Publicis Groupe Acquires Longtuo, Aiming for a Dominant Role in China's Booming e-Commerce Market

Publicis Groupe announced this week it has acquired Beijing-based Longtuo, a digital marketing company with strong eCommerce expertise in creative, customer acquisition, marketing solutions and measurement tools. Longtuo will be part of the Groupe-owned Razorfish network and will be named Razorfish Longtuo China.

Founded in 2000, Longtuo employs 200 people throughout its Beijing headquarters and Shanghai and Guangzhou offices. The addition of Longtuo will more than double the size of Razorfish in China, which currently employs 130 people and provides e-Commerce services to clients such as Converse, Hertz, and GM Onstar.

Longtuo serves a prestigious roster of Chinese marketers, including 360buy, Kohler, Masamaso, Taobao (the country's two largest B2C e-Commerce portals) and Yves Rocher. Longtuo also contracts work for Renault, providing website development and content management, as well as traffic measurement and analysis.

Publicis Groupe hopes the acquisition of Longtuo will give them more commanding clout in China's booming e-Commerce market, which Forrester projects to be a $94.6bn business in 2012. eMarketer estimates the market to grow at more than 92% annually for the next three years and forecasts China will become the world's largest e-Commerce marketplace by 2015.

Longtuo's CEO and founding partner, SU Yi, will become Managing Director of Razorfish Longtuo China, and will report to Vincent Digonnet, President of Razorfish Asia Pacific and Executive Chairman of Razorfish Greater China.

Bob Lord, CEO of Razorfish and member of the VivaKi Board of Directors, comments: "The Longtuo acquisition establishes Razorfish as a Chinese leader in digital marketing services. By integrating Longtuo with Razorfish, we are expanding the e-Commerce services we deliver to our multinational clients, while providing all local and global marketers a comprehensive offer and proprietary tools that extend across the entire e-Commerce consumer journey."

Jean-Yves Naouri, Publicis Groupe COO and Chairman of Publicis Groupe China adds: "The forecasts for e-Commerce growth in China are spectacular. With new advances in payment technology, broadband access and safe delivery systems making e-Commerce an attractive alternative to retail shops, China has the potential to become the world's premier e-Commerce market very swiftly, outstripping even the United States. This acquisition means we're now perfectly positioned to offer our international clients first-in-class local expertise. In addition, with 70% of e-Commerce spend in China currently going to Chinese businesses, Longtuo opens our doors to a number of key clients. The Groupe is accelerating our drive to meet our ambitious targets for growth in China."

SU Yi, Founder and Managing Partner of Longtuo, concludes: "The alignment of Longtuo and Razorfish in China combines two growing concerns to create a market leading e-Commerce partner for a rapidly expanding roster of clients. We are thrilled to leverage the scale and clout of Publicis Groupe to build a stronger proposition for our clients."

The acquisition of Longtuo is another step towards Publicis Groupe's objective to double its size in the fast-growing Chinese market between 2010 and 2013. This goal is part of an overall strategy of strongly boosting revenue derived from emerging economies and from the digital sector. In the past four months Publicis Groupe has acquired four agencies based inChina: UBS (February 2012), King Harvests (March 2012), Luminous (March 2012) and now Longtuo. Since 2010, the Groupe has acquired W&K (April 2010) G4 (July 2010) Eastwei Relations (November 2010), Interactive Communications Ltd (February 2011), Dreams (May 2011), Genedigi (June 2011), Wangfan (November 2011), and Gomye (November 2011).

Australia Embraces "Gamification" as New Way to Reach Customers - Top 10 Gamification Executions

Gamification, or the use of gaming dynamics to influence user behaviour, is gathering steam as a marketing tool for engaging consumers and delivering messages. It’s been praised for its ability to help brands engage with consumers on a deeper level and step the consumer through to purchase intent. While it is still a discipline in its infancy, pioneering brands are turning their attention to it as an alternative to advertising to get their messages out. Going deeper, the technique shows the potential to redefine the customer-product relationship and involve consumers in experiences that help them develop stronger relationships with brands.

Marketing presents this Top10 looking at gamification executions, primarily from Australia but also including a few stand out examples from around the world. Game on.

10. Fruit Ninja Kinect, Neuroscience Research Australia
A version of Fruit Ninja, where players smash virtual fruit, is being used by Neuroscience Research Australia to assist the elderly in recovering from medical problems, staying fit and even preventing devastating falls. As part of the research body’s iStoppFalls program, which also uses other video games to the same effect, a slowed down version of the game is available on Xbox Kinect, allowing the elderly to play along with their grandchildren.

9. Fallen Angels, Lynx
Lynx involved commuters in an interactive augmented reality game in a subway in London in March 2011. Passengers were lured towards patches on the floor of the open concourse, which activated by sending a virtual angel to earth when someone stepped onto them. Participants could then watch themselves interact with the virtual angel on the a big screen overlooking the concourse.

8. Coinland, Commonwealth Bank
Designed for children aged five to 10 years, Coinland is a virtual world where children can learn about the benefits of earning, saving and investing money by undertaking a series of tasks, designed to help them develop financial literacy skills. Players create an avatar which represents them as they explore and interact in Coinland, as they complete tasks or jobs to earn and save coins. Players can then choose to save their coins by depositing them in the bank, or spend their coins on games and rewards. Children can play alongside their friends by adding other users to their buddy lists.

7. Dream Team, AFL
AFL’s Dream Team game is open to anyone to join for free, select a team of 30 players, and then receive point based on the performance of those players in order to go into the running for a prize pool. Participation rates in the game are high, and the AFL generates content around the game including a Dream Team show and news updates on player performance. Teams must be selected in a realistic manner, within the salary cap restrictions. Players also compete in public or private mini-leagues against friends to go into the running for the grand prize of a Toyota FJ Cruiser.

6. Nike+, Nike
Nike has essentially taken a lone sports in running and other training pursuits, and made them social with its suite of Nike+ applications. For example, the Nike+ tag running app, links running directly with social gaming, pitting users who have downloaded the app against each other in a game of tag. Nike’s gaming strategy makes it easier for people to get motivated to exercise, by using gaming mechanics such as rewards and trophies in return for challenges met, incorporating the social element of competing against friends.

5. Re-Mission, HopeLab
Re-Mission is a video game developed by HopeLab specifically for adolescents and young adults with cancer. Players of the game pilot a nanobot named Roxxi as she travels through the bodies of fictional cancer patients destroying cancer cells, battling bacterial infections, and managing side effects associated with cancer and cancer treatment. Messages delivered through this game hit home, to the point that kids involved in the game were more likely to take their tablets and had better recovery rates than those that didn’t.

4. Sparx, New Zealand Ministry of Health and University of Auckland
SPARX is a self-help computer program for young people with symptoms of depression. A 3D fantasy game, it was was developed by adolescent depression specialists from the University of Auckland, to engage youth in a self-learning depression management program. Players learn cognitive behavioural therapy techniques for dealing with symptoms of depression by travelling through different stages of the role-playing game geared at addressing different aspects of the illness. Results from the trial of the game found it to be more effective than medication and as effective as face-to-face treatment.

3. Investorville, Commonwealth Bank
Combining actual market data with innovative technology, Investorville is an online simulator that lets users try their hand at property investing without risking their own equity. It’s an engaging way for the bank to deliver complex messages around investing and whet the appetite of consumers thinking of taking on an investment property. The site has had over 100,000 visitors and of those 23,000 have taken the time to register and enter their details into the game, resulting in 630 loans. The game also supported the position of being technology leaders that CBA is gunning for, and resulted in significant PR for the business with editorial coverage in 88 pieces reaching an audience of 6.6 million.

2. Taste Invaders, Moove/Masters/Big M
Created by RedLever, interactive augmented reality game Taste Invaders enabled event goers to participate in a game where they watched a screen that showed themselves with virtual milk cartons falling around them which they needed to catch in a butterfly net. The experience developed for Lions’ milk brands Moove, Masters and Big M’s, visited three states alongside giant sculptural ‘Mphones’, which added to the visual spectacle and entertained the crowd with music.
The buzz factor of augmented reality appeared to capture the attention of the milk’s brands’ target audience, integrated new technology with simple, fun gameplay.

1. Jay-Z: Decoded, Random House Publishing Group (RHPG)
For the launch of Jay-Z’s memoir Decoded, RHPG launched using a unique social game that attracted public interest and incentive. Engaging the curiosity of customers, pre-released pages of the memoir were printed on various surfaces and hidden around the world – from food wrappers to the silk lining of a Gucci jacket. Conducted as a partnership with Bing and headed by New York ad agency Droga5, the campaign aimed to get an audience not known for reading books interested in doing so. Over 300 pages in 600 placements in 15 locations worldwide were hidden, for players to find, assemble and decode the book together online before its release date.

APAC Tech M&A Q1 Down, But Value Up

The number of technology merger and acquisition (M&A) deals in Asia-Pacific and Japan in the first quarter in 2012 dropped by 33% from last year to 33. However, the average value per deal increased by 123%--far more than any other region, according to a study.

According to the report by Ernst & Young (E&Y), Asia-Pacific and Japan buyers were particularly acquisitive of out-of-region targets, especially in the United States.

Geographic expansion was prevalent, as roughly two-thirds of deals involved out-of-region targets, noted E&Y.

The report noted that expansion beyond a sluggish home economy motivated the purchase by Japan's NEC of US-based Convergys. It was one of 10 regional deals that targeted U.S. companies. Japanese buyers acquired only one domestic target, five U.S. targets, three in India and one in Argentina, according to the study.

"Aggressive cross-border M&A by Japanese companies, encouraged by the country's strong currency, was seen in other industries last year but until 1Q12 had not been as visible in technology M&A," stated E&Y.

Deals in line with key mega trends
The report also noted that the top deals illustrated the region's alignment with key mega trends.

"Deal-making in Asia-Pacific and Japan in 1Q12 focused mostly on strategic technologies such as online video, Software-as-a-Service (SAAS), mobile advertising and application development for mobile platforms," said the company.

It cited the example that smart mobility drove two of the top five deals by dollar value: SingTel's purchase of U.S. mobile ad firm Amobee, and RDA Microelectronics's acquisition of Coolsand.

"The SingTel deal is an example of a non-technology company buying mobile advertising campaign management and analytics software, thus expanding into technology-enabled services with high growth potential," stated E&Y.

The largest deal by dollar value saw China's top online video site, Youku, acquire its main rival, Tudou, in a transaction worth US$1.1bn.

Optimistic outlook
The total value of the 33 deals was US$2.04bn--up 26% from last year. This compared with the global total which fell 12% year-on-year to US$25.1bn. The total volume of announced deals in the quarter was 756, including non-disclosed-value deals, up just 1% from the same period in 2011.

Joe Steger, Global Technology Industry Transaction Advisory Services Leader at Ernst & Young, said in a statement: "Even though technology M&A activity is down year-on-year, it's doing a lot better than M&A in other industries."

"During the first quarter of 2012, the same disruptive mega trends that have been fueling global technology M&A since 2009 are now sustaining technology M&A against the continuing macroeconomic pressures that are holding back other industries," said Steger.

He added that macroeconomic pressures will hold global technology M&A activity to flat or slow growth in 2012.

"But the fact that technology M&A is off to a much stronger start than in most other industries demonstrates once again that social-mobile-cloud, big data and blur are driving strategic transactions and enabling innovation throughout the global economy. And over the long-term, M&A growth will remain a relatively safe bet for the technology industry because of these megatrends," Steger added.