Home Tech Performance surged across the board, Focus Group consolidated its marketing standard position

Performance surged across the board, Focus Group consolidated its marketing standard position

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2020 is not an easy year for the advertising media industry. The “black swan” of the epidemic disrupted the placement plans of many advertisers and profoundly changed the development path of the industry.
On April 22, Focus Media announced its 2020 and 2021 first quarter results. For the whole year of 2020, Focus Media achieved revenue of 12.097 billion yuan, and net profit attributable to shareholders of listed companies was 4.004 billion yuan, a year-on-year increase of 113.51%. While maintaining rapid growth in profits throughout the year, in the first quarter of this year, Focus Media once again achieved a net profit of 1.368 billion yuan, a year-on-year increase of 3511.27%.

In the impacted 2020, why can Focus Media quickly recover and get out of the counter-cyclical market? Behind it, how is the industry changing? The other side of the whole line: the “post-epidemic” cycle of full growth From the overall performance point of view, Focus Media has almost become popular across the board. For the whole year of 2020, Focus Media’s revenue scale is basically the same as in 2019, and its profit has increased significantly by 113.55%. Basic earnings per share were RMB 0.2774, a year-on-year increase of 114.04%; the weighted average return on equity was 26.16%, an increase of 12.40% from 2019, an increase of more than 13 percentage points. If you look at it carefully, the fact that the whole line is red is more from the rapid rebound of performance. In the second half of the year, Focus Media achieved revenue of 7.486 billion yuan, a year-on-year increase of 16.6%. The growth in the fourth quarter was even more pronounced, with a single-quarter revenue of 4.222 billion yuan, a significant year-on-year increase of 30.7%. What needs to be noticed is that there are two key trends in the growth of Focus Media. On the one hand, growth is not “assault”. In the first quarter of this year, this growth momentum became more apparent. Realized revenue of 3.593 billion yuan, a year-on-year increase of 85.35%. This aspect means that the epidemic is more like a fog, covering the original performance status. Focus Media is actually in a fast-growing channel. On the other hand, Focus’s growth is not at the expense of operating. In addition to revenue, in 2020, Focus Media’s net profit margin is as high as 33%, an increase of 18 percentage points from 15% in 2019. In the first quarter of 2021, Focus Media’s net profit margin was as high as 38%, an increase of 36%. In addition, for the entire year of 2020, Focus Media’s total assets will increase by 15%, and the net cash inflow from operating activities will be 1.573 billion yuan, an increase of nearly 1 billion yuan over the same period last year. Over the years, Focus Media has continued to net inflows and its operations have become more stable. Revenue growth, better profit margins, and plenty of cash. Under the epidemic, such performance is indeed dazzling enough. What needs to be noticed is that the impact of the epidemic on the advertising industry is very obvious. According to the report “Annual Inventory of China’s Advertising Market in 2020” released by CTR at the beginning of the year, the cost of advertising cases in 2020 decreased by 11.6% year-on-year, which was the largest decline in the past five years. Why can Focus Media achieve a rapid rebound? Deconstructing growth: for effect, but for brand Disassembling the CTR report shows that in 2020, elevator TVs and elevator posters have increased significantly, with 23.8% and 28.9% growth respectively, while other channels have shown a significant decline, and even Internet video advertisements have also experienced a 18.8% decline. The same trend can be seen from Focus Media’s financial report. In 2020, Focus Media’s elevator media business will perform particularly well, taking the lead in achieving a strong recovery. In the fourth quarter, revenue was 3.894 billion yuan, an increase of 47.02% over the same period last year; The annual operating income was 11.576 billion yuan, an increase of 15.19% over the same period last year. Why has elevator TV and elevator posters soared? What are the considerations behind the advertiser’s choice? From the PC Internet to the mobile Internet, online traffic is growing rapidly, and advertisers have been exploring effective conversion paths. Under the traffic dividend, the market is generally under the logic of “traffic is sales”. From variety show sponsorships to on-screen advertisements, from mid-slot advertisements to patch advertisements, the competition for traffic and attention was the focus of competition in the past. However, with the development of the mobile Internet, the market has gradually realized that under the condition of scarce attention, one-sided pursuit of effects is gradually entering a bottleneck. On the one hand, online traffic has gradually concentrated, and the leading companies of each track have gradually gathered a large amount of resources. The price of Internet traffic continues to rise, and the cost of acquiring customers is getting higher and higher. At the same time, users’ awareness of online advertising is declining. When users see advertisements, users often swipe away at the fastest speed. Most traffic advertisements can’t reach consumers deeply, and they have converted but haven’t formed a deep understanding of the brand. In recent years, advertisers have gradually realized the value of brands when chasing traffic. Paying more attention to traffic and brand building, “product-efficiency synergy” has become a major trend. To create “product-efficiency synergy”, the brand is the foundation and the flow is the incremental space. Brand building does not rely on low-price promotions or traffic conversion, but subtle influence. In the process of continuous trial and error, advertisers have gradually found a new paradigm. Online, content marketing has gradually become a sought-after object during the epidemic. Social media represented by “double micro-flick” has used live broadcasts and short videos to deeply plant brands and drive the rise of new brands. Offline, brand detonation in life scenes has become a key link. Continuously and repeatedly expose the brand in relatively closed environments such as elevators and theaters, and rely on digitalization to achieve more accurate placement, and achieve the brand’s rapid “out of the circle”. The latter is the value of Focus. Focus Media’s comprehensive coverage of life scenes can quickly build brand awareness among target user groups. Since May last year, Yuanqi Forest has been advertising on Focus TVC. The first month it sold 260 million is the total of 2019. It was continuously put on September, and the monthly revenue of Yuanqi Forest reached 400 million yuan. There are so many cases. Using Focus Media to achieve all-round exposure of the brand in life scenes, combined with the conversion of traffic effects, can often achieve a multiplier effect with half the effort. The value of Focus Media is being gradually tapped, and if you vote with your feet, growth is a matter of course. “Double Micro, Flick, One Focus”, the new paradigm of the advertising media industry However, why has Focus Media become the advertiser’s choice, and why not other offline agencies? The key lies in several core data in the financial report. According to the financial report, Focus Media has built the largest urban life circle media network in China, and its advantages are constantly expanding. In terms of building resources, as of the end of 2020, the media network of Focus Life Circle has covered about 330 major cities in China. In addition to Hong Kong Special Administrative Region of China, it also covers more than 30 major cities such as Seoul in South Korea, Bangkok in Thailand, Singapore and Jakarta in Indonesia. At the same time, the number of media coverage points of Focus Media declined slightly compared with last year. In this regard, Focus Media stated that the company’s expansion plan has not stopped. The expansion of resource points and the optimization of existing resources are in progress. On the one hand, Focus is continuing to develop a new middle class covering 5 million terminals in 500 cities and 500 million. The goal is actively advancing. On the other hand, the optimization of invalid and low-quality points is also being continuously carried out. From the perspective of market changes, Focus Media’s position as the core position for brand building is becoming stronger. Catalyzed by the epidemic in 2020, the Matthew effect in the advertising market has intensified. Advertisers choose to invest more of their advertising budgets, which may shrink, to head media; on the other hand, traffic dividends disappear, and more advertisers choose to allocate advertising budgets to brands. Diversion. Ipsos recently released “Inventory of Chinese Advertising Slogans in 2020” shows that among the TOP10 popular, highly recognizable and mind-occupying slogans in 2020, 47% of consumers’ cognitive channels originate from TV advertisements, and 56% originate from the Internet. Of the media, 83% comes from elevator media. In addition to perfect scene construction, Focus Media also has continuously optimized delivery effects. In recent years, Focus Media is combining Alibaba’s technological empowerment to continuously promote the process of digital transformation, achieving “network pushability, real-time monitoring, data reflow, and effect evaluation”, which has greatly improved the effect of brand communication. Both accurate and efficient, Focus Media has become an indispensable channel for advertisers. This is also very clear in the financial report. The financial report shows that in 2020, the media customer structure of Focus Elevator will continue to be optimized and stabilized, and customers will cover a wide range of industries such as consumer goods, the Internet, transportation, business services, entertainment and leisure, and real estate and home furnishing. Among them, driven by the massive emergence of traditional fast-moving consumer goods and new consumer goods, the proportion of daily consumer goods customers has grown steadily, ranking first with 35.45%; the rapid development of online medical care, community grouping, corporate office communications and other fields has promoted the Internet The overall high-volume investment of such customers ranked second with 27.13%, a year-on-year increase of 45.92%. Driven by this, Focus Group’s performance in the second quarter of 2021 will continue to grow rapidly, and it is expected to increase by over 86% year-on-year. Wang Xing, CEO of Kantar China and Global President of BrandZ, made it clear: For advertisers and brands, the combination of online and offline, content-based and scenario-based efficient combination, detonated by “double micro, one shake and one focus” Brands will become the most effective paradigm for future communication. This objectively proves that Focus has secured its position as the core brand building. The rapid growth of Focus Media is essentially that this company has seized the development opportunities in the changing times and also kept up with the changes in the advertising media industry. At present, the trend of the media advertising industry is still in the process of strengthening, which also means that the growth space of Focus Media may be larger than we thought.

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