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China Internet Scene: A Whole Different World!

  |  June 26, 2012   |  Comments   |  

Chinese Internet is not complicated. Remember, it is a seller's market.

I always love the following questions from my global peers:

1. How is Yahoo or MSN doing in China? 2. How is Google surviving in China, with Baidu being super dominant in the country? 3. What are you connecting with the rest of the world with Facebook and Youtube blocked in China?

Ok – the third one is easy. We can access Facebook or YouTube through VPN. Shhh...!

In my previous article, China Internet Advertising 101, I shared that China is a seller's market but we still have people asking to understand more, so I'm here to share some more of it.

1. Portals are always the industry drivers.

Forget about Yahoo and MSN in China. Don't get me wrong - I am a big fan of both. I use MSN IM every day and I have Yahoo as one of my homepage tabs. Similar to U.S. Internet users, Chinese users are sticky to sites that provide personalized products, for example instant messengers and email services. Exactly like MSN and Yahoo, all portal sites in China offer personal products like email and instant messaging.

Netease (163.com) is known as the No.1 email service provider in China. QQ, if you may recall, was originally named OICQ. Sound familiar huh? QQ is undoubtedly holding the biggest user base with its instant messenger penetration; not only in major cities but also all the way through lower tier markets. Sohu, unfortunately is always known as "The No.2" in most product rankings. Well, at least they're very consistent being very competitive in developing all sorts of products catching up with the No.1.

Sina, among the 4 top portals, is the "big brother" – the most official one. Imagine in a family of four kids and there is always one being a housekeeper? This kid never does anything wrong. He is rarely the parents' most spoiled child. However, parents always trust him. He's the role model in the house. Yea, that would be Sina, the big brother in our Chinese portal family.

This happened more frequent than I could recall. When I wanted to recommend my advertisers a special format or ad hoc ad-serving request, media sales representatives would respond to me saying, "We will agree if Sina agrees." I have pushed all ad-serving or third-party tracking companies to get them white-listed via passing some technical testing with Sina.

To most third-party tracking companies, once you get approved by Sina, i''s like you get a free pass to the rest of Chinese Internet Wonderland. Other sites would not have much problem accepting your tags.

It's not always sad. You still have to keep an eye on these portals though. They have the biggest leverage once getting to new product development. All portal sites have launched their micro blogging (the Chinese version of Twitter aka Weibo) products and can leverage their existing user base. That's why Sina and QQ have been growing their Weibo platforms so fast and the same goes to video channels. They have the financial leverage to negotiate and buy copyright from big TV stations and movie companies, therefore the exclusive content on their video platforms to attract audience.

Whenever there is a new Internet service in the global scene, portals are the first to launch the similar in China too. This is the ecosystem in China Internet scene. Big portals drive the industry.

2. Search becomes the first entry of the Internet.

Of course you all know about Baidu being the No.1 search engine in China. It possesses close to 90 percent market share. I personally am very upset every time someone presented the search engine landscape with a clear indication saying Google is dropping, declining, or perhaps withdrawing from market. I have to give Google more credit though having worked with different clients from hotel industry, and fashion and luxury brands, etc.

Performances from Google are generally far better than Baidu in terms of actual conversion. However, it is true we are referring to a much smaller group of users who are likely to be more affluent and possibly on-target to upscale brands and products. That said, I want to remind all brand marketers in China not to offset Google's influential power, at least in the coming year or two.

There are also a lot of other vertical search engines that advertisers should remember: Qunar (unfortunately also acquired by Baidu recently) for travel products like air tickets and tour packages. Users also love going to eTao under Alibaba group as an online shopping directory. Everybody loves convenience and search engines play that role just right.

To marketers - make sure you have a deeper search strategy and think more than just Baidu and Google. Think vertical!

3. Social and mobile cannot be separated.

Every marketer talks about mobile. You look at the mobile penetration in such a developing market and you would want to be in it. No doubt, mobile Internet is hot. Users are ready. Yes, users are. Not the marketers. If we want to reach our audience on mobile, we have to make sure our shops are ready. By the "shops," I mean the brands' mobile assets. Do we have a mobile-friendly website? Do we have an app in both iOS and Android platforms? Do we have a mobile content strategy?

I have heard from advertisers saying their mobile sites are ready and I have seen some of them. It is developed by HTML 5 and everything looks good. However, there are still two mistakes. Content - marketers are still trying to "push" as much content as possible in their mobile sites. Mobile screens are small and mobile Internet users mostly access Internet on-the-go. It is either for entertainment purpose to kill time through the traffic or very focused. He/she has something to find out right at that moment and doesn't want to wait until later in front of the PC.

Therefore, as a brand marketer, you do not want to drown your customers into an ocean of content. Putting shortcuts as first screen of mobile page would be a good start.

The other mistake is not to leverage the opportunity to amplify your message to the right audience. Fifty percent of social traffic comes from mobile devices. Mobile Internet users love the instant updates they receive from social media because it's live and relevant. Make sure you have a social sharing function with your mobile content that allows the users to share immediately whatever they feel relevant and worthy.

From a mobile media perspective, it is very scattered at the moment; so working with mobile ad network would be a good start. Make sure all targeting criteria and proper tracking in place and you are good to go.

The China Internet scene is not complicated. It just takes time to digest and understand through.

End of the day, always remember: China is a seller's market.

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ABOUT THE AUTHOR

Karen  Ho

Karen Ho is the head of MEC Interaction China. Karen is charged with leading MEC Interaction, MEC's digital, social, and direct specialism. Karen graduated from the University of Toronto with a Bachelor of Commerce in 1999. She began her career with online media owner, Real Media Limited, in Hong Kong in 2000, where she managed website and business partnerships. Her digital planning career took off at Tom.com and in 2006 Karen moved to Shanghai to lead media strategy and innovations at Isobar-linked company, wwwins Consulting, working on clients such as Coca Cola and Xintiandi. In 2008, Karen returned to Beijing where she was digital director, planning and ad ops/analytics for OMD. There she built and managed media teams for clients such as Intel, GE, and Apple and started the first ever ad operations and analytics department for OMG. Karen has deep knowledge of CRM, media planning, and strategy, and a wide experience of ad serving, social, and other digital tools.

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