Media

China Internet Trends at AdTech Beijing

For the next couple days I will be blogging AdTech, a conference in Beijing featuring some of China’s most prominent Internet companies and executives.

Others blogging include Robert Ness at Danwei, Lonnie Hodge at The China Business Network, Paul Denlinger of China Vortex and Kaiser Kuo at China Digital Watch and Media Magazine.

A number of important uniquely China Internet trends will be featured. Thank you Mimi Vong of AdTech for discussing the companies that would be present to speak about these issues.

ONLINE COMMUNITIES/GAMING
While US-based companies tend to offer a one-stop shop for all elements of gaming and online communities, Chinese companies have been much more specialized in their offering. Netease and QQ, for example, do extremely well in instant messaging but are only now expanding into the many different services offered by a site like Facebook or Myspace.

Relevant Companies attending AdTech: QQ, The9, Perfect World, Netease Games, Massive, iThink

SEARCH
Google entered China replicating their US-style strategy and flopped, but they are now working hard to catch with the dominant player, Baidu.

Current search market share in China (estimates vary widely):
60 - 80% Baidu
10 - 40% Google
10% Combined Sina, Sohu, Yahoo (which has roughly 5 percent)

Google’s ad sales approach was similar to their US strategy of cutting middlemen from the advertising market. Baidu, on the other hand, worked with hundreds of distributors to bundle advertising with website production and management. This tactic better suited China’s market, where many companies are still at the stage where they are more worried about building a website than advertising.

Another Google advantage is that paid results are not mixed in with regular search. Consumers on Baidu, for example, cannot tell when a search result has be put higher because it was sponsored.

Google has restructured, set up a research facility in China and is using Baidu’s tactic to regain ground. Be interesting to hear where things now stand.

Relevant companies at AdTech: Netease, Baidu, Google, Yahoo, Sina, Sohu

BILLBOARDS
An interesting advertising phenomenon: Billboards in Beijing are something like five times more costly than billboards in Hong Kong. Given the relatively lower per capita income in China, this seems surprising. One explanation is that Beijing has far fewer billboards, due to government controls and a mayor who does not like them!

PEPSI GOES RED IN CHINA
In the category of “only in China”, Pepsi’s color is switching to red, the same as Coke - albeit a different shade of red. Normally Pepsi has a blue color. Apparently the red color is better suited for selling in China. (Though Pepsi says the move is only for the duration of the Olympics.)

FEW WEB METRICS

All statistics are lies, especially in developing countries. In China, however, even online statistics are difficult to pin down.

While the US and Europe use relatively unbiased third party companies to verify data, I am told that Chinese Internet portals often offer no such guarantees. In addition, many companies do not buy based on impressions, they buy according to the number of hours a banner is online. You might, for example, buy a banner ad for three days, but not know how many times it has been seen. Why? One explanation is that the big bosses do not understand click-through, so they need to see an ad sitting for 24 hours on a website.

Companies at AdTech: Nielsen//Netratings, DoubleClick, iResearch, Yankee Group

LITTLE AD DIFFERENTIATION

Unlike the US or Europe, where search advertising will be based on such factors as time, location and language, many of China’s search engines and portals serve up the same ads to everyone in China all the time.

MOBILE MARKETING

Although still very new in China, spam rules. That said, some controls are being put down.

Companies at AdTech: Madhouse, 21Communications, Minfo

FYI: Here’s a list of China Web 2.0 companies presented on CNET.

Technorati Tags: 21communications, AdTech, AdTech Beijing, Beijing, China, iThink, Madhouse, Massive, Minfo, Perfect World, qq, Sina, Sohu, The9

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Technorati Tags: Kaiser Kuo