"Internet Fame" Has Become a Marketing Method. What Does That Mean? | 2017 Big Business Stories ③

Growth and bubbles pumped up by vast amounts of capital, the wealth and the problems piled up along the way, and policy directions nobody can pin down — after more than 20 years of boom, the three tangled together in this year's business world. There was no shortage of hot topics, but look closely and business logic was not what decided which companies won and which lost. This is the third piece in our 2017 Big Business Stories series.

At HKRI Taikoo Hui, the retail complex on Nanjing West Road in Shanghai, only two stores still have a line outside them every day: the Starbucks Reserve Roastery and Heytea.

When shoppers talk about those two stores, they reach for the same phrase — "internet-famous." By that measure Heytea and Starbucks are evenly matched. In the fashionable term, both are phenomenon-level stores: people don't just buy there, they talk about buying there, and they watch who else is buying and talking.

Over the past year we have watched a lot of this happen. Bao Shifu, copied by countless knockoffs; Lady M, so mobbed that it lost control of its own opening in under 24 hours. Meanwhile big companies started incubating internet celebrities of their own, or at least learning how to attach themselves to one — Alibaba's Hema Fresh, Nike signing TFBoys, luxury houses handing endorsement deals to every star with traffic behind them.

"Internet fame" is turning from a result into a method. Definitions of the term vary widely and carry both praise and contempt, yet the public reads its features consistently. It points to a short list of words: hot (everyone is watching), fresh (there's a highlight), a line (there's a spectacle), worth posting to Moments (there's something to show off), and something you want to buy.

Judging by the cases so far, small companies are better at starting a trend, while the big companies that have woken up to it are split: some still copy step for step, others already handle it with ease.

"Is There a Viral Hook?"

When the Shanghai Starbucks Reserve Roastery opened on December 6, the WeChat Index for "Starbucks" rose 435.58% day over day starting December 5, then spiked again in waves through the following week.

The store, which Starbucks calls a "coffee fantasy park," covers 2,700 square meters and holds 1,000 to 1,200 people; two rings of crowd barriers still stand at the door. On the afternoon of December 21, QDaily stopped ten customers at random as they left. Nearly all said they had heard about the place on Moments long before coming. "Isn't this Shanghai's new internet-famous spot?" one of them shot back.

One fact is plain: for more and more people, Moments now rules how information reaches them, and once something floods your feed you assume everyone is watching it. Reposting costs nothing, so it is easy to be swept in and become either a maker of the hot topic or one of the people fanning it.

Internet celebrities are one of the hot phenomena the internet produced. Their core strength — going back to what the word first meant — is producing content, which is to say information; once they have gathered a sizable base of loyal fans, they become channels for spreading it. Fans are usually the first wave of reposting and sharing, which can set a topic alight and pull in new audiences. So when you feel something has suddenly caught fire, the feeling usually comes from your Weibo or your Moments.

An anonymous social media marketing executive once wrote: "In the summer of 2014, I felt that brands were finally having to admit that social media would be the main battleground for communication. Before that, the reaction from corporate marketing departments was always: 'Is this thing even worth investing in?' Then Facebook and Instagram began publishing their numbers, and brands said: 'Wait, hold on, we don't have enough content to post.'"

He called that the tipping point into madness. Brands could not carry the cost of making social content at high frequency, which turned out to be far harder than shooting 12 TV commercials a year. "The whole industry was on edge. Marketing through the influence of internet celebrities was a new model, and brands didn't know how much to pay or how to track results."

Now big companies and big brands are all chasing the trend — not just using internet celebrities, but manufacturing internet fame of their own.

Starbucks live-streamed the opening ceremony with Taobao, Youku and Yizhibo, and its Tmall flagship store simultaneously put out a 3,999-yuan "Papa Starbucks and Friends Opening Gift Set," limited to 999 units. Live-streaming and a co-branded gimmick are both stock moves from internet-celebrity marketing.

"Without tying in with a platform, a brand can barely make itself heard now," Liu Liang, chief content marketing officer at the advertising agency BBDO, told QDaily. Clients today, he said, have no patience for brand management, and what they ask is: "Is there a viral hook?"

Liu's content department is only a year old. Its proudest case this year was a McDonald's campaign that had students post photos of their exam admission tickets during gaokao season. "Something like Nike's 'Find Your Greatness,' where you gather a crowd of athletes to say one slogan — that has become very, very rare," he said. "At most you get one heartfelt big-budget film at year-end, and that's it. Now it's all chasing hot topics, chasing viral hooks, borrowing someone else's momentum."

And internet fame is a viral hook by definition.

2017 was also the year more and more big companies said out loud that they were giving up on TV advertising. According to the global media agency GroupM, for every extra US dollar of global ad spending in 2017, 77 cents went to digital advertising and 17 cents to TV.

The bluntest version came from Adidas CEO Kasper Rorsted, who told CNBC in March: "For us, digital engagement is the most critical thing; you no longer watch TV advertising." Adidas is also among the big companies that woke up earliest to internet celebrities.

How Big Companies Fell Into Step

You will not photograph a billboard (unless it is interesting enough), but you are quite likely to share a photo of the line you stood in (even though standing in line is dull). That is the key to internet fame: the value a consumer, or a potential consumer, gets out of sharing with other people, which in the end carries the brand further and reaches more of an audience.

The restaurant business Heytea belongs to is surely one of the industries most likely to hatch an internet-famous brand these days. Those restaurants share one or several of the same traits:

At least one hit dish, seasonal limited-time items, a fit-out that obviously cost a lot of money, some celebrity or other who once dropped by — and, of course, a line. The line itself mixes a sense of participation, spectacle and herd instinct.

The same thinking turns up at big companies that are starting to wake up. Internet fame has become a path with a formula you can follow.

Nike's Breaking2 marathon attempt in May was named one of the year's 10 best ads by Adweek. We reported in detail on the event, which set out to "break the two-hour barrier in the human marathon": three world-class marathoners took the challenge, with Facebook, Twitter and Sina Weibo all carrying it live.

The race stirred up every kind of argument in track and field circles, and the time would never go into the official record books (the argument itself was part of the advertising). But as brand marketing it carried Nike a long way on the strength of a spectacle that stretched the imagination. According to Brandwatch, the hashtag #Breaking2 drew more than 2 trillion impressions in total.

In fact the marathon shoes used in the race had already carried several athletes to victory at major marathons at least six months earlier, but Nike said nothing about it, and only put the shoe — two years in development — on shelves once it had staged this large-scale challenge.

The product's selling point had been packaged as a spectacle.

Oreo did something similar with the music box it launched on Tmall Super Brand Day this year: 20,000 limited-edition gift boxes sold out by noon. Dong Xin, China e-commerce director at Oreo's parent Mondelez International, described the same starting point: "Capturing consumers gets harder and harder, and e-commerce traffic gets more and more expensive."

On celebrity endorsements, though, Nike — so good at making beautiful TV commercials — once again became Adidas's "student."

Through 2017 Nike shot ads with Wang Junkai of TFBoys, Li Yuchun and G-Dragon, among others, and in the autumn announced a heavyweight collaboration with the streetwear label Off-White, whose founder, Virgil Abloh, was long a creative consultant to Kanye West. Kanye's own Yeezy line for Adidas Originals had by then become a main engine of sales for the brand's other product lines.

Adidas also moves far more freely than Nike when it comes to collaborations. We wrote earlier about the collection Adidas released this year with the Moscow fashion designer Gosha Rubchinskiy; the two had so much in common that soccer fans, fashion people, Americans and Russians all seemed to find themselves reflected in those nostalgia-soaked clothes, and it was exactly that convergence of elements that made Adidas cool.

As big events moved online to spread their influence and celebrity endorsements were upgraded into limited-edition collaborations, physical retail — the traditional strength of big companies — also became a route to internet fame. The trick: open big stores, open flagships that exist nowhere else, open pop-ups you will regret missing.

In 2017 a New Yorker could visit Nike's newly rebuilt five-story flagship, or run into a Puma or Adidas Originals pop-up truck that had appeared on the street overnight with hip-hop blaring. At HKRI Taikoo Hui, among the first tenants in the most visible street-facing space were Adidas's and Nike's dedicated footwear stores, both fitted out in a style each brand was trying for the first time this year — stores that exist less to move product than to display it and to be talked about afterwards. Starbucks's "coffee fantasy factory" does the same job: it changes the public's fixed picture of Starbucks as a mass-market chain.

Big Companies and Small Companies Have Ended Up in the Same Market

Once the channels for information changed, big companies and small companies ended up in the same market.

The chart below shows why internet celebrities — who are a channel for distribution and a channel for sales at once — leave big companies wary and eager to work with them at the same time.

Nowhere is this clearer than in beauty and fashion. A steady stream of news reminds you that they have made money again — the latest on December 20, when the popular WeChat account Rebecca's Fantasy World launched an eponymous brand through a mini program and sold 3 million yuan of goods in two hours. We have written before about the rise of e-commerce run by fashion bloggers and about how the internet-celebrity Taobao business actually works.

Luxury brands sharpened their internet-celebrity marketing this year. They have started to understand that a collaboration with a traffic-heavy influencer needs scarcity, rather than a paid post — though most of it still takes the form of limited co-branded items: Givenchy putting out a handbag with Mr. Bags, Gucci selling a holiday collection exclusively through gogoboi's own online store, and most recently Burberry selling a limited item with Kris Wu.

The most talked-about collaboration of 2017 was Supreme x Louis Vuitton. The two brands look nothing alike; their one point in common is that both are famous for having their logos copied. By manufacturing difference, a cross-brand collaboration became the cheapest way for a brand to create a talking point and win a new market.

New internet-famous brands keep appearing worldwide — Rihanna's own beauty line, Fenty Beauty, sells itself on a huge range of shades to suit every skin tone, and takes on the big cosmetics houses head-on.

And then there are the big companies gradually learning to use the power of internet fame. It is hard to call this a step-by-step upgrade. In fact it is all happening in one market, packed into one stretch of time.

Internet-Celebrity Marketing Carries Risks Too

"Generally, an internet celebrity brings real influence to a product when she truly loves the brand, immerses herself in it, uses it, and posts about it on her own social accounts because she wants to. That builds loyalty," said Conor Begley, co-founder and president of the fashion consultancy Tribe Dynamics.

But internet celebrities, and the acknowledged super-influencers above all, mostly work with several brands at once — and by now most of them have brands of their own. The same goes for actual celebrities: do you remember how many endorsement deals Kris Wu signed this year? The latest was Nongfu Spring's Cha Pi tea.

Some companies still choose the conservative route, and McDonald's is a fair example. This year it bet correctly on the breakout online variety show The Rap of China. CMO Xu Cong told us the company raised marketing spending by 20% in the later stages and added more Moments ads. Xu stressed that her team reacted fast in execution, but the marketing itself stayed traditional: sponsor the show, run ads alongside it. "We never expected the buzz to come that fast," she recalled. "The first moment we felt a big change was probably Kris Wu's line — 'Freestyle.'"

Worth setting beside that is an accident at McDonald's in the United States this year. In April, an episode in the third season of the animated series Rick and Morty mentioned the limited-edition Szechuan Sauce that McDonald's had released in 1998 to tie in with Mulan, and viewers' nostalgia came flooding back. Fans hunted down the recipe to make it themselves, then petitioned McDonald's to bring the sauce back, and the thing kept growing. Six months later, on October 7, McDonald's announced the sauce's return at selected US restaurants — and stocked nowhere near enough. Outside one restaurant more than 1,000 people queued through the night; the restaurant had prepared 70 packets.

In a sense, that is exactly the problem McDonald's has to solve: how do you turn McDonald's into countless internet-famous restaurants?

Xu Cong said that in choosing The Rap of China what she weighed most was not traffic but the fit between the show's audience and McDonald's intended customers: "Whenever a brand picks a show, it leaves an impression in people's minds, and those impressions add up bit by bit into the brand's whole image."

Not every brand can easily drop the baggage of an image it has built with such care. The Italian sportswear brand FILA named Chen Kun as its spokesperson this year. Asked why the brand had not picked a traffic-heavy star the way Adidas Originals does, Li Ling, vice president of Anta Sports, FILA China's parent, said it was a question of FILA's "elegant" brand attribute; FILA's other spokesperson is Gao Yuanyuan, signed in 2016.

Nike, for its part, still has not let go, which is why it can look a little stiff.

These companies are afraid of losing control of how the brand's message travels, and losing control is the thing big companies least want to see.

But in the End You May Have to Remake the Product Itself — Manufacture or Buy "Internet Fame"

Beyond the channels for information turning internet-famous, big companies' product development is now being shaped by the trend as well. Put another way: if you want to be internet-famous today, you may have to remake yourself from head to toe.

In November and December 2017, Unilever, which had not launched a new hair and personal care brand in over a decade, suddenly put out two: ApotheCARE Essentials and Love Beauty and Planet. The names alone sound nothing like Unilever's Dove, Clear or Hazeline — and Clear, which came to China relatively late, in 2007, was in fact founded back in 1981.

Both new brands have the air of an Instagram star product right down to the packaging: handwritten-style type, an emphasis on natural plant ingredients. ApotheCARE Essentials is sold only through e-commerce platforms.

According to CNBC, a core team of five people developed the new brand over the past year and a bit. Piyush Jain, vice president of Unilever's hair care division, said in an interview: "Normally, creating a new product like this takes 20 people and 2 to 3 years."

This is what Unilever learned by buying a string of small companies. Over the past two years it has acquired startups including Dollar Shave Club, the star of the razor business; the Australian tea brand T2; the British tea-bag maker Pukka Herbs; and Carver Korea. What makes those startups valuable to a big company is precisely their ability to develop products that match where the market is going.

Nestlé did the same. With the instant coffee market shrinking and specialty coffee turning into a hot business, it simply bought Blue Bottle, the internet-famous brand of the specialty coffee world. The New York Times judged the deal this way: buying a majority stake in Blue Bottle helps Nestlé expand beyond the product lines it built around Nescafé and Nespresso, into a booming new industry with a loyal base of consumers — millennials.

Walmart, equally far from internet fame, sold a melon variety called Sweet Spark exclusively in the US market this June. The new variety fixed the problem of melons tasting less sweet in winter than in summer, and it was the first time Walmart had launched an "exclusive, custom-bred" piece of fresh produce — along with yellow-fleshed watermelon, cake-flavored oatmeal and other foods. All of it was developed and sourced out of a "secret lab" Walmart built at its headquarters in Bentonville, Arkansas. That air of mystery has won the lab attention and talk on social media.

Internet fame has brought more than a change in marketing. It has changed production and sales too. This is what the internet's remaking of business looks like.

Seen that way, "internet fame" may be the closest thing yet to what big companies keep calling "digitalization." The final aim, after all, has not changed: find more consumers, sell more.

Why It Made the List

Look at any single business story or event tied to "internet fame" on its own and none of them would earn a place on a year-end top-ten list. But the unbroken run of such news made it one of the year's central topics. More important, it changed how marketing works.

If advertising used to be a jukebox, where only the person holding the coin decided what you heard, marketing today is more like a dance floor packed with people: whoever you are, dance well enough and you can hold everyone's attention. In 2017 more people holding coins stepped onto that floor.

Cover image: Unsplash