China Online Marketing 6+ Years of Lessons Learned Behind the Great Wall Presented to Mark Myrick, VEDP + Guests August 5 th 2010-8AM (EST)
Outline Darwin Background + Context (1 slide) China Online Marketing Overview (5 slides) Why Online Marketing in China? (5 slides) Channel Spotlight Search Engines (5 slides) Keys to China Online Marketing Success (10 slides) Case Study 1 2 slides Case Study 2 2 slides Q+A
Darwin Background + Context Technology + Service Solutions 150+ Multinationals + Leading Local Clients DEC 05 // 1 st SEM + SEO client (150 by 09) DEC 06 // SearchValue (PPC) Baidu + Google MAR 07 // Early Baidu beta API partner NOV 09 // Over 150+ SEO/SEM clients NOV 10 // SV Mini for Baidu (PPC) Publishing / Speaking / Creds International + Local Experience Baidu + China s Search Market State of Search in China 96 01 // SF + Silicon Valley // Online Marketing 05 10 // 30+ SEO + SEM Resources in BJ, SH China Co-Chair 2009-2010 3
China Online Marketing Overview 4
China vs. US - Online Users + Penetration Source: JP MorganJan 09 Report 5
China Users Online Access Mobile vs. Desktop Source: CNNIC( 中 国 互 联 网 络 信 息 中 心 ), MCA( 中 国 移 动 通 信 联 合 会 ), IResearch 6
China Online Shopping Penetration Low (Million) Online shopper definition: refers to a user who made at least one online order during 2007. Source: iresearch 2008 report Compared with Korea (60.6%) and US (71%), China online shopping penetration is still at a low level, which also implies the maturity level of the online shopper in China. 7
China B2C/C2C Market Size (Billion USD) Source: iresearch 2008 report 8
26% + Online Buy = IT / Digital Products
China B2B Rapid Transition to Online Source: iresearch 2008 report 10
SME = 40% of B2B Online Transactions SME definition: an enterprise with employees between 3-2000, annual revenue less than 300 Million RMB, or enterprise asset less than 400 Million RMB. 11
China e-payments High Growth Thru 2011 (Billion USD) Source: iresearch 2008 report 12
Why Online Marketing in China? 13
Traditional vs. Online Advertising in China The decline of Traditional Advertising is even more pronounced in China where online has become the dominant channel Time Spent on Internet is much more than TV Source: IResearch 14
2010 Online Sales 3.4% of Total; 80% growth The rapid growth of Online Advertising is contributing to online sales in China, a fraction of traditional but increasing every year. Spending + Budget online vs. Total volume of retail sales 15
Integrating Search + Other Media Channels Need / Desire triggered Initial consideration set Research Compare Purchase / Action User experience Awareness Consideration Preference Conversion TVC / Print / Radio / Outdoor Digital Display / edm / Partnerships Search Marketing Website 16
Channel Spotlight Search Engines (5 slides) 17
2010 2012 / China Search Engine Market Size 10 US$ 1.38B (RMB 10B) expected for search (52% of 2.8B total) 11 Search YoY grow 43% (US$ 2.09B); 8% Total China AD market 13 Search will be 10% of Total China AD market Online Advertising i / Search hboth growing rapidly in China China Search % of Total ADV Spend Total CN ADV Total ADV Search Online % Search % SOURCE: JP MORGAN NOTHING BUT NET 2010 REPORT 30,000 25,000 20,000 15,000 10,000 5,000 0 14% 16% 12% 14% 10% 12% 8% 10% 6% 8% 5% 6% 3,768 2009E 2010E 2011E SOURCE: JP MORGAN NOTHING BUT NET 2010 REPORT 4% 2% 0% 18
US vs. China Search Engine Marketing Spend US size = 10-15x China Size spend US vs. China Search Spend US Spend CN Spend US % CN % 25,000 20,000 15,000 10,000 5,000 0 60% 61% 61% 56% 53% 51% 2,114 20,763 2009E 2010E 2011E 62% 60% 58% 56% 54% 52% 50% 48% 46% Figures in USD $ (M) 11 US @ USD $20B vs. $2B for China 09 11 China Search grows 2.5x faster than US;
Baidu Market Share + Growth Baidu share 71% search traffic 23% Google 71% Revenue Growth US$ 234M 07 US$ 1B(e)+ 1 10 StillLow SMEPenetration 234,000 Advertisers / 4.5% Source: CIC China; Pacific Epoch; JP Morgan, Darwin Proprietary Data
Ads Before Naturally Ranked Ads Display Changing PAID RESULT NON - PAID RESULT NON - PAID RESULT
Search User Click Behavior - Baidu : Google CN Baidu SERP display + local China user behavior = willing to scroll down First click takes 55 : 30 (Baidu:Google)sec Users look at each result on Baidu Baidu users also click on bottom results Baidu s special SERP with ADs on top causes some users to scroll down to see more results Reference: Chinese Eye Tracking Study from Search Engine Land 22
China + Baidu Unique Search Opportunities 23
Baidu s Rapid Product Releases Baidu Begins 1 st product AUG 01 2 nd product - NOV 02 (15 months) Baidu Ramps Up 8 new products annually from 03-05 14.5 new products annually from 06-07 Baidu Present 57 total products by MAR 08 Source: http://ir.baidu.com/phoenix.zhtml?c=188488&p=irol-products
Baidu Brand Zone CTR on Steroids Headlines for multiple Brand Zone clients can achieve 55% - 65% CTR Baidu brand Zone is at the top of the search results page for the well-known brand advertisers, and is tailored for business information platform. Advertisers can customize the columns & update products, promotional contents, latest releases, to convey the latest information. Keyword Headline Left Side Image Display url Description Right side Image Column Name Column Content
Baidu Tieba Post Bar Baidu Post or BBS (Bulletin Board System think Compuserve 97) was launched in December 2003 and attracts 25M+ visits per day! 2M threads and 3M posts; Limit of 1 video, 1 pic allowed per thread Popular categories = famous people; games; TV; sports; music, etc. Login Top Ranking Hot / Recommended Fast Rising Categories Top Categories Featured Music
Baidu Zhidao To Know (Answers) Baidu Knows was launched in June 2005 (before Yahoo! Answers July 2005) The site gives users the chance to earn points to encourage user participation (similar to Korea s Naver in + Yahoo!) Brand sponsored content t Create + Edit Brand Content Top Entry List People Feature Category Feature Image Feature Top Rank Editors
Baidu Baike Wikipedia (for China) More than 2.17M entries in Simplified Chinese in 4 years (estab. April 2006; compare to Wikipedia with 3.2M entries in English in 9 years; 15M overall) Features topical stories / entries; ranks top editors by user voting; nearly 2.8M people visit the site each day; Create + Edit Editable Top Entry List People Feature Category Feature * LOCKED * Image Feature Top Rank Editors Paid AD
Brand Advertisers - BingHoo Darwin Clients already committed to spend more than 30M on BZ alone in 2010 Brand Zone = Microsite Content, a.k.a. 70% of above the fold to Advertiser ROI feedback from multiple category clients very positive! DoubleClick / Razorfish studies show ROI of Brand + Search is higher than for search alone. This is a global innovation How long before US / Europe adopts (Binghoo?)
Keys to China Online Marketing Success 30
Localized Content The key is to think localization, not just translation It may look strange, flashy but we must look through their eyes 31
Localized Domain + ICP The most common China domain names are.com.cn and.cn All websites hosted in China or using a.com.cn or.cn domain must have an Internet Content Publishing (ICP) license A legal local company is required to be attached to an ICP license 32
Localized Hosting Dell.com.cn Example (part 1 of 2) 1. Cost vs. Speed Hosting all in US works for countries well served by Akamai; China is not well served at present leading to slow loading speed 2. Availability is Critical The conversion funnel is losing 8% of users at the product page due to time out on page load Routing (page loading) problems in Shanghai, Xi an (Akamai to US?) Product Page (begin of config.) was not available 8.32% of time Category Page slow to load (8.5s) 33
Localized Hosting Dell.com.cn Example (part 2 of 2) 1. Dell China Website in US Does it make sense that the website loads faster for US based IP users vs. China based IP users? Check with CDN provider. 2. Speed is Critical Buying process is 60% slower for China IP users, more than 2x slower than NewEgg. Consider using North / South China hosting. Buying Process Speed Comparison Website Dell china (from China) Dell China (from US) Lenovo China Newegg China Average Performance (ms) Average availability Number of step 39520 82,23 % 6 24723 85,42 % 6 23858 88,94 % 5 18872 94,50 % 5 Newegg is best in class (3.66s) vs. Dell (4.11s) per page load Dell China website loads 60% faster for US IP users than China IP users The China delay is making buying process more than 2x NewEgg Competitors NewEgg, Lenovo host China North + South; no CDN used 34
Managing Inquiries The use of a call center can fit budgets even for most SMEs China s call center development is an important piece and integrated with web is a best practice (i.e. C Trip) 35
Budget + Resource Requirements for Website Plug n Play vs. Custom Setup Maintain Website Budget Plug n Play Store in Mall @ TaoBao Mall @ PaiPai Semi Custom China Hosted Platform Lead Gen / e Comm Full Custom China Hosted China Domain China ICP Easy quick and easy; similar il to an ebay store Easy updates come with ihthe $1,000 $4,000 platform; Mid more custom Mid some (text t + look and feel; ICP image) updates to via the platform keep content fresh High full custom look and feel; ICP requires legal local business High most content updates required $5,000 $10,000 $15,000 $30,000 36
Budget Requirements for Online Marketing Plug n Play vs. Custom Setup Maintain Budget Plug n Play Affiliate Marketing Easy quick and easy; similar to an Google in US Easy some (image + text) updates to AD creative $1,000 $4,000 Semi Custom Google + Baidu PPC Affiliate Marketing Mid need ICP for Baidu; Google same as US; Mid Mustrefresh search ADs at least every 1 2 weeks $50,000 $100,000 Full Custom Google + Baidu PPC Social Media Affiliate Marketing High full custom look and feel; ICP requires legal local business High Include social media to develop brand reputation $100,000 + 37
Case Study 1 2 slides 38
Case Study Finance Case Study Search Engine Optimization Finance Client Background d/ Objectives / Marketing Challenges Background & Objectives The client is a professional finance website, which dedicates to finance and investment tips, strategies, analyses and resources. Primary objective: generate natural search traffic and brand visibility Secondary objective: improve ROI ofppc performance. Marketing Challenges New Site SEO was started 1 month later of new site launching, the structure and content is too simple(only had news and calculator pages). Complex CMS Complex CMS made a difficulty on modification at the backend to improve SEO. Wrong solution on technology There were Additional request: Utilize SE to attain the core value of the website (Investment calculator) many issues on conducing 404 and 301 technology. Inbound links Inbound links were primarily used on homepage, priority internal pages were forgotten
Case Study Finance Case Study Search Engine Optimization Finance Marketing Results Weekly Traffic Increased dby 433% Traffic was increased dramatically from 1,500/week to 8,000/week over 6 months 433% improvement Core keyword ranking were in top 5, and most of them were at 1 st position 10000 8000 6000 4000 2000 0 Baidu + Google Organic Search Traffic month 1month 2month 3month 4month 5month 6 搜 Organic 索 Traffic 量
Case Study 2 2 slides 41
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