We live in an age of growth hacking and rock star startups taking the world by storm. As a result, many of us focus on new customer/user acquisition, even though it can cost 7x more than customer retention.

While there’s nothing wrong with working hard to grow your customer base, it’s important to remember the value behind customer retention and brand loyalty. Internal research from social analytics platform SumAll shows:



“25% to 40% of the total revenues of the most stable businesses in the SumAll network come from returning customers. Even better, steady customers help businesses weather lean economic times; businesses with 40% repeat customers generated nearly 50% more revenue than similar businesses with only a 10% repeat customers.”

Brand loyalty is one of the most difficult assets for a business to attain. Or, at least it was. We used to have to rely on customers having a great experience with our product/service, or with our employees. Now, we can give them a great experience, but most businesses still haven’t figured out how to do it.

Before we get into specific tactics that you can use to increase brand loyalty with your customers, I recommend checking out the Global Loyalty Sentiment Report from Nielsen. It’s filled with insight into what customers from different international markets and different verticals care about most when it comes to the brands/products they buy. This data could/should influence how you use each (or any) of the suggestions below.


1. Feature Your Fans in Your ContentEmbed social media posts from fans who have shared your content or said something great about your brand to their followers. Put them in the spotlight and let them know how much you appreciate them. Once they see the reciprocity, they’ll make your brand a priority and become one of your most valuable marketing assets.

Soda Stream does a great job of regularly putting their fans in the limelight through their Facebook page and on their blog. Not only are they regularly engaging their fans with contests, they are making sure everyone knows who won, and creating a lot of buzz while they’re at it. On top of that, they’ve been able to gather a lot of user-generated content they can employ in the future to bring in more fans.


2. Send Fans Something They Didn’t Know They WantedIf your fans take an interest in what you’re talking about and what you care about, it’s only fair for you to do the same. Take a look at their social accounts to see what kinds of things they really enjoy, and then send them something you know they’ll love. They’ll definitely talk about it through their social accounts and, more importantly, they’ll talk about it in person with their friends, family, colleagues, and anyone else who will listen.

General Electric sent me a pretty awesome Batman book, and I’ve referenced it in 3 widely shared articles and shown it to everyone who has entered my office.


Here are some things to look for if you’re not sure what to send:

• Look at their photos to see if there are any hobbies or activities they engage in.
• Look at their posts and profile information to see if there are any books, movies, characters, games, or activities they talk about.
• Look for conversations they’re having with other users. If they’re getting into public discussions on a specific topic, you probably can assume they know/care about it.

Don’t pick out something obvious when it comes to the gift you send. Do a little research and find something unique or, at the very least, different from what most people are talking about. (Unless they flat out said, “I would really love_____.”)

3. Take Customer Advice (and Credit Them for It)One great way to keep your customers loyal to your brand is to constantly improve. Instead of just going by the numbers, or your gut, try figuring out what your customers want next. Create a poll with a few of the ideas you’ve been thinking about and send it out via your blog, social media accounts, and email.

ALWAYS leave room for your customers to make suggestions that you didn’t list, and always offer some kind of incentive for participating in the poll. Even if it’s just a chance to win something small like a gift card or early access to the new feature, it will make a huge difference in the number of people who actually participate.

If you end up making a change or update based on your customer’s feedback, give them credit for coming up with the idea. Announce it through all of your marketing channels, and send them something to show your appreciation (don’t be skimpy).

SumAll just sent out an email asking if anyone would be interested in their new Facebook analytics. I replied, and their analyst got back to me within a few hours with access and asking for feedback. I sent over a couple things I noticed right away, and he got back to me in just a few minutes, answering my questions, letting me know what else they were working on, and thanking me for my feedback.

Here are a few great tools you can use to get feedback from your customers:

For Surveys or Polls - Polldaddy or Survey Monkey - Both offer simple setup options and user features.

For displaying the results - ChartsNinja or Infogr.am - Both let you upload spreadsheets and create cool charts or infographics you can share on your blog or social channels.

4. Give Customers an UpgradeIf some of your customers are actively and openly engaging with your brand on a regular basis, they’re the best possible people to give the full experience. If you have a product line, send them something they haven’t tried. If you have a premium service, give them the upgrade for free. The actual cost to you is miniscule compared with the impact those customers will have on their friends, family, colleagues, and social followers.

Before streaming became the best thing since sliced bread, Netflix rolled it out as a free add-on for their existing customers. It was in its infancy as a service at the time, but it allowed them to give their customers something they didn’t know they wanted. That, undoubtedly, contributed to their leading the charts for brand loyalty in 2011 and to their amazing growth since.

5. Be There When Customers Need YouYour social media channels or your blog may not be your primary channel for customer service, but they are touch points. Make sure the people manning the stations are capable of helping your customers solve common problems.

That doesn’t mean redirecting them to the customer service page. It means holding their hand while the problem is solved, helping them cut through the confusion to find the solution, or getting them directly connected to the person who can help them (without having to sit on hold or wait for an email response). Great customer service is a commonality among most truly successful businesses.

Remember that WOM (word of mouth) doesn’t just happen when you do something right. In fact,a study from ZenDesk and Dimensional Research found that people who had bad experiences with customer service were 50% more likely to talk about it on their social channels than those who had good experiences. Also, they shared the bad experience more than 5 times.

6. Help Customers Do Something They LoveDollar Shave Club recently started a campaign to “Sponsor Your Thing.” They asked their fans to tell them about something they were passionate about. Then, Dollar Shave Club actually started “sponsoring” their customers’ things.

They usually give the member whose thing is being sponsored something that will enhance their thing or make it easier to accomplish. They also include a customer’s thing on their monthly mailers that go out to all subscribers and post it on their blog and social channels.

I asked them to sponsor my band’s new album, and indeed, they are using a track on their new podcast. Even though they didn’t fund the project or help us “go viral,” they’re doing something to help me out, and I’ll probably be a lifetime customer and evangelist.


7. Give Customers Something Your Competitors Aren’tWe’re not talking discounts here. We’re talking features, services, resources, or whatever else your customers will place some value on.

Buffer does this almost daily with their blog. SumAll does it with their image library. And, Sharpie does it simply by having the superior product (IMO). The point is that, instead of providing equal value to all of their customers, they’re providing incredible value to a specific group of customers, and it’s paying off on the loyalty front.

If you can’t do it with your product or service, do it through your customer service. For example, there are multiple comic book stores in my hometown, but the owner of Shield Comics sets aside the comics he knows I’m interested in and actually hunts them down for me if he doesn’t have them already.

On top of that, he pings me on Facebook to let me know if I missed something good. Keep in mind that I had never met the owner prior to the shop opening. The first day I visited, he struck up a conversation and asked about my interests. He puts extra effort into making sure I keep going back.

8. Be More Convenient than Anyone ElseLast year my glasses broke and my car died at the same time. I was working from home in the middle of nowhere so I didn’t have the time or the opportunity to get to the eye doctor and order a new pair of glasses. Enter Warby Parker. They made it really easy and affordable for me to get a new pair of glasses quickly, and they helped me solve a few conundrums along the way.

I didn’t have to call an 800 number and wait on hold for hours, and I didn’t have to fill out a stupid ticket and wait days or weeks for a reply. I sent them a tweet, and they got back to me quicker than any other business I’ve engaged this way. I’ll keep buying from them and saying great things about them until they give me a reason not to.

Another type of convenience to consider would involve normal user or customer actions. This includes auto-billing, automatic orders, refills, and reminders. All of those little things make it easier for users to enjoy what they’re paying for. As a rule of thumb, your users/customers should spend the least amount of time possible trying to use your product or service, so they can spend the majority of their time enjoying it.

9. Solve a Problem for Your CustomerGo beyond your actual product and give them something that makes their life easier on a regular basis. Neil Patel did this with his website analyzer on QuickSprout, and Portent did it with their content idea generator.

Understand your customer, figure out what would make their life easier, and build it. When you can pull this off right, you make your customer rely on you for more than just your product or service, and that makes you almost irreplaceable.


10. Make Quality a PriorityIf you have the best product, and you keep making it better, you’re going to have loyal customers. If you pair that with any of the above strategies, you’ll be close to unstoppable. People love to feel like they have the best thing, no matter what that thing is, and they’ll do way more than talk about it if they really feel like it’s the best.

Apple fans are the perfect example. A widely shared report from 2011 showed that Apple products actually triggered the parts of their fans’ brains normally associated with religion.

If you want to build your business on loyal customers and brand evangelists, you have to do something more than the mass consumer expects. Like any other asset, brand loyalty isn’t free. But like anything good in life (or business), it’s worth working for.

Whether that means making an effort to put your customers in the limelight or offering extreme convenience is up to you. Just make sure you’re doing something that makes you hard to replace and impossible to forget.
 

Programmatic buying, native advertising and viewability combine to create a richer experienceComing off the heels of 2013, programmatic buying, native advertising and viewability all remain topical to digital display advertisers, particularly brands. Just last year, these distinct trends might have seemed like isolated enhancements. When viewed in totality, however, they reflect an advertising landscape that is evolving to provide brands a richer storytelling experience among a more engaged audience—wherever that audience might be.

A new eMarketer report, “The State of Digital Display 2014: An Industry Readying Itself for Brand Advertisers,” explores how four main digital display advertising trends will both manifest and intersect in 2014:

• The focus will continue to shift from standard display ad units to more dynamic, engaging ad units. Banners won’t cut it anymore, and brands will look to native advertising and richer content ads, such as the IAB Rising Stars, to draw in consumers.
• Programmatic direct will emerge as a primary vehicle to pair those richer ad units with consumer data. Brands will get smarter about using programmatic direct not just to automate the procurement of premium ads, but to bring that inventory to life among a more captive audience.
• Marketers will look beyond behavioral web data to better understand their customers and reach those customers across devices. Location-based and TV data have existed before, but this year, marketers will make a concerted effort to leverage this information for greater insight into consumer behaviors and apply that data to improve ad experiences across devices.
• The viewable impression standard will finally become just that—a standard. With the Media Rating Council expected to lift the advisory on viewable impressions in March, many expect the viewable CPM—a metric finally more in line with broadcast measures—to emerge as a new display pricing model.

eMarketer estimates that this year, US spending on digital display ads will grow faster than any other format as companies in the digital display advertising ecosystem seek to further prove display a compelling storytelling medium for brands. Investments will hit $21.18 billion to claim 44.0% of all digital advertising—the second-largest share. Display will surpass search in 2015 to claim the largest portion of the digital ad spending pie.

The full report, “The State of Digital Display 2014: An Industry Readying Itself for Brand Advertisers,” also answers these key questions:

• How will native advertising and the IAB Rising Stars influence display advertisers in 2014?
• How will brands use programmatic direct to integrate richer advertising experiences with customer data?
• What types of customer data will brands focus on in 2014, and what privacy implications might this have?
• How will the viewable impression affect digital display in the coming year?

This report is available to eMarketer corporate subscription clients only. eMarketer clients, log in and view the report now.




Read more at http://www.emarketer.com/Article/How-Will-2013rsquos-Digital-Display-Trends-Converge-2014/1010613#y2EpZMlVHx2ETiRS.99

MULTI-PLATFORM PARADIGM WILL DRIVE AD AND CONTENT INTEGRATION STRATEGIES
With the platform shift in full swing, businesses will be challenged in the coming year to stay ahead of consumers' usage curve and deliver them with the content they want, when and where they want it.  it will also be imperative to maintain revenue stream in core digital channels while capturing market share and moetizing emerging channels.  Doing so will require businesses to get even smarter in how they scale their content to other platforms by developing integration strategies that deliver unique offerings to advertisers.

Greater integration between delivery of content and the ability to deliver campaign in a multi-platform fashion remains a challenge, but the companies who facilitate this form of platform agnostic strategy will enhance value to marketers, simplify campaign management for agencies and gfoster greater pricing equilibrium between their content channels.  As the bridge between traditional and digital platforms, online video will play an important role in how these integration strategies materialize.

RENEWED FOCUS ON BUSINESS PERFORMANCE AND CONTENT MONETIZATION
This past year saw previous years' lofty valuations in the technology sector begin to come back to earth with serveral growth companies now trading on the public markets.  As certain stock prices softeneed following their public offerings, funding of technology companies becaume more selection with a bias towards companies demonstrating strong user growth and developing revenue streams.  Newly public companies are also adjusting to life under the Wall Street spotlight as they are asked to meet quarterly revenue benchmarks and profuit forecasts without the luxury of being able to rely on future growth expectations alone to drive their valuations.  Such renewed sobriety is an indication that 2013 promises to be the year of "show me the money" in the technology sector, not only for publically traded cpmanies but also those that are privately funded.

MEDIA COMPANIES WILL FIGHT BACK WITH DIGITAL CPMS UNDER PRESSURE
The continued downward pressure on CPMs redsulting from teh rapid adoption of programmatic ad buying is beginning to meet with stronger resistance in the industry, particularly among media companies delivering highly engaging content and coveting audiences that warrant higher CPMs.  Premium publishers will take several measures to protect the value of their invenotyr, inlcuding (1) putting it on private exchanges with reserve prices to ensure their $5 inventory does not get sold at a $1 CPM, (2) demonstrating through metrics that thier ads have higher viewability and ad engagement and (3) proving the effectiveness of their ads to drive consumer behavior, including in-store sales.

Certain large, premium publishers are also beginning to experiment with and implement native advertising-based models to deliver unique branded content at scale.  facebook and Twitter have already successfully implemented such ad units that leverage the unique value of their platforms, with the added benefit of being units that work as well on mobile devices as they do on desktop computers. Look for others to follow duit as a means of enhancing the value of thier platforms, increasing the value of thier inventory and impreving the scalability of their content.

SOCIAL STRATGY = SIMPLICITY, SCALE AND SUCCESS METRICS
As marketers continue to get a better handle on social media strategy, they will look for ways to deliver impact at scale via integrated strategies rather than rely on fragmented efforts.  While Facebook can deliver impact at scale for many large brands, other channels such as LinkedIn, twitter, Pinterest and Tumblr are gaining in impotance for different segments of marketers. The need for simplicity and the ability to efficiently run social programs will mean an increasing reliance on social marketing platforms that can feed multiple channels and deliver content at scale.  But running the programs will not be enough, as marketers will be called upon to prove value and ROI of their efforts and show how this media channel fits into a brand's marketing mix.

MOBILE PLATFORM WARS SET TO INTENSIFY
The battle for mobile platform supremacy will intensify in the coming year with the potential for expansion from two major players to as many as five.  While iOS and Android currently own 90 percent of teh smartphone and tablet markets, Windows has made it clear they are renewing their push for platform share with major investments ont he smartphone and tablet fronts.  continued adoption of teh Windows 8 platform on PCs may provide enough cross-platform synergy to drive greater mobile adoption of the platform, while BlacdkBerry loks for a turnaround with BlackBerry 10.

Other possible entrants into the platform wars include Amazon and Facebook, both of which have the potential to make a splash.  With an established position in the tablet market and rumored development of a smartphone, Amazon's completentary commerce ecosystem and content assets could be parlayed into a meaningful segment of teh smartphone market.  Facebook represents anotehr sleeping giant in this market given its heavy user engagement on desktop and mobile channels, along with an existing developer ecosystem.  This potential for greater platform fragmentation means the possbility of a multi-player dynamic in the smartphone market, resulting in more competitive marketing strategies and accelarating innovation that could further yield rapid share shifts.

(c) Comscore 2013

Before you pour money into advertising, figure out exactly how much you should spend.


Q: I've never really done much advertising for my business; I've always relied on networking and word-of-mouth. Now I'd like to launch a small campaign, but I'm frightened it will cost a lot of money. How can I figure out where to start?

A: The first thing you must do is calculate your minimum and maximum allowable ad budgets:

• Step 1: Take 10 percent and 12 percent of your projected annual, gross sales and multiply each by the markup made on your average transaction. In this first step, it's important to remember that we're talking about gross markup here, not margin. Markup is gross profit above cost, expressed as a percentage of cost. Margin is gross profit expressed as a percentage of the selling price. Sell an item for $150 when it only costs you $100, and your markup is 50 percent. Your margin, however, is only 33.3 percent. This is because the same $50 gross profit represents 50 percent of your cost (markup,) but only 33.3 percent of the selling price (margin.) Most retail stores in America (carpet, jewelry and so on) operate on an average markup of approximately 100 percent, some operate on as little as 50 percent markup and others add as much as 200. More expensive items, such as cars, recreational vehicles and houses, typically carry a markup of only 10 to 15 percent.
• Step 2: Deduct your annual cost of occupancy (rent) from the adjusted 10 percent of sales number and the adjusted 12 percent number.
  
• Step 3: The remaining balances represent your minimum and maximum allowable ad budgets for the year. At this point in the calculation, you may learn that you've already spent your ad budget on expensive rent, or you might also learn that you should be doing a lot more advertising than you had previously suspected.

Now let's calculate an ad budget. Assume that my business is projected to do $1 million in sales this year, I have a profit margin of 48 percent, and my rent is $36,000 per year. The first thing to do is calculate 10 percent of sales and 12 percent of sales ($100,000 and $120,000, respectively).

Second, we must convert my 48 percent profit margin into markup, because markup is what we've got to have to make this formula work. Most business owners know their margin by heart, but never their markup. To make the conversion from margin to markup, simply divide gross profits by cost. Dividing $480,000 (gross profits) by $520,000 (hard cost) shows us that a 48 percent margin represents a markup of 92.3 percent. Bingo.

Now we multiply $100,000 times 92.3 percent to see that our adjusted low budget for total cost of exposure is $92,300. Likewise, we multiply $120,000 times 92.3 percent to get an adjusted high budget for total cost of exposure of $110,760. From each of these two budgets, we must now deduct our $36,000 rent. This leaves us with a correctly calculated ad budget that ranges from $56,300 on the low side to a maximum of $74,760 on the high side.

Most advertising salespeople will tell you that "5 to 7 percent of gross sales" is the correct amount to budget for advertising, but don't you believe it. It simply isn't possible to designate a percentage of gross sales for advertising without taking into consideration the markup on your average sale and your rent. Yes, expensive rent for a high-visibility location is often the best advertising your money can buy, since a business with a good sign in a high-visibility location will need to advertise significantly less than a similar business in an affordable location. To prove this, just look at the example above and change the rent to $75,000 per year. In this case, the ad budget would range from $17,300 to $35,760, representing just 1.7 to 3.5 percent of sales. The formula I've given you is the only one that reconciles your ad budget with your rent as well as the profitability of your average sale. Good luck!


--Roy H. Williams--

So you have a website.  

Below are some simple website "must-have's" that may be obvious but critical to engaging and motivating your customers to help drive company sales.

1.  Location & Retail Hours 

     No customer can buy from you if they don't know where you are and when you are open.  Integrating a simple google map along with your street address can easily help your consumer find you and buy your products or services.  

2. Contact Form

     Your consumer should be giving you their name and email address at a minimum so that you can store it and email them your special offers.  Adding a physical address and birthdate could help too.  The more information you get the better for contacting them at a later time.  

3. Show Your Social Media 

     If you are integrating Facebook, Twitter, Pinterest, LinkedIn, etc. in your business, make sure you provide icons that click to your page to give your consumer the chance to view your updates.

4. Clean Navigation & Site Map

     No one has the time to click around your website all day. Make the navigation clear and concise so they buy from you and not your competitor.

5. Obvious Call-to-Action

     What do you want your customers to do when they are on your page? Let them know! Make your service obvious and unambiguous so that your offers are clear and your customer makes a purchase.

A wooden sign in the lobby of Starbucks' China headquarters lists the provinces where the company operates and the number of cafes in each locale. But the coffee chain is growing so fast that it's become impossible to maintain the tally.

"We can't update that board!" said Starbucks China Chief Marketing Officer Marie Han Silloway, bursting into laughter. "Forget it!"

Ms. Silloway, a vivacious Chinese-American raised in New York, came to China a decade ago to lead Coca-Cola Co.'s Sprite in its second-largest market. She joined Starbucks a year ago, eager to return to her marketing roots after five years at executive-recruiting firm Korn Ferry International.

Starbucks China Chief Marketing Officer Marie Han Silloway
But unlike Sprite, which was already a giant in China when Ms. Silloway joined it, Starbucks is just now gaining its momentum. The Seattle-based company has been in China for 13 years, with an initial presence largely in major international hubs such as Beijing, Shanghai and Guangzhou. There's huge potential for growth as it expands into lesser-developed cities with newly robust discretionary spending. But it also faces uniquely Chinese challenges when it comes to customs and taste. Ms. Silloway's marketing strategy focuses as much on educating the world's oldest and largest tea-drinking culture as it does traditional branding and promotions.

Starbucks expects China to become its second-largest market by 2014. The company has more than 600 stores in the country and aims to reach 1,500 by 2015. It's a growth strategy that involves opening roughly one store every day for three years.

"We've been very blessed. Starbucks has very high brand awareness to a lot of people in China, so when we go to a new city or existing city, a lot of customers know about the brand already," said Belinda Wong, president of Starbucks China.

Starbucks' greatest asset is that its target consumer in China sees it as an aspirational global brand offering an international cafe experience.

'You've arrived as a town when'
"The way you know when you've arrived as a town or city is when Starbucks arrives. It used to be McDonald's, and before that it was KFC," said Paul French, chief China-market strategist at market-research firm Mintel. "Now Starbucks is the place where you go if you have cash and want to flash it. The new middle class can sit there and look out the window and drink their Frappuccino and say, "We've made it.'"

Ms. Silloway, who works with the China offices of BBDO, JWT and Agenda on advertising and Edelman for PR, looks after the food and beverage categories and new-product innovations as well as marketing and branding. "It's a broad remit but it makes a lot of sense because it allows us to have a complete picture of how the brand shows up in total. We're always working in lockstep with operations," she said.

That integration was on display on a sunny late-summer day in the dusty city of Nanchang, as Starbucks opened its first location in the traditionally agricultural province of Jiangxi and in its 49th city in China. Five hundred miles inland from Shanghai, Nanchang is among hundreds of second-tier cities across China with major untapped purchasing power. Retailers such as Uniqlo and H&M recently opened outlets here. Starbucks is in a downtown shopping mall, between an Omega watch store and a KFC.

The grand opening kicked off with coffee education for local media. An ultra-perky barista named September told the packed room that "latte" means milk in Italian, so a latte is a coffee with milk. "American-style coffee is black coffee," she explained, "so if you order one in the morning you'll be awake and alert all day!"

By early afternoon the cafe was buzzing and packed with customers. Some ordered with ease; others asked for suggestions. Vanilla latte is a common recommendation, described by baristas as "not too sweet."

One young man with a peach-fuzz mustache wearing a Bob Dylan T-shirt ordered a coffee -- at room temperature. (It's common in China to serve water, soda, beer and other beverages at room temperature.) The barista paused, then suggested an iced coffee with no ice. The Dylan fan seemed happy with that.

In China, Starbucks is a place to sit back and relax.

High-school student Yang Yang, 16, waiting for her vanilla latte, came to Starbucks with a girlfriend. "I don't actually like coffee, but my friend invited me. It's a good place to chat with friends," she said.

At one table, water-utility employee Wan, 26, surfed social media on his smartphone while killing time until an appointment. His $5.20 vanilla latte was a bit pricey, "but it's OK because I can sit here for a while," he said. And if Starbucks weren't here? "Then I'd be sitting at KFC next door."

The customers inside Starbucks are already converts. One challenge for Starbucks is to persuade those outside the store to come in and try its -- by Nanchang standards -- exotic and expensive offerings. One passer-by spotted the Starbucks sign and asked: "What is this place? A Western restaurant?" and walked away.

Or take the government minder who was tailing this Ad Age reporter in Nanchang. Fu Xiaobin frequently talks business in teahouses where private rooms cost upwards of $200. This was his first Starbucks experience and his opinions reflect how difficult it can be to grow the target demographic beyond young urbanites.

Who drinks coffee? 
"I think coffee is more of a woman's drink, don't you?" Mr. Fu asked. "If you were doing business with a woman then maybe you could bring her to a coffeehouse. But if you were doing business with a man ... you go to a restaurant and talk business over a meal or you go to karaoke and make deals while you sing together. The idea of men talking business in a place like Starbucks ... I think that's just ridiculous."

Local food reporter Fan Yuan, who was broadcasting live from the store, pointed out another major challenge for Starbucks in China: its takeout business is minuscule. The vast majority of people go for the experience of hanging out at Starbucks.

"There's definitely some people in Nanchang who have a habit of drinking coffee every day, but they're really a minority," she said. "People want to sit here and relax. There will probably be some takeout orders, but really, it doesn't work in this market."

Mr. French, the analyst, joked that Starbucks would make more money if it gave away free coffee and charged customers by the hour to sit in its stores.

Starbucks also has room to grow its food selections. Although the company has created products tailored to Asian preferences, such as its black sesame green-tea cake roll, local competitors are more creative, offering hot meals such as curry and pasta. Others sell dessert plates with six mini egg tarts or other sweets, designed for the group dynamic.

"That's perfect for Chinese because they like to put a plate in the middle to share. Westerners just want a big fat muffin each," Mr. French said.

Starbucks' image as a trendy and modern brand helps mask the bigger question: whether Chinese will ever actually like coffee, something often described as "too bitter" to enjoy. Starbucks' R&D center in Shanghai has responded to that concern by developing popular fruity drinks such as Strawberry Soy Frappuccino and the Refresha line of juice beverages.

Jiang Shan, 28, is an aspiring restaurateur who spends eight hours a day, every day, at the Nanchang Starbucks. He is actually a coffee connoisseur from working in Western restaurants in bigger cities.

"I look around," he said, cradling a venti Americano, "and everyone in here is having some sort of icy concoction. I think I'm the only person with an actual coffee."

HOW TO RUN A COFFEE SHOP
Consumer insights for Starbucks in China:

Starbucks is a place to socialize, and most Chinese visit in pairs or groups. Seating is configured to reflect that, with large community tables or living room-style setups of couches and armchairs clustered around a coffee table.

In the U.S., many Starbucks are kiosks targeting the grab-and-go segment. But in China, stores must be spacious enough to accommodate consumers who linger for hours.

In China, Starbucks does the majority of its business after 2 p.m. "People like to come out for an afternoon coffee, a cake, meet up with a friend," Ms. Spillway said. "Walk into any Starbucks at 4 p.m. ... it will be very hard to find a place to sit."

Many Chinese offices are drab and crowded, making Starbucks a popular place for business meetings. A Starbucks meeting has the added bonus of making the host seem international and sophisticated.

Consumer education is essential. Starbucks' target consumers are urbanites interested in international experiences, and they're curious enough about coffee to spend $5 on a drink when an average office worker's salary is about $1,000 a month. Baristas are trained to teach consumers about the products, and stores regularly host coffee seminars.

--Anita Chang Beattie--

At a small industry event last week, I led a talk about the future of TV and video advertising in the U.S. over the next five to 10 years. Rather than just talking about emerging trends and leaving it there, I decided to offer up some specific predictions. As a startup guy, my job is to make bets and try to build businesses in advance of markets, or at least contemporaneously to their development. While it can be a bit perilous to go public with predictions, it can also be fun, so here are my "bets" on what the world of TV and video advertising will look in 2020:

1. Web-driven ubiquity. Television's history has been defined by constrained distribution, but that's about to change. Broadcast defined its development of sight, sound and motion programming and adverting delivered in virtually every home in America. Analog cable expanded the product in breadth and depth. Digital cable amplified that expansion. And, later this decade, TV will enter the fourth and most disruptive phase of its development, web-driven ubiquity, when TV video will be "technically" freed from its legacy TV-dominated distribution constraints. By 2020, I believe that all television will be ubiquitous, on-demand and intelligent.

2. 30-40% more video consumption. The explosion in video availability will drive even more consumption. As hard as it may be to believe, I expect total video consumption will grow 30-40% over the next seven to eight years. How is that possible when the average American already watches four and one-half hours a day? Today, most video is consumed in the home, with smaller amounts in the office or in restaurants or bars. In the future, with more screens in more places, even today's time-constrained light TV viewers will be watching more.

3. TV device will still dominate viewing. Today, viewing on the TV represents 95-98% of all video consumption in the U.S. While it will lose some share to other devices, consumers' preference for the best available screens mean that "lean-back," TV-like devices will still capture the majority of viewing. My bet is 70%.

4. Multi-channel packages will still prevail. Contrary to the views of many, I don't believe that most TV viewing in 2020 will go a la carte. No, I expect that 70% of viewing will still be tied to multi-channel subscription packages from operators and networks. Consumers have always favored "packaging" in their media and the owners of the programming have way too many long-term business interests in doing deals with distributors who will "un-bundle" their products. However, I expect extraordinary disruption in this segment of the market and believe that 50% of the "bundlers" will be new.

5. Ad dollars follow video viewing and screen impact. Sight, sound and motion will continue to be unparalleled in its ability to create customers or reinforce loyalty, and it will only get better with more ubiquity, more content and better technology. Video will continue to dominate ad and marketing expenditures and, as web-like ad technologies transform its targeting and yield management, growing its efficiency and the number of advertisers using video.

6. TV "dog" wags smaller devices "tail" in campaign bundles. Not only will TV not lose its ad dollars to the web and small devices, but most of the digital video ad spend will be bundled with campaigns anchored on TV and controlled by TV media owners. Only a modest minority will be sold and packaged for stand-alone delivery on mobile, tablet, PC or ambient devices, though out-of-home video might be an exception. Assuming that they learn how to leverage it's digital capabilities, this will keep the TV media owners and media buyers in firm control of the digital video future.

7. Audience, not just content, becomes critical for advertising. Audience fragmentation, already a problem on TV today, becomes exponentially worse with the explosion of even more screens and more content. The ability to re-aggregate target audiences at scale becomes essential for all video media sellers and buyers. No longer is it just about putting ads in relevant content. It's about finding, packaging and delivering the right target audiences across tens of thousands of networks and shows too. Surviving and thriving in ever-increasing audience fragmentation is probably the biggest challenge today's media companies and marketers will have in finding success in 2020.

8. Audience data becomes indispensable. You can't find, package and deliver target audiences without having the data to do it. By 2020, 90+% of all video ad campaigns will be "data-denominated" -- packaged, sold, bought, optimized, measured or evaluated on granular data beyond impression, rating, GRP and demographic metrics. Media owners that underpin their content offerings with robust audience data capabilities will prosper. The same for marketers and their media agencies. Those who don't won't.

9. Exacting measurement and attribution reign. All video media and advertising will be measured and evaluated at the census level with attribution and return on investment analysis that far surpasses what we have today. Media that doesn't deliver great results at the right price will go away. The same for agencies, marketers and people not comfortable operating in that kind of environment.

10. Foresight trumps insight. With wide availability of census-level behavioral data and massive, predictive computing power, data leverage moves from insight to foresight and the power and margins in media will go to those companies who predict, create and exploit consumers' future behaviors. Companies and people not comfortable predicting the future and making successful bets on it won't last long.

These are my bets for the video ecosystem in 2020. Will they all come true? I don't know. However, they are the bets I made in launching Simulmedia, so at least my money is where my mouth is. What do you think 2020 will look like?

--Dave Morgan--

EBay, owner of the world's largest internet marketplace, is looking to expand in China by teaming up with luxury retailer Xiu.com, according to a person with direct knowledge of the pact.

EBay will announce the partnership at an event on Nov. 12 in Shenzhen, China, where Xiu.com is based, said the person, who asked not to be named because the plans haven't been publicly disclosed.

The pairing marks the first major drive by EBay CEO John Donahoe into the most populous country since he took over in 2008. He'll face competition from sites such as Alibaba Group Holding Ltd.'s Taobao.com, China's largest online retailer. EBay retrenched in China in 2007, and highlighted the challenges of profiting in the nation in a January regulatory filing.

"In 2002 we withdrew our EBay marketplace offering from the Japanese market, and in 2007 we contributed our business in China to a joint venture with a local Chinese company," the company said in the filing. "Even if we are successful in developing new markets, we often expect the costs of operating new sites to exceed our net revenues from those sites for at least 12 months in most countries."

EBay, based in San Jose, California, rose 2 % to $49.22 at the close yesterday in New York. The shares had increased 62% this year before today. EBay doesn't plan to make an investment in the Chinese company, according to the Financial Times, which previously reported the Xiu.com partnership.

--Bloomberg News--