Marketing in China: Make Sure You re Always in Digital and Always on
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1 Marketing in China: Make Sure You re Always in Digital and Always on AN INTERVIEW WITH: Clement Tsang Head, Performics China February 27, 2012 Clement Tsang joined Performics, the performance marketing unit of ZenithOptimedia, in July Prior to that, he was China country manager and sales director for MediaMind (formerly Eyeblaster), a global provider of digital advertising solutions. At MediaMind he worked on global campaign management solutions for clients such as the Richemont Group (Cartier), Chanel, H&M and UPS. Other past roles include raising angel investment funding at CédricM Video and sales at Viacom s MTV China channel, for which he managed accounts that included PepsiCo, General Motors, Ford, Electronic Arts and Vivendi Universal. Tsang spoke with emarketer s Tobi Elkin about the challenges and efficacy of search and social media marketing in China. emarketer: What advice would you give multinationals that are navigating the complex media landscape in China? Clement Tsang: They need a top-line strategy encompassing paid, owned and earned media. Marketers are trying to shift from the whole paid concept into owned and trying to work out how to get into earned. From an online pre-roll video point of view, which is obviously fully paid, it s tactically very hard, because nobody really understands whose responsibility it is to own this pre-roll space. There are companies that are trying to create branded content that s half owned and half earned. They still use the paid model. Our advice is to make sure you re always in digital and always on, 365 days a year. In the past year, we ve tried to shift our clients
2 corporate strategies from paid to owned [media]. These clients are now building owned assets either through a third-party website or their own online magazines and content. Owned assets include video content, social media accounts and campaign and brand websites. emarketer: What do you mean by always-on campaigns? Tsang: Always-on includes search, social media and owning a content platform, like a channel on YouTube, or in China owning a channel on YouKu, that aligns with your target audience and brand. A marketer owns it 24/7 for the whole year, then rotates the message to match the campaign calendar. Because it s always on, hopefully the optimization and the yield for the inventory reduces overall costs while also increasing performance. We do this through cookies, retargeting and trying to keep driving the same audience down the purchase funnel. Our advice is to make sure you re always in digital and always on, 365 days a year. There s a website called confused.com, which is owned by Admiral Car Insurance, a UK-based company. It created a third-party comparison website to enable consumers to look at pricing, and it also offered some data and analysis to the holder of that third-party website. That s a clever example of how you can create a new brand to support the idea of owning your own media. Why should your dollars drive somebody else s clicks and grow somebody else s share of voice as a digital publisher when you could create that for yourself? emarketer: You re advocating that marketers create their own content and position themselves as publishers. Tsang: That's what Proctor & Gamble and other large marketers have been trying to do. Also, most brands have social media platforms. For example, Rose Beauty is Lancôme s social media platform in China. The marketer is trying to drive existing customers to build their own advocacy channel and incentivize them to continue the chatter that s already organic within the earned media spectrum. Most of the big brands we handle L Oréal, Gucci, Bottega Veneta, PUMA and LVMH brands Dior, Benefit and Guerlain are all slowly moving into the digital space and exploring owned and earned media. emarketer: Tell us about the search landscape in China Baidu [the major search engine in China] has a huge presence, and Google has very little market share. Tsang: Previously, the usual market share would have been 80/20 Baidu 80, Google 20. But Google had server and other issues so it s now about 90/10. We see more performance coming out of Google from a pricing point of view and the cost driving the click. We see Google as a strong partner. Their search engine is a lot more open and the data is obviously structured like the West. It s much more of a global platform. We continue to work with Google since its focus is on the ad exchange, as well as traditional search products and mobile. In China, Google believes strongly that mobile search will be a turning point.
3 emarketer: Do you think Baidu will need to meet global standards and work in the same way that Google functions? Tsang: I know Baidu does have international aspirations, though it s just focusing on Chinese clients now. Multinationals in China do have to be on Baidu. They have so many different search products to choose from, but the cost of entry can be high. The question for marketers is, with all the competitive investment going on in search, what is the ongoing cost for me to be visible? Marketers all say search has high ROI, and they know they need to do it, but when they see the cost of entry, they balk, because if you didn t have any investment or background in search and you want to go straight in and be visible, it s alarming how high the ramp up cost is. Most of the big brands we handle are all slowly moving into the digital space and exploring owned and earned media. On the other hand, we re seeing a lot of interest in natural search and SEO because this is a more effective and affordable way for new clients and brands to enter the China market. In order to be ranked No. 1 on a generic keyword within a category, it will cost you a lot of money. Then you need all the assets to support it and to ensure that the search term is relevant so that the person stays on your website. Search is probably the most detailed and complex activity within digital advertising it s all performance-based. It s definitely a must-have for any multinational brand. emarketer: What can you tell us about ecommerce growth in China? Tsang: Everybody sees ecommerce as the next growth curve. A Boston Consulting Group report released last year showed that one in every seven new internet users will do online shopping. The cost of doing ecommerce is significantly lower than opening retail stores in 2nd or 3rd tier cities. The issue is that an online mall like Taobao doesn t permit third-party tracking. It purports to have its own tracking tools, but because of this environment, it s disconnected from Baidu, the search engine, which is disconnected from Sina, the portal. The digital space in China is becoming highly fragmented because consumers want to use different tools for different stages of the purchase funnel, and the brand has to be involved and active in all of them. You have to try to assess the data and the performance of your investment, but there s no crossover analysis available due to the lack of transparency. Multinational marketers are selling products on Taobao but the local competition offers heavily discounted merchandise and consumers want to see discounts. So now, marketers are looking to increase the value of their products by adding samples to incentivize consumers. From a CRM point of view, they re trying to create loyalty to incentivize long-term use to upsell and cross-sell. emarketer: What challenges are you seeing with respect to measuring and assessing the value of social media marketing and
4 content? Tsang: [Sina] Weibo is on the radar of every brand so it s a musthave, but the inability to track the traffic in and out is a big challenge. Weibo s great because you re able to add fans quickly. You can buy zombies to increase your fan base. The idea of zombies is that there are vendors or software solutions where you can buy fans. It s like buying an audience it s a little bit like buying a flash mob. Obviously, you can suddenly become very popular, but in reality, what are the key performance indicators? The key challenge is trying to work out what the KPIs are for social media. That s obviously a global discussion. Is it measuring the cost per action? What is the action? Is it adding a friend? Is it that a follower retweeted? Is it for them to reretweet? Is it a coupon download? Where is the final action? Everybody keeps talking about earned media, and it is certainly a very big part of the purchase funnel because it s about advocacy and consumer delight. But how do we feed back all of those third-party comments when a new target audience does comparison search? So if you re happy with a brand, can you please tell this interested party that brand A is better than brand B because of these reasons? I know Baidu does have international aspirations, though it s just focusing on Chinese clients now. Multinationals in China do have to be on Baidu. Social media requires a lot of content. It s a hungry beast, and it can t just be product, product, product, promotion, promotion, promotion. It s got to have some brand sense to it. It s got to have a celebrity endorsement, a story and an editorial program. Then it comes down to tracking. Most brands are on Weibo. We re obviously working with the clients to keep feeding the Weibo chatter and to push campaign promotions. We re advising the clients from a strategic level that this content is necessary to fill in the middle part of the audience funnel. We re trying to work our way through coordinating all of this content. emarketer: What is your advice to multinationals on best practices for working efficiently in China? Tsang: From a new market-entrance standpoint, the key obviously would be making sure that they have a localized website and then use SEO as a starting point. I think SEO for a small, new brand entering China is the most cost-effective solution for them to gain some visibility without entering paid search. At the same time, if they are able to build a delighted customer base within their first year through aggressive discounting or whatever they choose to do, then they should deploy CRM at the same time in social media. Use those delighted consumers to tell the story. Look at social media as a CRM cost, then fold in paid search as the impression volume gets higher because more people are searching. That represents the gradual deployment of a brand into the space. From an ecommerce standpoint, I would advise them not to go into
5 Taobao because the cost of entry is too high. If the consumer is price-sensitive, they ll purchase an identical item that s imported and cheaper. Brands need to build their own environment with a CRM and loyalty incentive program to create value-added differentiation. Taobao won t let them do that because everything [on Taobao is] based purely on price. If you re a global brand, you can t compete on price with a local merchant that s discounting. It s more effective to build an event, a loyalty program or package and invite consumers to preview products at launch. Multinational marketers need to look at ecommerce from a CRM point of view. That Boston Consulting Group Report indicated that 40% of sales are driven by 7% of total consumers, so everybody else is a new user. It s better to demonstrate the return on value and ROI for the channel by looking at customer retention, and then look at recruitment, because without brand awareness, there s no point in doing lots of search. Interview conducted by Tobi Elkin on February 27, emarketer Inc. All rights reserved.
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