Since the concept of "Artificial Intelligence (AI)" was first introduced at the Dartmouth Conference in 1956, 68 years have passed. However, the emergence of ChatGPT at the end of 2022 brought AI truly into the public eye. Currently, AI technology is evolving at an astonishing speed, continuously giving birth to new industries and business forms, bringing about global changes in productivity, society, and culture. We have entered a new era where AI is deeply embedded in various industries.
Driven by rapid technological development, the combination of AI and marketing is destined to cause disruptive changes. Today, major internet and marketing companies are all laying out AI-related businesses, but there are still few listed companies that focus directly on AI+marketing as their main business. An analysis of the "AI+marketing" related concept stocks in the A and Hong Kong stock markets may provide a deeper understanding of how to invest in this track.
From AIGC advertising materials to AI interaction + AI workflow, the "AI+marketing" revolution has entered deep waters.
In the marketing industry, the huge potential of AI technology in improving execution efficiency and optimizing marketing effects has been widely recognized and is gradually becoming an important tool for marketing promotion, also promoting the comprehensive upgrade of marketing productivity and production relations. As a new thing, the application model of AI+marketing is still in the exploration stage, and all market participants are "feeling the stone to cross the river". However, due to the differences in talents, technology, data, resource reserves, etc., among various companies, the progress speed in the industry has shown obvious differences.
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At present, among the listed companies on the A-share market, those involved in AI+marketing business mainly include Focus Media, BlueFocus, Leo Group, Zidoo Shares, Zhejiang Wenlian, Easy Point World, Three People, Yuanlong Yatu, Global Printing, etc. Among the listed companies on the Hong Kong stock market, the highly concerned one is Quzhi Group, which was listed this year as the "first stock of AI interactive marketing", and its exploration in AI+marketing is quite advanced.
Looking at the combination of AI technology and business, the above 10 listed companies can be divided into three stages:
- The first stage: mainly focused on content production, using AIGC technology to assist in the creation of marketing content companies; represented by Focus Media, Zidoo Shares, Zhejiang Wenlian, Global Printing.
- The second stage: on the basis of content production, further connecting it with marketing strategies or distribution mechanisms, using AI technology to promote the optimization and efficiency of the entire process, forming AI workflow companies; represented by BlueFocus, Easy Point World, Leo Group, Three People, Yuanlong Yatu.
- The third stage: on the basis of building an AI workflow internally, also innovating in external marketing methods, and successfully launching AI marketing interactive terminals, currently only Quzhi Group.
Specifically, in the AIGC+content creation field that all 10 companies have entered, most companies are not satisfied with directly accessing external large language models, but choose to build their own industry small models through professional model design and data training to better meet business needs and build competitive barriers. The effectiveness of self-trained models largely depends on whether the company has a rich accumulation of data based on marketing content and product information.For traditional marketing companies that focus on advertising placement, their marketing data is primarily based on the execution data of advertising placements. The content of the ads is usually stored in the form of images and videos for a short period, resulting in a relatively small scale and low degree of structuration of the accumulated content data. This makes it more challenging to train their own models. Taking Focus Media as an example, according to public information, its models are mainly trained based on books recommended by advertising experts and use customer sales champions and loyal customers for manual annotation feedback. This indicates, to some extent, a lack of content data reserves and professional technical personnel reserves. Currently, Focus Media's trained vertical models only support the generation of advertising slogans, showing good performance in fluency and logical rationality. However, for the creative and hot-spot pursuing advertising marketing industry, whether this model can be applied on a large scale to actual business still remains to be observed.
For companies with a higher degree of digital intelligence, such as BlueFocus and Quzhi Group, they have better data resources and a foundation of technical talent reserves, which can help them quickly enter the training of industry-specific small models, thus taking a leading step. Among them, Quzhi Group benefits from its one-stop new product incubation model, possessing a full chain of data accumulation including advertising effects, sales performance, and product usage feedback. This is superior to most marketing industry enterprises in terms of data richness and structuration, and it also helps them achieve a deeper integration of AI technology and business more quickly.
Overall, marketing companies taking a leading step in the AI+ marketing industry transformation also means that companies can have stronger cost reduction and efficiency improvement capabilities, as well as the ability to provide more efficient and accurate marketing services for brand customers, and are expected to become the leading enterprises in the new marketing era.
The market pattern tends to be differentiated, with Quzhi Group's performance growth leading.
The AI+ marketing industry is currently showing a vigorous development trend. On the one hand, consumer attention spans are getting shorter, and advertising marketing needs to be more innovative, accurate, and interactive to capture their attention. On the other hand, policy support also provides fertile ground for the development of the AI+ marketing industry.
Taking Focus Media, BlueFocus, and Quzhi Group, which belong to three AI+ marketing stages and have the latest market value exceeding ten billion, as examples, how is the development of their AI+ marketing business?
In terms of revenue scale, in the first half of 2024, BlueFocus reached more than ten billion yuan. Looking at the products, BlueFocus's revenue all comes from internet marketing; Focus Media is the leader in domestic ladder media, with revenue composition mainly divided into building media, cinema media, other media, and others, without a specific digital marketing-related product. Quzhi Group's marketing service revenue is about 412 million yuan, accounting for 79.9% of the revenue, which is the highest proportion among the three companies.
In terms of revenue growth rate, the year-on-year growth rate of the first half of the operating income of Quzhi Group, BlueFocus, and Focus Media is 41.7%, 40.3%, and 8.2%, respectively.
In terms of profitability, Quzhi Group's profit increased by 48.8% year-on-year, Focus Media increased by 11.7% year-on-year, while BlueFocus decreased by 35.7% year-on-year.
It can be seen that there is a trend of differentiation among the participants in the AI+ marketing industry. As a rising star, Quzhi Group leads in both revenue growth rate and profitability, and is expected to break through the encirclement in the new round of AI+ marketing industry transformation, reshaping the market competition pattern.Mastering AI Interactive Marketing in FMCG: Establishing an Endogenous Growth Mechanism
The AI+ marketing industry, which is still in its infancy with the phrase "the lotus bud has just shown its sharp tip," is in the rapid growth phase of its industry life cycle. In recent years, the growth rate of the AI+ marketing industry has remained at a high level, and it is expected to continue to grow rapidly in the next few years. Quzhi Group, as a leading enterprise in AI+ marketing, is worth delving into its development path and business model to draw valuable insights.
Quzhi Group focuses on the fast-moving consumer goods (FMCG) industry, which has a high consumption frequency, short shelf life, and rapid iteration of consumer preferences, creating a huge demand for marketing. It uses innovative and interesting AI interactions to connect brands and consumers, and combines online platforms (Qunia APP, WeChat Mini Programs, Alipay Mini Programs) with an offline network of AI interactive terminals to efficiently and accurately reach end consumers.
In 2013, Quzhi Group first launched an AI interactive terminal machine and has been continuously innovating, with the current version being the sixth generation. This terminal machine integrates various functional components to achieve AI interactions across five senses: sight, smell, hearing, touch, and taste, vividly displaying products and conveying brand information. As of December 31, 2023, Quzhi Group operates 7,543 automatic terminal machines in 22 cities in China, with over 50 million registered users, of which 98.4% of the automatic terminal machines are located in China's first-tier and new first-tier cities, and are almost entirely in commercial properties with high revisit rates such as office buildings, long-term rental apartments, and shopping malls.
In terms of implementation, Quzhi Group adopts a standardized + customized marketing model, using AI interactive terminals as touchpoints to provide innovative and interesting product experiences that adapt to market updates and consumer needs, linking FMCG brands with their consumers. It continuously provides brand clients with a comprehensive marketing solution that combines online and offline, adapting to various scenarios, helping brands achieve efficient and economical customer acquisition. AI brings to marketing is not just a one-sided disruption but embeds digital into scenarios, becoming a new engine driving marketing growth. Quzhi Group, with its distinctive AI interactive marketing model, has broken through market competition and become a leader in China's AI interactive marketing field.
Quzhi Group has achieved endogenous growth through its innovative business model, strong technical strength, and leading position. By continuously deepening cooperation with FMCG companies and expanding its customer base, it has driven steady growth in overall revenue. In the first half of 2024, the company provided marketing services to 171 brand clients, an increase of 41 compared to the same period last year; among them, the number of large clients served was 30, and the average revenue per large client was 10.6 million yuan, both recording year-on-year growth. Based on this, in the first half of 2024, Quzhi Group's revenue, gross profit, and adjusted net profit all grew at a rate of more than 40% year-on-year, increasing from 41.7%, 45.0% to 48.8%, respectively, showing good growth quality; at the same time, the company's cash reserves are also quite sufficient, reaching 888 million yuan as of June 30, 2024.
Looking at the business segments, in the first half of 2024, Quzhi Group's various business lines achieved coordinated development with strong growth momentum. Marketing services recorded revenue of about 412 million yuan, a year-on-year increase of 41.1%, with standardized marketing services and value-added marketing services growing by 44.6% and 20.8%, respectively. Merchandise sales revenue was about 78.449 million yuan, a year-on-year increase of 48.8%. Other service revenue was about 24.909 million yuan, a year-on-year increase of 30.8%.
Policy-driven increase in Hong Kong stock market enthusiasm, AI+ marketing companies are sought after by the market
On September 24, People's Bank of China Governor Pan Gongsheng said at a press conference held by the State Council's Information Office that the reserve requirement ratio would be reduced by 0.5 percentage points, and a swap facility for securities, funds, and insurance companies would be created, providing about 500 billion yuan in long-term liquidity to the financial market in the first round. The Hong Kong and mainland stock markets reacted strongly, with market enthusiasm rising steadily. The policy intention is to vigorously promote the recovery of consumption and the economy, and the prosperity of the advertising marketing market is highly correlated with it, which will benefit from this round of recovery; at the same time, the integration of AI with the industry is a key direction for policy support, and the growth potential of AI+ marketing is immeasurable.
As the first AI interactive marketing stock, Quzhi Group is highly sought after in the Hong Kong market. It rose by 40.00% on its first day of listing and later rose to a high of 55.30 Hong Kong dollars, with a maximum cumulative increase of 121.20%. According to the latest quarterly review results announced by Hang Seng Indexes Company Limited, Quzhi Group has been included in the Hang Seng Composite Index constituent stocks, entering the Hong Kong stock connect, further enhancing the liquidity of the company's stock.In the mainland market, the concepts of AI+ marketing by Focus Media and BlueFocus have also attracted widespread attention. Despite recent market fluctuations that have led to some pullback in stock prices, both companies have achieved increases of 20%-35% over the past month.
This reflects the market's recognition of the AI+ marketing track. As policy effects are fully reflected in macroeconomic data, market confidence continues to strengthen, and the capital market is expected to usher in a second wave of opportunities. We can foresee that, driven by policy support and market demand, the AI+ marketing field will achieve more rapid growth in the future.