China Ad Secrets - Strategic approach to advertising in China
Find out why China is the key to long term business success — In this episode, you’ll:
- Learn why China is ripe for digital advertising and how you can claim your slice of the pie 🍰
- Discover how it’s possible to start advertising in China at almost any budget to test the waters 💹
- Learn the biggest myths when it comes to succeeding in the China market 🐉
- Discover the most painful mistakes new entrants make, and see what successful China entrants do differently 🥇
You’ll even get the precise strategies we’ve helped Western brands implement to get traction in the China market.
Meet the speakers
Growth Marketer, AdChina.io
CEO & Cofounder, AdChina.io
Head of Growth, AdChina.io
- 0:00 Intro
- 3:00 ‘It’s hard to advertise in China’
- 6:05 Success is possible
- 7:10 What does China’s position look like now and into the future?
- 8:15 China Mythbusting
- You cannot DIY
- Advertising in China is an insurmountable challenge
- It’s expensive to advertise in China
- The money is only in the big cities
- You need a warehouse
- You need to build a new website in Chinese
- Translation is all you need
- WeChat and Baidu are the biggest and best channels
- 16:35 The 3 biggest mistakes new China entrants make
- 18:40 3 things that separate successful brands
- 19:45 AdChina.io client case study
- 21:05 What the winners do differently
- 25:30 Why some organisations struggle in China
- 27:05 How organisations avoid the struggles
- 27:35 Why AdChina.io
- 29:25 AdChina.io client case study
- 32:25 Strategy + Support + Advertising
- 36:20 Alignment
- 38:45 Clients feedback
- 40:00 Q&A with Henrik and Jie
Listen to audio version
[Jie] So, first off, it’s not particularly more expensive to advertise in China compared to the West, if you look at the cost of per-impression or clicks and so on. But the problem with the advertising in China is the entry barrier or has been the entry barrier. Before, most of the channels, I mean, not most, actually every channel have to authorize and open account for every advertiser. And most of the advertisements have to be reviewed and approved before they are launched. At the same time, many of them require initial charging. I mean, before our platform, it was as Brad said; it was a lot more to start. And now, with the platform in place, it is much easier. And, still, you can opt around or start around a Facebook-like ad in China with say $10, which you can do on Facebook if you really want. So, that is still the challenge. But, we have made the barrier much, much lower compared to before.
[Henrik] One thing I want to add there is another thing we’ve done, which is quite unprecedented in the industry, is that we also made our pricing transparent. So, when you sign up to the address dsp.adchina.io, you can create a free account there, and you can go into the tab around the marketplace and you can actually see what are the costs and the requirements to all the different channels. So, that’s something that’s been very much shrouded in mystery before because it very much depended on how big is your company, what is your budget, and then the pricing would kind of be depending on that. Now, you can see what’s the true pricing behind that. And in terms of the barrier to entry, it’s been reduced by a magnitude of 10 to 100 depending on the channel, for example, going from around 100,000 US to 1,000 US for several of the channels. In terms of the budget, again, it comes down to the testing, how fast do you find the things that work. And I think that’s also what Brad talked a lot about today. And there, what’s very unique now is that with AdChina.io, you can run campaigns that are very, very small until you find what works and then scale up. So, right now, I would say you can do it with a budget that is more or less the same as in the West. But, of course, it depends what your budget is in the West.
[Jie] We receive a lot of enquiries from different industries which are perfectly allowed in the West. But at the same time, we have to really regretfully deny many of them because of the regulations in China like many of the industries and services especially on the financial sector. And then, VPN and proxies, it’s heavily regulated especially if you’re talking about this, they call it, to break the firewall. That is clearly illegal in China. So, what you have to do is to just let us know exactly what kind of services you’re providing and what kind of problems the services and products you are trying to solve. And then, we can look into, really help you verify whether it is possible to do anything about your product or not. And we have been very transparent as well. We will not tell you something and then turn out to be something else. So, we will be very frank and direct to you. So, whatever industry you’re in, just reach out to us. We will for sure save you a lot of time.
[Henrik] On the next one, it’s very specific and I want to include a little of the background around the question because I think it’s a very unique industry as well. So, the question itself is around B2B advertising in China. But here it is, “My aim is to advertise and be seen by Chinese factory owners, the DMUs of human hair extensions and wigs, to sell the raw bulk here, which then the factories use to make the wigs and extensions.” Because it seems that COVID has had some impact on this industry, so I think it’s a very interesting example. So, that’s the background. The question is, how can suppliers and/or advertisers be seen by, for example here, factory owners? So, the B2B advertising in China.
[Jie] The B2B side, I think if we talk about the exact… I mean, we probably can talk about B2B in general, but for this I want to touch upon this specific case. Without looking into the industry deeply, right now I think, since it’s still niche and also so specific, I think it may be a good idea to start with search engine marketing. And then, look into what other, let’s say, proactive channels that we can address. But then, from the beginning, I would suggest to look into the search engine marketing. But in general, on B2B side, we have a lot of B2B customers with us. And we use different channels, not only LinkedIn which is an obvious B2B channel. We also use WeChat. We also use, for example, Tencent News, and Toutiao, which is another news app from the mother company of TikTok. And also, of course, Baidu search engine as well in this case.
[Henrik] And also Baidu feeds, I think, can also be a good one because it can be targeted very specifically. Please let me know in the chat if this answers your questions on the B2B advertising towards factory owners.
[Henrik] And let’s move on to the next one, because this is actually from another participant but it’s in the same genre. “So, you recommend using LinkedIn China, Baidu ads, B2B focused, but are there any other that could also work as part of the B2B strategy? For example, could WeChat still be used for B2B? And if so, how?” So, I’m thinking if we can… One thing that I like to talk about there when it comes to WeChat ads is in China, everybody uses it. So, for example, if you’ve ever been to a conference, an industry conference in China, and you see, for example, the big honchos they’re sitting there. If there’s a moment of where they can pull their attention away from what’s going on stage, you can make a pretty secure bet that they’re gonna be on WeChat and checking out what’s going on, because everyone is on there. That’s how they stay in touch with their network. And that means that all the others, all your target audience is going to be there – the decision makers. So, everyone is on WeChat. And therefore, it is a very good B2B channel. One thing that I can also add there is you can, for example, for WeChat you could even target people when they are at the office or when they are commuting. That’s what I would like to add. What’s your thought Jie?
[Jie] Yeah. To give you one extreme example, we’re Norwegian. We’re a company that’s sitting in Norway or a Norwegian company. In 2017, we were responsible for launching a campaign for the state visits of the prime minister of Norway to China. That was completely B2B focused. Can you imagine that? We tried to target the related industries and also the journalists, the different media, and so on and so forth. And then, it worked pretty well actually, with a lot of new followers of their new official account of Norway. Which is, this is how B2B focused a social media campaign can be. That’s just one example that came up to me.
[Jie] One place would be Tmall.com. Go to Tmall or Tmall Global. Of course, if you have someone that can read Chinese, that would be the best. If not, then try to use Google Translate to play with. And then, search for basically Dutch product and see the number of sales of different products and then see. But then, there, I assume that you’re living in the Netherlands and try to make something out of this. But then, that means also then, you are entering into a kind of a red sea if you really look for something that is already popular from the Netherlands to China. On the other side, actually, I would suggest if you have something that you really are interested in, try to start from there and play with what you think you might have a competitive advantage out there, and then test out the market fit of that product or of that portfolio product. And then, start from there. And of course, as I said, we can help you. Your local consultant can help you. Your media agency can help you. Just reach out to them and you will find some good things. And also, I want to mention this as well here is to use this opportunity. You don’t have to use us as your consultant. That’s the most important thing. What we’re providing is, in essence, a software tool. You can use your own Chinese-speaking employee in your organization. You can rely on your local consultant that you trust. You can rely on your existing media agency that you use for the Western advertising media. But then, what we’re trying to offer you is a software tool which can increase the return on investment and also increase your operation efficiency as well. This is something really, really unique in the market. Look at it as a tool.
[Henrik] The next one is around the app industries, if we can share some insight about the mobile app industry. One specific question is like, how much time does the advertiser need in average to see results and optimize campaigns and how does the price of leads differ from the West in average, and is it cheaper, higher, or the same. Maybe I can start answering that one. So, one thing that I want to add there is, this is specifically for the mobile app industry. We are integrated with AppsFlyer, the International mobile app. So, use that. Then, get the data on the in-app conversions to be able to track that full loop. In terms of how much time the advertiser need in average to see results and optimize campaigns, I mean, in terms of seeing the results, you know quite fast whether a campaign is working or not. What I can say is you should expect maybe 2 to 6 weeks to get everything set up. And the reason why it’s very wide timeframe is it also depends a lot on how fast we can get all the documents from you in order to get the accounts set up. Then, in terms of seeing the results, because it’s mobile app so you can see it quite quickly.
[Henrik] Yeah. Let me see. If you can see this, just give me a heads up in the chat. Yeah. So, this is inside of AdChina.io in our demo account. And I’m just clicking very quickly through, right? So, if you guys want to see more, just register that free account with us today. And then, we can show you guys even more and we can answer your questions. So, you can see a lot of the channels that AdChina.io is connected with. And I’m just gonna take a WeChat Moment because that’s a very good place to advertise mobile applications. Now, here, you can actually then drive the traffic directly to your app landing page. Let me see. I’m gonna just quickly grab an app ID. Let’s see. Clash of Clans is an app, right? Now, I just go in and I take their ID. I just googled it. You put in the ID here and then you find. Then, this is basically the Clash of Clans. You can drive traffic directly to that landing page on the Chinese iTunes Store. And then, here you can see some of the targeting that we can do on WeChat Moments, right? So, one thing is we can target within China. We can also target Hong Kong, Taiwan and Macao and also overseas. So, take for example, if you want to target people who have WeChat in the US, you see we have about 1.2 million reach in the US. But then, we can also look at, for example, if it was Clash of Clans, then it might be, for example, either mobile game or we can do the strategic game, or simulation things like that. Point is it’s really then about testing, but you can get the campaign set up very fast. If you want to share again the screen, Brad. But you can set up the campaigns very, very fast. And you can get the results then in, say, you run a campaign for a week, then you get the data. You can see the data directly in AdChina.io. Brad, the screen is blinking for some reason. I don’t know if that’s just me. But that’s on that. In terms of the price of leads, I was actually looking into this for one of our clients the other day. From that, this is more like an industry average as well around in China, it’s more or less the same. It can be higher revenue but the cost per lead is more or less the same. But there is a lot of whales in China spending a lot of money.
[Jie] I think it’s already… You have already demonstrated what can be done already on our platform, which is, I think, at least a good start for most of the users to play with it, with the different targeting criteria, with different channels, with demographic criteria as well. And then, you see the potential reach of the advertisement. And then, again, our suggestion is that around small campaigns in the beginning, and to cover as much ground as possible, and as many, let’s say, combinations, meaningful combinations as possible. And then, try to iterate from those tests. So, that will be the best forecasting tool from our point of view. It’s very hard to say without knowing exactly what kind of messages and what kind of industries you’re trying to address.
[Henrik] So, the next one, this is a very time-related question. So, “We are a startup, and we’re about to incorporate. Do you think it’s okay to incorporate in the USA? Do you think we may not be able to have a public WeChat account and accept WeChat pay if we are incorporated in the US after Trump’s WeChat ban takes effect?” So, this is not a very easy question.
[Jie] Let me look at my crystal ball. No. Actually, I think it’s very hard to say what’s going to happen between the US and China. But, what we can see… We are in this business on a daily basis. What we can see are basically two things I want to mention. One is that first of all, China is trying to amend this kind of relations. I mean, with a lot of things. So, I think there is a very low probability that you will meet resistance as a US company into Chinese market. That is the first thing I want to mention without addressing your question directly. Second is that I think with this kind of dynamic, we have seen that there are a lot of opportunities rising still magically between these two economies during this turbulent time, because some things are stopped, and then the urge of cooperation and the communication is directed then to some other channels. So, it’s a lot of opportunities going on. If you’re living in the US, on the contrary of the intuition, it is exactly the right time to look into what kind of things and business you can do between the two countries. I leave that judgment to yourself, but that’s my perception.
[Henrik] And I think when we’re talking about this, maybe if you want to take just maybe 1 minute, Jie, and talk a little bit about the why behind GDC and AdChina, right? Because we’ve talked about that quite a bit internally lately as well, with what is happening in the world.
[Jie] Yeah, that’s more than one minute. I think this is just to serve as the inspiration or food for thought for the audience after this webinar. We can see that a lot of things are going on in the world. And also, we see a lot of, say, stress and struggle going all over the place. But at the same time, what we are trying to do in AdChina.io is that we want to increase basically three things. The first one is transparency. We want to increase the transparency of advertising industry towards Chinese market, which has been not. So, we want to do that. We want to make it easy. We want to make it efficient for the customers to do this. And second is that we want to lower the entry barrier of Chinese market for the Western brands. And that is something… Actually, we see that we have already been achieving a lot, because in the past, going to Chinese market is always… I mean, I’m not saying that we don’t have big customer, we still have big customers but we have seen a lot more SMEs capable of going into Chinese market via AdChina.io, via cross-border ecommerce. And also, for the software industry or developers, it’s even more easier than before. And the third is that we believe this kind of communication that we’re trying to promote is actually making the world a better place, where we’re actually making China more connected to the rest of the world, which is actually from our point of view, on a daily basis, making the world a better place. That’s what we’re trying to do.
[Jie] It depends on what kind of industry you’re in, actually. Different media channels have different switches of the sensitivity when they look at different industries. So, just reach out to us. I don’t want to waste your time speculating. Just reach out to us and we would tell you.
[Henrik] Yeah. And what I can just add here is we’ve had companies who get registered and approved in like a week. But then, for some, it takes longer. It very much depends on the industry, the channels, which documents you have available, if you have to produce some things like that. But like Jie said, just reach out and we’ll take it there.
[Henrik] Then, the next one is, “As an English teacher looking to get students from China as a one-man band operation with a smaller budget, is it worth me running ads with the budget that is only $100-ish a month as opposed to thousands?”
[Jie] Yes, definitely. Then, you probably want to establish yourself on some channels in China so that you can actually deliver the service afterwards. I don’t know what platform you’re going to use. From advertising side, it’s not a problem for you to run at a very slow pace. That’s not a problem at all.
[Henrik] So, the only thing there is, it’s just the initial top up that you’d have to do but then, you can spend the money as slow as you want. For example, in WeChat we have targeting metrics that are specifically children’s English, teenager’s English and adult English. That’s under language training, under education, as a behavior targeting. So, we do have very, very strong targeting rhombus. So, the other question is more, what’s the point of sale? Where are you gonna drive the traffic? But I would recommend that you set up an account with us in the DSP.
[Jie] Yes, it’s legal. And I don’t think it’s regulated anyway, anyhow.
[Henrik] So, one thing I can say there is because we are working with customers in this space as well, it’s not that it’s regulated; It’s more around like, in China you have two different levels of regulation. One is things that are just illegal. For example, you want to sell drugs and advertise that in China? No, you can’t. It’s illegal. It’s just not possible. Then, if you want to advertise, for example, health products like nutritional products, things that go inside of the body, that is legal in China. But most of the channels don’t accept it because they don’t want the exposure. They don’t want to take the risk if someone has a negative product, advertise it on their channel, and then they will have problems down the road. So, in those cases, we work with a lot of such brands to advertise and market in different ways. For example, with KOL (key opinion leaders) meaning influencers, social media marketing more than the advertising, things like that. So, for astrology, just off the top of my head, I can’t remember which channel it is that works and which are not, but it’s definitely possible to advertise astrology industry in China. It’s actually a huge industry because a lot of people find it very useful. Next question, “After we get set up for Baidu, WeChat, et cetera, what happens to our Baidu advertising account, WeChat advertising account, et cetera, in the future if I’m no longer using your service?” So, this is a very good question. We only help you set up the account. You own it, you have all the rights. If you already have an account, there is a button in AdChina and you basically, you click it, fill in a couple of information about your accounts, then you’re linked, you’re ready to go. So, this is more something that we do because it can be very frustrating and difficult to sign up for the account as a foreigner. Our operation team, they do this every day so it just goes faster, it’s cheaper. That’s why we do it. But if you don’t use our services, that don’t impact the ownership of the account, it’s yours.
[ Jie] Some of our customers choose to host their website in China, which basically guaranteed the performance of the availability and the performance of the websites in China. But then, not everyone can do that because you will need this so called ICP (Internet Content Provider) license for your websites, which require a Chinese entity to take the responsibility. It can be either your subsidiary in China or your partner or another company. Sometimes, it can be ours as well, if we are willing to take the risk of that responsibility. And then, for some of the customers, they don’t like to do that, which I totally understand as well. It’s a much bigger decision. So, many of them choose to host their website in Hong Kong, many of them. That actually can improve the performance of the website, loading time of the website in China. And also, of course, there are some other technology solutions that can help as well that we can help with.
[Henrik] And just as an example there, because actually we are working to set up a website such as Jie is talking about, just these days for another client. And I can just share, like yesterday we were doing the loads testing. And on the first load – this is the one hosted in Severn Hong Kong – on the first load, it’s 4.7 seconds. And then, the subsequent load is 1.61 second. This is from China, so it’s very good loading times even though it is outside of the wall. It’s just that when you do it right, you shouldn’t be flagged. You’d get through as long as it’s done well.
[Jie] Unfortunately, yes. This is something. I saw a question there as well earlier saying that, “I’m WeChat user and I don’t see any advertisement.” And you are right, actually. This business is not very significant for any of the media channels in China. We’re targeting at a problem that need to be solved. AdChina.io is trying to do that. So we tried to. That’s why we developed the platform. That’s why we connect with all; spend so much time and effort and also the struggles to connect with all of them by APIs, programmatic interfaces, so that we don’t have to go through that kind of pain of dealing with all those media channels on a case to case basis. So, yes, you’re right. They do favor Chinese advertisers. And we highly recommend to deal with them via software instead of human interactions.
[Henrik] Because when we’re connected via API, it’s directly to their system. That means there’s no one who is doing anything to the data in between. You don’t have to jump any hoops or anything like that. It’s just plugged into the system. There’s no interaction.
[Jie] As I said, it’s an untapped opportunity. We already have some customers targeting at WeChat and other Chinese app users outside China, meaning the Chinese communities. Either the Chinese communities are outside China or the Chinese visitors or the tourists going out of China when they’re outside China, when they’re locally somewhere in one of the countries. So, this is a very good question. And if you’re actually, let’s say, serving or selling something or have something that you want to sell to the Chinese community or Chinese users of the app outside China, there are a lot of traffic that is up for grab, basically the perfect opportunity.
[Henrik] Yeah. And what Jie is talking about here is, basically, there’s not so many companies that run ads targeting your location. The other is also that you might not have enough data related to you. Because in China, one of the things that make the advertising channels so valuable and interesting to advertisers is the amount of data. Now, I just showed you like a brief snapshot of what was in the DSP in the system, right? But read their behavior, their proven behavior in the ecosystem like their purchasing signals, their demographic data like age, gender, location. But you also have, for example, like within the Tencent system, you also have like whether they’re house owner or car owner and things like that. So, when they don’t know a lot of data about someone that makes that person less interesting for the advertiser. So, for example, for me as a foreigner, even though I use WeChat a lot and I spend about half the year every year in China, they still don’t have enough data on me to show me a lot of ads even when I’m in China.
[Jie] And also given the international environment there, the Chinese media channels are very cautious also towards these kinds of businesses. I mean, pushing advertisement to foreign users of their platform, of their apps. So, again, it’s an opportunity. You are very observative.
[Jie] We usually have separated project managers for different customers, especially when they are, in a way, from our point of view, competing in the same industry. So, for example, we used to have a lot of customers in the tourism industry before COVID broke out. I think they are coming back anyway. But many of them are from the same location, the same destinations, not locations. And then, you can see some of them are competing to one another, for example, restaurants or shopping centers or hotels. But we don’t really see that there is… I mean, when they are running campaigns, for example, they usually address different, use different messages. And many of them, especially in the hospitality industry, they usually have their own team to draft and make their own messages, which is in Chinese, which is very different from one another. So, again, I talked about this in many other webinars as well, Chinese market is very big. It is very important for every custom to find your own niche because every niche is big, usually big enough for the brand.
[Henrik] And I think that’s a good place to go to the follow up question as well, which is that, if what works well for others, if they become a client and what works well for them if that would be passed on to their competitors, if any competitors become our client as well. And I think there’s two different things there. One thing is that most likely it doesn’t work. The thing is that what works for you very likely don’t work for your competitors. It’s so dependent on what’s your creatives, what’s the messaging, what’s your position, right? In general, competitors don’t have the exact same. And then, as Jie said, the niches are so big. Just think Nike and Adidas, they’re running shoes. They’re about the same as you can be but their ads are completely different. They’re targeting is also very, very different. I think that’s not something that we’ve ever really had any issues with.
[Jie] No. And also, again, look at us as a software tool. And that’s, in essence, what we are. And look at us as we are not a media channel like Facebook. But if you look at Facebook as a multichannel platform, we’re kind of like Facebook. But then you are totally responsible for what you are going to go out with unless you need our help. So, that’s how I’d put it. You can totally do it by yourself. You can totally do it with your own consultant. Just use us as a tool which will make your life easier and more efficient.
[0:00] [Brad] Welcome everyone to today’s special online event, Chinese Ad Secrets: How to Easily Unlock Your Profits in China. In this session, we’ll share with you the ins and outs to succeeding with advertising and selling in China whether you’re new to the market or you want to scale up your existing efforts. As you’re probably aware, there’s little point attending webinars and not taking action. That doesn’t mean signing your life away either. They can be simple ways to put into practice what you learn. So, do take notes and make dot points about today’s session so that you can prioritize and have your next steps clearly laid out for you. My promise to you by the end of this session is that you’ll see what a ripe market China is. And not only that, but you’ll see it’s possible to claim a slice of that for yourself. You’ll see how it’s possible to start advertising in China. And importantly, to do this on a limited budget to test the market and to get real feedback before you commit heavily. And, of course, that’s relative, right? So, a multinational brand can do a few tests at a higher scale. And I’d budget to collect more data. And a small business can dip their toe in at a very low cost.
[3:00] So, just to confirm how today’s session will work, I will present for the next 45 to 60 minutes. We’ll see how we go. And then we’ll have the Q and A. But please feel free to ask any questions now. And you can do that by popping your questions in the chat. We’ve had a few people send us questions already too via email. And just if anything comes up during the session, or if you have burning questions right now, be sure you ask. That’s precisely why we’re setting aside 30 minutes for your questions at the end. Before we dive in, let’s just quickly cover who we are. I’m Brad. And I put together a lot of our educational content around the tech tools, innovations in the world of Chinese advertising and research, the latest trends, what’s working and what isn’t. And I’ll be presenting the education session today. Later on, you will be joined by Henrik, a serial entrepreneur and China marketing expert, and Jie, our CEO and Co-founder. We have extensive experience building international teams and businesses across Europe and Asia. They’re both based out of Norway. Henrik and Jie will take over at the end for the Q and A. And just to reiterate, if you want to get specific and ask about your industry or organization or niche, please go ahead. We are happy to get specific. To explain who we are and what we do at AdChina.io, we help organizations, brands and businesses get set up to sell and advertise into China. And since coronavirus, we’ve had a lot of companies coming to us who were happy in their traditional markets until the recent downturn, and they’ve now decided to enter China as a way to get into a market with more positive signals in both the short and the long term. So, with that, let’s get started.
[6:05] Like anything worth doing, getting into China is going to come with its own set of unique challenges. And when you find yourself faced with too many challenges, the way through is to break them down. And it becomes much easier to prioritize. And it’s funny, sometimes people say that they have a long list of priorities or several priorities or they’re feeling overwhelmed, but the reality is they just haven’t prioritized. The definition of priority is the one thing that takes precedence over all the rest. You can only ever have one priority. And so, you can have a list and say, “I need to go through ABC and so on,” perfectly valid. But you only ever need to think about the number one, what is A right now. And so, of course, new entrances will be faced with some extra hurdles. You need a point of sale, whether that’s an online store, your own Chinese website or landing page, or even a WeChat, any program that you can use as your online store. You need some way to accept payments. And depending on what you have already and the marketing angle you want to take, one of those solutions probably makes a bit more sense than the others. What makes the most sense at an early stage anyway, and then you can reassess later on. There’s logistics. Of course, you need to find a way to get your products to your buyers. And we have a number of partners that we can recommend who operate in this space and work with our existing clients. There is set-up so you don’t need a Chinese entity or anything like that. Cross border ecommerce has been the norm for a while, and it’s very achievable. But you do need to get set up on advertising channels. And you do need to navigate a little bureaucracy in the initial stages. And again, it’s all a process. We’ve worked with many companies to submit that documentation to channels, get the account set up, and it really is a simple case of follow the procedure and you end up with your cake. If you’re unsure about the market for your product, then the simple answer is, of course, to test and see. It used to be the case that you needed $100,000 plus USD to even consider China. The stakes were extremely high. And now, it’s just a minuscule fraction of that.
And I’ll mention this a lot when I dive into the details later. But if there’s one takeaway from today’s presentation, it will be that testing and getting market feedback is the key. As you’ve probably seen your home or traditional markets, things are pretty flat across the board right now or they’re starting to contract. It could be that China offers a safe haven to weather this storm. And it’s not a storm with an easy solution or a quick fix. It’s looking like times will be tough for the foreseeable future. So, companies are coming to us because they can’t afford to sit around and wait for the world to fix itself. They’ve got sales to make and bills to pay.
A lot of companies talk about wanting to enter China. And they tend to kick the idea around but don’t end up pulling the trigger on it. So, they stay stuck in their home markets below the clouds here, which might be fine until they need to diversify and look elsewhere for revenue. And we’ve had a number of brands and organizations that we’ve been speaking to for a while, and they didn’t get serious until March, April, May, when they saw what was happening everywhere else in the world and yet China had already recovered. And they diversified. And they’re now reaping the rewards of taking that action rising above the clouds. And I’d encourage you to ask yourself, what difference could entering China make for you and your organization? In a time of uncertainty, might it be wise and beneficial to look outside what’s worked in the past and to find what could be a smart market for growing and continuing to go forward?
[7:05] And to really drive that point home, I wanted to show you the latest world economic outlook growth projections. And they’ve showed that advanced economies are projected to shrink by 8% on average this year and grow by 4.8% on average next year. But that’s growth on top of a contraction, so it works out like it’s lower. Yet China, despite being hit very hard initially by this virus, it’s said to maintain positive growth this year and see upwards of 8% growth next year. In fact, it’s the only country that looks like it will come out of 2020 in the positive. So, this report is from end of June as well so there was a bit more optimism, I think, at that time that the virus might be on its way out. It will be very interesting to see the next report, I believe, which will be in September, and what their numbers look like now. But if China remaining in the positive throughout is not a testament to the strength of their economy, well, I don’t know what is.
[8:15] So, I wanted to tackle a few myths. There are things that can help or hinder you when it comes to the China market but there are no silver bullets. And that’s an important lesson in itself. So, let’s just smash these one by one. The first is that you need an ad agency and you cannot DIY it. That used to be the case, more or less. We didn’t like that. And that’s why we created the AdChina.io platform. I’ll talk a little bit more about that later. But essentially, you can launch and run ads across the top channels in China from an intuitive easy-to-use platform that’s all in English. DIY is an interesting part of this myth. On the one hand, you do need to adapt to a new market. You do need to be culturally sensitive and aware of things that most Westerners don’t or may not know about. And you do need your ad copy and text, of course, to be in Chinese. If you have the resources internally to do that, yes, you can DIY. If not, then some level of support probably going to be necessary.
The insurmountable challenge, I think we’ve smashed that already a few slides back. But again, if you break it down, you’ll probably find it’s less of a hurdle than you think it is. It’s all about prioritization.
That it’s expensive to advertise – As mentioned, it used to be 100 grand or more to start just to run some tests, now it’s down to a few thousand dollars. And more than 90% of that, in fact, is just the deposit for the ads. Basically, the channels want you to commit to running a few ads. You don’t even have to spend it all at once, so all on one campaign. That’s actually one of the biggest game changers in China in recent history.
[10:00] Another myth is that you only want to target the Tier 1, Tier 2 cities. The marketers watching will realize immediately, it depends entirely on what you’re selling. Tier 3 and 4 are growing and buying at higher rates than Tier 1 and 2 right now. And it does look like there’s plenty of upward mobility happening. If you’re selling high-end luxury, yeah, you’d stick to Tier 1 and Tier 2. If you’re selling something practical or useful to those who might have a bit less purchasing power, my recommendation would be, and I did warn you this would be a recurring theme, to run a few ads and target buyers from Tier 2 cities and target Tier 3. And let people vote with their dollar and determine which market you focus on. The results may surprise you. They might confirm what you already thought, too, but it’s better to have that data and information to back it up.
The next myth is that you need a warehouse. In almost all cases, you don’t need a warehouse when you’re starting and testing because you’re not operating a scale where a warehouse would make sense. You can get one if it’s in budget and you want to get started on a comparatively high budget. There’s nothing wrong with that. But it’s a myth to say it’s necessary. You don’t need a warehouse to sell into China.
[11:15] Likewise, you don’t need to build a new website in Chinese. You do need a page that will load in China that isn’t blocked or extremely slow due to hosting or anything like that. And in some cases, you need a stamp of approval from the government before channels will let you advertise on their platform. All that is just channels that protect themselves, because the government has these requirements, and they don’t want to get in trouble for advertising anything that’s prohibited. So, the government takes a look at your site, what you sell. If it’s not cryptocurrency, illegal drugs, VPN software, a few other prohibited things, then you’re good to go. If you’re not sure your website loads from China, send us a link. We’ll test it for you and let you know. What you do need, of course, is a website or a landing page in the Chinese language. If you’re sending Chinese people to a site in English, you’re gonna have very little success typically. So, what you can do is create a landing page and get that translated. Alternatively, you can get a WeChat Mini Program developed and sell straight from WeChat. Or you can sell on an existing ecommerce web store in China like JD, Tmall and so on. The next one, I think I’ve partly covered it. But translation is not all you need. Because you want to connect, right? The content and the vibe of the website or landing page, it needs to match Chinese expectations. They’re subtle differences but they’re significant conversion factors. The whole messaging of your ads and landing pages needs to be culturally adapted for the China market. So, to succeed, what you need is true localization. There’s not another way to put it really. Our China market experts can help you get all your strategic ducks in a row there if you don’t have the resources to do so in-house.
[13:25] And the last myth is that particular channels are the best or most effective, or you should only focus on a particular channel. But that’s not true. That’s not the case. It all comes down to three factors: what you’re selling, your audience, and what medium that you choose to advertise with. So, for example, it wouldn’t make sense to try and sell a product that is for people over 50 years old on a platform with 90% of its users under 35. It wouldn’t make sense to try and advertise on Baidu SEM, which is like Google SEM, its search ads, if your plan is to run video advertisements. That would be like trying to run video ads on Google. So, you’d choose Instagram or YouTube or something that caters to video ads, if that is your marketing plan. And just to further go into that point about what’s the best channel for X, this breakdown is one way to look at it. So, originally, this image was just the first four representing the different mediums. I added B2B just to give it a different dimension. So, there’s a million niches and verticals, and I didn’t want to make it overly complex, but this is a good way to visually break it down, I think. So, Toutiao is great for content marketing if you’ve got educational, inspiring, motivating, entertaining, written content. Social media is great, obviously not just in the West but around the globe. And just like around the globe, there’s slightly higher resistance to ads on those platforms because people are there to communicate with their friends. That said, they can be a great place to start, to test and even to scale, if you can stop people in their tracks and capture their curiosity. Search ads, much like Google Search is a new medium. We’re very excited about it working with a few early adapters at the moment. And we’ll be doing a release of the Baidu SEM platform late September. So, keep an eye out for the email that you’ll receive after today’s session with a little more info about that. If you’re gonna advertise through the medium of video, then something like Douyin, which is TikTok. And then, there’s Tencent Video. Platforms that cater to video makes sense if you’re advertising video. And B2B, of course, your best bet probably going to be LinkedIn and potentially search. Because people, they go on LinkedIn for business and work related activity. For search, if they’re looking for a particular product or service, then they’re searching it on Baidu. And it’s not like trying to advertise work tools on social media where you’re going to encounter a lot of resistance because people aren’t typically on social media while in the frame of mind of thinking about work unless you’re in marketing.
[16:30] So, what are the three biggest mistakes that new entrants make when it comes to starting in China? Well, the first is being wedded to a set method or strategy and being totally wedded to that. So, I’m going to set up a warehouse in this location, to work with this supplier, and run ads targeted too narrowly or too specifically. The second is not assessing channels and stores for the best fit. Like we covered, your channel choice has to match the creative type of ads that you want to run, whether that’s articles, videos, images, search. Your audience has to use the channel as well, and in enough month numbers for it to be worthwhile. The demographic has to be suitable, and it has to fit your product. That one’s a little subjective. Technically, you can advertise anything on any platform, so long as it’s legal. But culturally, certain things would be odd in a bad way to advertise on certain platforms because it doesn’t quite fit what you would expect to see on there. And there’s a way to play that where you can advertise something that you wouldn’t expect to see that stands out in a positive way, but it’s much harder to do or much less likely. The third mistake can be using agencies. Now, agencies have their place. Don’t get me wrong. I’ve just made a case for working with agencies on the support side of things for very good reasons. We work with a number of agencies and aren’t disparaging them or what they do. That said, if you’re running tests campaigns and trying to keep costs as low as possible, if you’re just trying to work out whether there’s a market for your product, you don’t need to spend so much on agencies; you just need help with a few tailored and specific things. Which is why in our platform, we offer a few different tiers of support. And if you’re just testing, you can get away with the necessary support at an affordable price without committing to anything. And if you do want all the bells and whistles that an agency can provide like creating the ads, launching the campaigns for you, we can do that, too. And with it all going through our platform, it ends up costing less.
[18:45]So, we’ve covered what some brands get wrong in China. But what do they get right? Well, they go after real feedback with test campaigns at an appropriate budget for the size of the company. They don’t try to guess whether it will be successful or not, if it isn’t obviously the way. They try to find out based on whether real people are interested or not. They have a flexible approach to their strategy. They understand it’s a dynamic market and going in with a rigid plan and sticking to that with no room to budge is a recipe for mediocrity at best and outright failure at worst. They know that mobile digital advertising is the dominant way to attract interested buyers and turn those people into customers, whether that’s through live streams with key opinion leaders or small scaled campaigns. Everyone online in China is connected to the Internet with their phone. Computers are just not as prevalent as they are in the West.
[19:50]So, I thought I’d take a moment to tell you about one of our clients, a food supplement company based out of Norway. And they came to us after trying to sell on JD in 2017, but sadly, just not achieving the results they had hoped for. And they are 100% natural health related product. And we helped them to run promo campaigns to increase their visibility, launch and run display ads across different channels, manage social media accounts across different channels as well, and just build that organic following. And our team also helped the brand to collaborate with KOLs across each of those channels.
And what difference did that make? Well, let’s compare their Singles’ Day sales in 2019 versus 2018. So, as you can see, massive increase in sales and conversions, almost doubled customers, and a massive increase in repeat customers, too. And that’s the combination of ads but also organic social media, building a loyal tribe of followers and fans who love the product and maintaining a rapport with those people. It will be very interesting to see their numbers this November for the 2020 Singles’ Day campaign.
[21:05]So, what do the winners do differently? Get the fundamentals in place. If you don’t, you don’t have to chain yourself to one particular channel, but you do need to find one to get started with. And we can help advise around that. You need to know who you’re speaking to and get your messaging straight. In marketing, I suspect many areas as well, there’s often this tendency to look for silver bullets, this one thing that’ll drive all the results or change. And in reality, it just doesn’t work like that. Most things marketed or sold as silver bullets are really just gimmicks or traps set by charlatans and sprung on the unsuspecting. And it happens to the people who want to cut corners and get all the results with minimal effort. The paradox here is that if you accept that there’s a process and you work through it, then you get to reap the rewards. Embrace the test and iterate approach, as I’ve said countless times, and I will continue to say throughout this session. And so just to clarify what I mean by that, myself and a friend are currently working on a business on the side. And our strategy will be starting with Facebook ads. And we’ve documented all the different channels that we want to use, the different groups of people we want to target, all the variations. And for our first batch of ads, we have to create and run 48 ads. And that’s huge. But what we’re doing is running all those at a dollar a day. And after a week, we cut all the ads that aren’t working for us and everything that is working, we increase the budget. And then, we come back and check it a week later. Has anything stopped working? Turn it off. Do we need to launch some new tests? Okay, time to start thinking. Is there anything that’s worked really well that we want to further increase the budget? And so on. Do that every week until we reach a point where things start to stabilize. Well, that’s what I mean when I say, test and iterate. Now, to be sure you don’t need 48 ads. We admit we’re insane, and it’s a crazy approach to take. You can do the same thing with five ads or even three. The point is to know whether you have any chance of getting traction with your ads, you need to check the different angles. And so, it doesn’t have to be all done at once. You can test just a couple of ads each month and take a slower approach. It all comes down to the resources you have and what makes sense. Rarely do the organizations that don’t succeed in China fail because they can’t craft an ad that gets clicks and gets traction. They typically failed long before that. It could take some time to dial in a winner that performs super well.
But the market is extremely large, and if you target the right people in the right ways, there’s essentially no market that would really be considered overcrowded from our perspective. And Jie speaks about this a lot. I was at the shops on the weekend, actually, and it struck me how many companies sell something as basic as bottled water? I’m based in Perth, so the most isolated city in the world, yet we have Pump, FIJI Water, Aussie Natural Spring Water, Mount Franklin, those ones that come in the cylindrical container, I think they’re called VOSS, Frantelle, Evian, Yaru, the No Frills brand, one that’s called Balance, Pureau, Cool Ridge. And that’s before you get into anything like flavored water or sports drinks. And by the virtue of the fact that they’re still present on the shelves and selling, well, it must be profitable for them to do so. And that’s a very, very extreme example. I think it would be fair to say it does seem like it’s a little bit overcrowded to me, and I feel that illustrates the point. Well, we don’t perceive many industries to be overcrowded in China. And you only need to capture a small slice, a small segment of buyers in China or anywhere in the world, and you can have a profitable business.
[25:30]So, I’ve just said most brands don’t fail because their ads are no good. Which begs the question, why do they fail? Well, because they make these big decisions too early, like logistics, like marketing strategy, and they commit too heavily to a greater scale. And they don’t allow any flexibility or new information that they can use to adapt. See, if a company had set a plan in early 2020 that didn’t include live streaming in China, then you would likely have left a lot of money on the table by failing to adapt to the, not exactly new trend but massively increasing trend, once it was showing how powerful that can be. Likewise, there’s also a failure to adapt to the market. It’s certainly possible to take the ads that you run in the West, translate them and launch those in China. But given the cultural differences, it’s likely that there is a better angle or a tweak that you can make that would let you connect magnitudes better and stronger with people in China. That rigid thinking is what holds a lot of companies back and stops them from realizing the success that they could otherwise often achieve. And the third is just not seeking help at a level that makes sense for that organization. So, true localization and developing a brand is done with keen insight and strategic intentions. A Western brand doesn’t just figure out how to connect with Chinese buyers by accident.
[27:05]On the flip side, a bit off flexibility goes a long way in this arena. And working with us in the capacity that you need means that you’ll get the strategic ducks in a row to avoid the common pitfalls. And that way, you get the tests, you get to see the data breakdowns, you learn to stop targeting people in certain demographics who clearly aren’t interested and to go after those who are, and you can clearly see who that is. So, each time you iterate, you get better and better results.
[27:40]And I just want to show you how easy it is to create and launch an ad on the AdChina.io platform. That’s the video there. It’s incredibly quick and easy. Once you’ve planned out who you’re targeting, to go in, set it up and launch an ad. Doing that on the native channels is very clunky. Done it myself. Hated it. Google Translate is bad when it comes to Eastern languages, unfortunately. So, there’s options and settings that not exactly sure what they do. You need to validate your login multiple times. The layout is noticeably different and not particularly intuitive. Whereas we make it just like advertising on Facebook or Google, actually, easier in some ways because the layout is just so uncluttered and clean. Some of the advantages of this tool is that you can choose which channels you advertise on, get your account set up and start doing it without even speaking to us if you want. Or you can contact us, we can work with you and we can help you. I would definitely recommend that approach due to the China market knowledge of the team. But again, it depends on your budget and your resources. Either way, you get real feedback. People either like your ad and click through to it or they don’t. And there’s a lesson in there either way. They click through then they see your product, and they either like it and they buy it or they don’t. And there’s a lesson in there as well. Is it the wrong audience? Does it cost too much? Maybe the ad and the product don’t align that well. Maybe the site loads too slowly. Once you find the suspected problem, test, try it again, iterate over and over until you dial in a winner.
[29:25]I wanted to tell you another story about a client who came to us earlier this year, in fact. They’re in the legal field and wanted to expand and start their growth into China. And they had no plan or path for how to do it and no previous experience in China, but they had a hunch that China might prove to be a valuable market. So, they decided to join AdChina.io when they saw the depth of knowledge of our Shanghai team, as well as the detail of reports that they can see in the platform. It perfectly facilitated the test and iterate approach. And that was what they wanted. So, we worked with them in a number of different ways. And this firm was actually one of the early adopters to the Baidu SEM platform that will be released next month. Anyway, we created their SEM strategy, did a competitive keyword analysis, optimize their keywords, localize their website and landing page by adding Chinese translations across all of the sections and content on their page so it presents in both English and Chinese. And another option would be to use a language plugin. It just depends on the underlying architecture of the website. But we developed audience segments because there’s very different services the firm offers and, of course, they’re not all applicable to everybody so you want to target. And the team set up the search ads and the display ads. And what were the results? In week 1, the campaign’s combined drove over 4,000 click-throughs for an extremely low cost per click on the display ads. And in week 2, the budget was increased 2.5 times and predictably, that achieved 2.5 times more clicks. And just tweaking the ad, it was able to lower the cost per click of the display ad further still. On the search side of things, the click-through rate – So, not the total number, but the rate increased 58%. So, it’s just like what I mentioned that I’m doing with the Facebook ads. Collect the learnings after a week, switch off what’s not working, ramp up what is working, and the ROI increases. Create some new tests and continue iterating.
So, taking all these learnings, I wanted to show the method of winning from a very zoomed-out bird’s-eye view that will break down in a moment. But step one is using the ads in China to unlock a greater volume of sales. And to do that, you need a clear strategy, but one that you can adapt to. You need some level of support so that you can localize your message. And if you aren’t localized, you do stand out and not in a good way. It can come across as unprofessional and low quality. I mean, just think of the last time that you bought anything from someone that you felt was low quality.
[32:30] So, what does it all boil down to? You need the strategy because you need the fundamentals. You don’t want to wed yourself to any logistics supply or any expensive contractual obligation prematurely. In the same way that hopefully, you don’t want to wed yourself to a partner without vetting them first, looking for green flags, and progressing in a healthy and balanced way. You need the support because if your message is off, all your efforts fall apart before they consider your product on its merits. If the subtle communication indicates low quality, it’s very hard to change that perception. It’s an uphill battle that you’re best to avoid entirely. And you need something to attract your Chinese buyers. And that’s where the ads, the messaging and the marketing comes in. Running those tests and getting real feedback from real people. And when you marry all these elements together, you have the key. You have the winning combination that will unlock your ability to sell more effectively and more efficiently.
And to break our Venn diagram down into specific steps, first, you have the strategy. Your research and finding out what’s working for others in the industry. And maybe you’ll learn a thing or two about what’s not working as well. And you take those learnings and then you get clear on who you’re targeting and their profile. So, brands don’t create buyer personas because they’re fun to make, they do it because it works, it gives them clarity on who they’re speaking to in their marketing and their advertising, and all of their messaging. Then you need to figure out, how am I going to sell? Is it a website or landing page? Is it through JD or Tmall or another online marketplace in China? Is it through a WeChat Mini Program?
[34:30]From there, if you’re new to China, you’d want to put a market entry plan together. If you engage in our subscription services, we put this together with you. And from there, you set up the accounts on the channels. And you can do that within the AdChina.io platform, which is why I said earlier, it’s possible to run your ads into everything without ever speaking to us if that’s what you want. From there, you determine the content plan and map out how you want your ads to work.
Do you want to test a stack up front? Or do you want to go a little more slowly but get started sooner? Then, you ensure that you’ve got accurate translations on those ads and any copy that’s attached to them. You’d also make sure whatever point of sale that you choose is properly localized and tailored to the China market. You want it to connect. And from there, you’re ready to start advertising. You need to launch and monitor those ads, view reports, dive into the data, find the learnings, and take forward with you into the next campaign the things that are useful, and discard, switch off the campaigns that aren’t working. And the only tool that lets you do that across all the top channels is AdChina.io. Better still, it’s all in English, and really, it’s just like using Facebook or Google. Then, you just keep making progressively more accurate campaigns until you find an audience or audiences that are well matched. And when the slide here says scale horizontally, then vertically, it’s just like I was explaining with those Facebook ads. You pump out a bunch of ads, find out what people respond to, and focus on doing more like that. That’s the horizontal part. The vertical is when you find the ads that are working well and you allocate them more budget and you scale them up, just to explain that. So really, it all comes down to alignment.
[36:30]It’s been too long since I did it last, but I do thoroughly enjoy archery. And it occurred to me that it makes a perfect metaphor. To hit the target, you need to be in alignment. Your eye needs to be lined up with the sights, which need to be lined up with your target, and the string also needs to be lined up with the exact same point on your face each time. Everything in archery comes back to alignment. Another example would be firing a gun. Your eye needs to match up with the back sights, which needs to line up with the front sights, which needs to line up with the target. Everything is aligned. And if everything is aligned, then the arrow or the bullet, it’ll follow that trajectory. It’s the same when it comes to advertising. If you start doing things out of order or out of alignment, then and you end up firing off target. So, I put this slide together that illustrates, in an overly simplified way, the alignment needed from start to finish. And the reason I say it’s oversimplified is, for example, your translation is recurring, right? You don’t get your translation for every ad that you will ever launch on at once. But every time you iterate and test new ads, you, of course, have new text that needs to be translated. So, it is simplified. Alignment is still very important. So, from my perspective, AdChina.io is the key because we allow you to marry up those three components of strategy, support and advertising, and to do it in a tailored way that matches your needs and the stage that your organization’s at.
[38:10]And by virtue of working with us, you get the research, the audience insights, the access to the top advertising channels, and you’ve got your choice of subscription packages based on what your needs are. If it’s very little or scaling up to huge amounts of localization, adaptation and translation needed, then we can help you with that, too. You’ve got access to the China marketing experts. And you’ve got the tool to create and run these ads to see the reports and to get the learnings that will inform your future campaigns and allow you to iterate. So, two bits of feedback that I wanted to share from you. The first from a client in the professional services industry, “Baidu SEM provided our business with a great starting point for advertising in China. Our team understands search. And the AdChina.io team made the campaigns easy to execute. Our impressions, numbers and click-through rates exceeded our expectations.” And the other from a real estate industry client, “We were really excited about the potential opportunities that China provided for promoting our property portfolio. Running Baidu search campaigns through AdChina.io gave us great results and also a low risk approach to advertising for the first time in China.” We have many such stories. Those are our most recent. And it’s why we do what we do at the end of the day – To make advertising easy and accessible to organizations outside China.