fall report was unusual. About 70 percent of the 220 magazines measured were down, according to MRI. Big decliners included Forbes, off 24 percent to 5.1 million; Wired, down 22 percent to 2.5 million; Bon Appétit, down 17 percent to 5.8 million; and O, The Oprah Magazine, down 10 percent.

Print ad buyers use the semiannual report to decide where tospend clients’ budgets, so declining audiences are the last thing publishers need. Until now, the overall magazine audience had held steady, giving magazines needed ammo at a time when newsstand sales and ad revenue were falling. The fall MRI report showed the total magazine audience down 3 percent, though.

Publishers’ unhappiness doesn’t end there, though. Some are complaining that the report under-represents their digital audience.

It wasn't supposed to be this way. Until recently, magazine measurement firms focused on their print audiences, but readers are now getting magazine content on mobile devices and online as well as in print. To that end, MRI, along with rival Affinity, has begun measuring magazines’ digital footprint, a step that some publishers hoped would boost their overall numbers. MRI’s fall report was its first to include such comprehensive data.

As one publisher, whose title saw a double-digit audience decline, fumed: “Magazines with robust readership are showing declines, and magazines with significant digital platforms are not seeing those recognized. MRI is going to have a lot of explaining to do.” Another publisher, Bon Appétit’s Pamela Drucker Mann, said it was a “challenge” to understand why Bon App’s audience fell 17 percent, given strong year-over-year newsstand sales for the past several issues under new editor Adam Rapoport.

“We did speak to MRI about this and they said it typically takes syndicated research 12-18 months to reflect an editorial change,” she emailed. “Therefore we conclude these numbers to reflect reader fatigue towards the former Bon Appétit editorial product and the exact reason Adam’s team was brought on to reshape the editorial vision of the magazine.”

Howard Mittman, publisher of Wired, said the problem was the methodology itself. MRI gathers the information by conducting in-person surveys with 26,000 interviewees. “The last wave had Wired showing a healthy double-digit increase and this latest wave has us showing a double-digit decline,” Mittman emailed. “Frankly, I believe any drops, or increases, are less a symbol of a magazine’s audience than they are a shining example of deficiencies in the research collection process itself. Do you really think a Wired reader is going to spend that amount of time completing a written and online survey? If so, they're not likely the affluent, intellectual readers we target anyway.”

Anne Marie Kelly, MRI’s senior vp of marketing and strategic planning, said MRI stands behind its research.

Congressional Vote a Setback for Obama’s Food-Marketing Plan
AdAge

In a blow to the Obama administration's plan to restrict the types of food and drinks that can be marketed to children, Congress wants to require federal agencies to weigh the cost of the proposal.

Dan Jaffe, exec VP-government relations at the Association of National Advertisers, said the administration's initiative could cost advertisers "multi-billions of dollars." He said he's pleased the administration will now have to justify the cost to ban certain ads.

"I just don't think they can," Mr. Jaffe said.

The requirement for a cost-benefit analysis was sponsored by Rep. Jo Ann Emerson, R-Mo., in a rider to the massive omnibus spending bill aimed at preventing a pre-Christmas government shutdown. The bill passed the House today and is expected to be approved by the Senate tomorrow. In essence, the rider demands that administration weigh the benefits of a possible reduction in childhood obesity with what opponents say will be a definite reduction in advertising jobs and the loss of sales for food marketers.

"It showed how significant the Congress thought the administration's proposal is," Mr. Jaffe said.

Mandated by the last Congress, the Federal Trade Commission, Food and Drug Administration, Agriculture Department and Centers for Disease Control and Prevention have been working for more than 18 months on voluntary guidelines that would bar the marketing of certain foods and beverages to children.

To fight childhood obesity, the interagency group is working on recommendations that only foods that limit sodium, fat and sugar be marketed to children. But the food and advertising industries say no one has proved a link between advertising and childhood obesity. Mr. Jaffe said the administration has also failed to prove how the new guidelines would affect the rate of childhood obesity.

"The impact would have to be very, very high to outweigh their extreme cost," he said.

Final advertising guidelines were expected before the end of the year. They were meant to be voluntary, but opponents say the initiative is a backdoor attempt to eliminate food advertising to children.

Earlier this year, the FTC weakened an original proposal by lowering the top end of the targeted age group from 2 to 18 years to 2 to 11. The FTC also reversed an earlier recommendation that companies whose food products don't meet the nutrition guidelines abandon kid-friendly brand icons, like Kellogg 's Frosted Flake's Tony the Tiger.

Zappos launches magalog iPad app
Direct Marketing News

Online retailer Zappos.com has launched Zappos Now, a digital catalog and lifestyle magazine app that includes editorial content on current fashion trends and the ability to shop directly within the app, the company said Dec. 16.

“We see incredible performance and conversion in our Zappos.com shopping app, and this app is very complementary to that,” said Will Young, director of Zappos.com. “With this app, we wanted to create more of an experience, rather than just drilling down into 60,000 products with search.”

The inaugural issue features a report on color trends and an interview with Zappos.com stylist Brooke Hyden, as well as a holiday gift guide. Users can purchase all of the products featured in the editorial pages, make notes about them and create shopping lists of items to buy later.

“We wanted to leverage the beautiful experience that an iPad offers by providing a curated experience, and to push an editorial experience around our product,” said Carrie Whitehead, user interface product lead at Zappos Now. “The idea is to have an immersive experience on the iPad that has a voice and story to it that can be shared.”

Zappos Now, which is currently available on iTunes, also includes social sharing features that enable users to share articles and products to their social media pages from within the app.

To promote the new app, Zappos is running ads on Google and Facebook, and is featuring the app on the Zappos.com homepage. To encourage in-app shopping, Zappos Now customers will get free next business day shipping without any minimum purchase requirements.

Young said that there are plans for additional social sharing features, push notifications and email signup in future issues of the magazine.

Holiday Outlook Brightens: Consumers Still Have Lots More Shopping to Do
AdAge

With just 10 days until Christmas, shoppers still have plenty of gifts to buy, leading the National Retail Federation to upgrade its holiday forecast. The group now expects holiday sales will rise 3.8% to a record $469 billion. In early October the group predicted a 2.8% increase, which fell in line with the majority of industry forecasts, which have called for an an increase between 2% and 3%.

The average consumer had completed 47% of their shopping as of the second week in December, the NRF survey found. Last year at this time, consumers had half of their holiday shopping completed. Likewise, just 8% of shoppers reported they are finished shopping, compared to 10% who were done at this time last year.

"After strong sales reports in October and November, along with a successful Black Friday weekend, retailers are cautiously optimistic that this season will turn out better than initially expected," said Matthew Shay, NRF president-CEO.

Blockbuster sales during the post-Thanksgiving period, combined with figures showing that consumers still have plenty of shopping to do now, indicate many have been buying for themselves. Self-gifting has emerged as a trend this year, as consumers snap up sale items and reward themselves after several years of holding back.

The NRF also reports that consumers have been more influenced by advertising this season. That's good news for marketers who have worked hard to craft messages that will resonate with cautious and fickle shoppers.

Nearly 20% of shoppers said this year's holiday commercials motivated them to shop at a particular retailer, the highest figure in at least five years. Shoppers also said they were more swayed by in-store and email promotions, online advertising and social media this year.

Digital Works to Lift Brand Awareness and Sales — Without Direct Response
AdAge

What better time than the holiday season to burst some popular digital retail-advertising myths? The beauty of digital is that you still have time to make last-minute changes to your campaign, if you need to.
Myth 1:It's impossible for marketers and advertisers to measure the effect of consumers' online activity on offline sales.

Reality: Not true. Advanced in-store tracking can measure everything—from increases in basket size and sales of items by household segments—and connect it to the performance of online video, rich media, display and other formats.

Myth 2: Marketers can't create locally targeted advertising for digital media, as they do with local newspaper and television ads, to drive a target audience to nearby stores.

Reality: Advanced application program interfaces (API) make local data scalable across digital media. This technology can digitize retailer print circulars to incorporate localized retailer promotions to shoppers. Consumers can be reached through online circulars, display advertising, search, Facebook and digital out-of-home ads. The technology can be customized to include store events, clearance items, inventory, catalogs, coupons, ratings and reviews and buying guides.

Myth 3: Digital advertising is most effective for direct-response retail campaigns.

Reality: Digital retail advertising has proved effective in direct-response and brand-awareness campaigns. TJX's "excuse to go to Home Goods" didn't feature enhanced direct-product and pricing information to draw shoppers into stores, but it generated word-of-mouth interest through social networking. Twitter users could tweet their reasons for visiting a store directly from an expandable banner ad.

But whatever the format, efficiently delivered, locally tailored digital advertising will produce big results for major brand retailers this holiday season—and with 45% of all retail sales expected to be web-influenced by 2014, according to eMarketer, in the future.