China's SME sector is growing rapidly but the use of analytics is still nascent. Here's why.
From my conversation with Baidu, there are more than 4.5 million domestic small and medium enterprises that invest their marketing budgets in paid search during Q3 2011. Compared to 3 million SMEs in the same period last year, growth rate is increasing at 60 percent year-on-year. This sector still has great growth potential, since only 5 percent of China's 90 million small and medium companies realised the magic of search marketing and/or digital marketing.
Once more and more of China's small and medium economies benefit from online marketing, they will further rely on web analytics tools, whether it is a spreadsheet or in-depth business intelligence system, to measure results. And nowadays, Microsoft and Google monopolise the market with free tools.
Most of China's small and medium enterprises are very traditional. They simply adopt a Microsoft Excel sheet to manage their marketing efforts' ROI, regardless if the products are paid or pirated. And their "R" (returns) is always actual sales without any middle-stage metrics, which could easily make them frustrated due to the slow revenue growth or profit contribution, as they have no idea how to further optimise those activities without actual web analytics.
Depending on the industry, middle-stage metrics can include user registrations, coupon downloads, and cost-per-PV. For instance, if only a single middle-stage index becomes absurd while others remain normal, the SME client would have found the key to further optimise ROI.
Some advanced SME users have tried Google Analytics, while most of them complained about the exhaustive deployment process. Honestly speaking, Google's product is user friendly to professional users, but its SME clients here in China badly need in-depth guidance and step-by-step implementation training. Because it's usually quite difficult for local SMEs to find qualified webmasters and an IT team, especially during the debugging or exception handling process. Therefore, it becomes essential for web analytics providers to launch a Chinese version of Q&A and video guidance online. It is even better to have a call centre or hotline.
Other critical issues, such as running stability and data accuracy because of the server location, may also affect the user experience of those very local small and medium enterprises. China's small and medium enterprises need customised web analytics tool. The product should base on a heavy weight backbone infrastructure, OLAP for instance, to deliver true insights. Meanwhile, it had better be free with functions to cover clients' practical pain points.
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Michael Y. Xu has more than 15 years of digital marketing and financial services experience serving Fortune 500 clients and China's top-tier state owned enterprises in both North American and Northeast Asian markets. He joined Gridsum, China's leading online business optimization company, in early 2008 as senior vice president of business operations. Michael manages Gridsum Technology's strategic cooperation, business development, and marketing teams, while determining how Gridsum Technology would use partner connection to deliver the best results for clients and the entire ecosystem. Under his leadership, Gridsum Technology successfully initiates solid partnership with iCrossing and Microsoft. Michael worked in the Strategic Investment Department of Sinochem, China's top national oil company with 19 times entries into Fortune 500, from 1994 to 1999, where he got deeply involved with major transactions, including China Unicom, Shanghai Grand Hyatt, Suzhou Industrial Park, WEPEC, and Zhejiang Aoshan National Petroleum Base. He then joined one of China's leading real estate companies as financial controller. Michael is currently the board of director of SEMPO and the co-chairman for SEMPO's Greater China Working Group and Member of Global Committee. Through his coordination, SEMPO Greater China formed in-depth partnership with Baidu, China's top search engine. He also speaks at conferences on online business optimization and SEO/SEM. Michael received his MBA and MS degrees from California State University in 2003, and his BA degree in Accounting from Renmin University of China in 1994.
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