Everyone’s talking about the new world in online, but few really understand what’s happening in China. This week, I thought I’d hit the big red country to look under the Chinese interactive marketing hood. There’s a lot of horsepower in China, even if the engine is going to take a year or two to really warm up.
ad:tech Shanghai’s conference hall is reminiscent of the early days in online advertising trade shows. A handful of companies have exhibits, from American industry veterans to China specific start-ups. Many of those hoping to capitalize on the explosive growth in China have arrived on the scene.
ad:tech Shanghai represents the biggest, boldest and best in the web’s next generation of burgeoning opportunity. There are old friends like Google, Yahoo! and MSN, along with local market leaders like Baidu. Market makers and thought leaders alike agree there is plenty of opportunity in China, but there are a few things you should know before rushing out.
Tuesday’s keynote session featured Chuan Lo, MSN’s greater China regional director, touting the tremendous growth seen by MSN audiences since its launch in May, 2005. Lo noted that while only eight percent of China is online, that number represents 11 percent of the worldwide population.
The online media company and Value Added Information Service (VAS) Sina was represented by chief operating officer Hurst Lin, who noted that many western online advertising models were not successful at first. Lin said that sites have yet to agree on what constitutes a unique visitor -- citing that internet cafes still comprise a large portion of online users and report a unique IP address for multiple users. Lin also pointed out that Chinese advertisers are primarily concerned with viewing their ads on the most popular site areas, so more traditional pricing models such as those used in television and print media were implemented to accommodate advertiser demand.
Lin hoped that western online advertising pricing models held promise for the future so that Sina can continue to monetize the most popular site areas -- such as real estate and automobiles -- while avoiding formats that Chinese users complain are annoying and intrusive, like pop-ups. It’s comforting to know that pop-anythings are universally obnoxious.
Smarter shopping search
Topping the list of U.S.-based companies reaching out into the Asian market is the shopping destination, Smarter.com. Smarter announced the launch of http://www.smarter.co.jp/ and http://www.smarter.com.cn/ this week with a focus on Japanese and Chinese audiences, respectively.
According to co-founder Harry Tsao, the two markets represent huge growth opportunities and the firm is prepared to invest substantial resources to ensure market leadership. Citing the unique nature of each market, Smarter plans to focus on fashion, baby and maternity, pet supplies and sporting goods among other key categories in Japan, while Chinese will focus on 3C channels (computers, consumer electronics and communications.)
Smarter’s launch in China and Japan may serve as lesson in diligence for start-up hopefuls in any category. Many firms that might view the more established marketplace in the United States as a bit crowded stand a very good chance of achieving critical first-to-market staying power in Asia.
Smarter search marketing
Smarter’s Tsao also participated in the afternoon performance marketing session on search engine advertising. He illustrated search marketing best practices from the perspective of an advertiser purchasing hundreds of thousands of keywords.
Tsao noted that top search destinations accounted for the bulk of Smarter.com’s search initiatives. According to Shanghai-based iResearch, Baidu.com accounts for about 36 percent of search activity while Yahoo! and Google comprise about 31 percent and 18 percent, respectively.
Smarter uses a variety of key search tactics. Tsao emphasized the need for expanded keyword lists, monitoring keyword performance individually, ongoing creative testing and predictive bidding (using seasonality to bid terms up and down according to popularity) tactics.
India-based search marketing firm Pinstorm founder and chief executive Mahesh Murthy offered some insights for marketers truly seeking a global perspective. Murthy suggested that advertisers keep an open mind when approaching new markets -- trial and error in determining which strategies are most important can be critical to entering a new market. Recognizing that much of the world’s population does not speak English, keywords in multiple languages can be purchased at much lower costs than their English counterparts.
Back to natural search basics
Global Strategies Chief Executive Officer Bill Hunt, author of "Search Marketing, Inc.," described some practical and very actionable advice for natural or organic search marketing hopefuls. Hunt provided an overview of search architecture in three layers: content, coding and infrastructure.
Hunt suggested a number of key tactics to ensure natural search success including: make sure your site is search-friendly and compliant, similar to the advice offered by Google. He also noted that avoiding marketing speak, or the language of your brand, in favor of focusing on the language used by your audience will reap enormous rewards in natural search optimization.
Opportunity is knocking in China. Search activity in China is growing rapidly. iResearch predicts there will be 800 million daily searches by 2007, charging forward from 300 million in 2005 and a projected 600 million in 2006.
Many visitors have expressed shock and awe with the speed at which Shanghai itself has grown. Some hadn’t visited the city in three or four years. The old world design and character had been replaced by bright lights, modern architecture, Kentucky Fried Chicken and Starbucks.
If the speedy growth of Shanghai is any indication, we are in for a big storm of interactive growth. Some of the sessions were basic and offered a generous outline of behavior, but the Chinese market is almost guaranteed to ramp up very quickly.
iMedia Search Editor Kevin Ryan’s current and former client roster reads like a “who’s who” in big brands; Rolex Watch, USA, State Farm Insurance, Farmers Insurance, Minolta Corporation, Samsung Electronics America, Toyota Motor Sales, USA, Panasonic Services, and the Hilton Hotels brands, to name a few. Ryan believes in sound guidance, creative thought, accountable actions and collaborative execution as applied to search, or any form of marketing. His principled approach and staunch commitment to the industry have made him one of the most sought after personalities in online marketing. Ryan volunteers his time with the Interactive Advertising Bureau, Search Engine Marketing Professional Organization, and several regional non-profit organizations.
Kevin Ryan is managing partner at Kinetic Results.