FOUND Friday

A weekly Google Hangout dedicated to discussing content marketing, search marketing, SEO and more.

EPISODE INFO

Topic: Successful Global Marketing in China
Chinese markets are growing rapidly. For US brands wanting to compete, successful marketing will require more than just localizing content.

Speakers:
Ray Grieselhuber, Founder & CEO at GinzaMetrics
Karen Scates, Manager Marketing/PR at GinzaMetrics

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FULL VIDEO TRANSCRIPT

Karen: Hello. Welcome to this week’s edition of FOUND Friday. It’s May 1st and a beautiful day here in California. I’m your host, Karen Scates. With me today is Ray Grieselhuber, our own CEO and founder. Hey, Ray.

 

Ray: How are you doing?

 

Karen: Pretty good. How are you?

 

Ray: Pretty good. Thanks.

 

Karen: We’re here today to talk a little bit about successful marketing and global markets especially in China. Ray, you were recently at ad:tech China, which is how this subject came up. You’re actually at a panel that was talking about creating content and managing that. I was surprised to hear that they’re doing content marketing in China. Can you give us a little background about where they are in that whole process and where they’ve been in the past?

 

Ray: China obviously is a huge market. It’s a really interesting market for a number of reasons. I was also surprised before I got there that we’re doing this panel because my impression of China was that it’s very much a play-for-play type user acquisition model because of the influence of sites like Baidu and Taobao and so forth. That actually turned out to be mostly true. I didn’t know a huge amount about the Chinese market before I went there and have a chance to talk with a lot of people there. Sure enough, it’s definitely [1:33 inaudible] over there.

 

That being said, there is a lot of room for content and well-optimized content and high-quality content. But it just happens to be a little bit different than what we do here, so we’ll get into that during the show today. It was a really interesting panel discussion overall.

 

Karen: Actually, that was going to be my next question. How is content marketing different there? I know here, when we talk about content marketing, we keep saying that you need to be authentic, you need to be helpful, you need to not be selling your brand but to be helping your audience to understand the market or solve a problem. Is that the same approach they’re taking in China?

 

Ray: I would say overall, no. The reason is pretty simple. It’s also responsible for the other major difference between content marketing here in China. In China, you basically pay for traffic. There are certain things that you can do through social a little bit. Some search, some overall organic means but basically you’re paying for traffic. What that means from a marketing and sales funnel perspective is that here in the U.S. and in a lot of other markets just be helpful, be useful first, add value before you expect to extract value from a customer. All of that relies heavily on the idea that you can acquire traffic that you don’t necessarily have to pay directly for. You can use those sorts of techniques to get people into your funnel. So it’s very much top-of-the-funnel situation. Whereas in China, the underlying assumption is that you’re paying to get people into your funnel. The question is: what do you do from there in order to convert them?

 

Broadly speaking, the biggest difference between content marketing here and in China – you might even debate about whether it’s called content marketing or more like content optimization because in China, once you have people on your site or on your store on Taobao or so forth, it’s much more about converting them. Conversion optimization is much more important. Leading people directly towards exactly what you want them to do is much more important, as well.

 

Karen: How is it the same? Is it the same just because of the type of content that they’re creating?

 

Ray: Blogs are a thing. One of the things that was surprising was actually more important than blogs in a lot of the other types of content we get involved with. The one area where I do see a lot of branding conversations and opportunities and also opportunities to build up some more of an organic user base is in forums. Forums are obviously big here in the U.S. but they’re absolutely huge in China for a lot of different types of products and services.

 

Smart companies need to be very keen on managing their reputation on forums, monitoring all of that information, making sure that if someone says something negative about them, that they’re in there engaging with people. That’s probably the closest thing that we have to what we have in the U.S. where you don’t necessarily want to be overselling what you’re doing but you do want to be as authentically as possible engaging with your customer base.

 

Karen: Are they doing things like video and putting them on those forums? Are they making/preparing content and distributing them on those forums? Or is it more like a conversation?

 

Ray: It’s more like a conversation, yes. It’s much more like what you would think of as a forum conversation.

 

Karen: While you were there and you were on the panel and talking to other people, what do you think was your big aha moment and you thought, “Marketers back in the U.S. who want to try to be successful here, they really need to know this thing”? What was that thing?

 

Ray: The biggest thing that I had learned about was the influence that WeChat has. Some people will know, some people won’t know. It’s a messaging app. In the U.S. we have WhatsApp. We have Facebook Messanger. In Asia there’s LINE. LINE has a very small presence here in the U.S. but it’s huge in Japan and some other Asian countries. Viber is another messaging app that was acquired by Rakuten I believe. They’re not as big but they’re in use in some areas, as well.

 

The biggest difference that I saw between all of the other messaging apps and WeChat is that number one, WeChat has insanely huge subscriber base. I don’t have the exact number in front of me, but it’s something like 600 or 700 million people are using it within China alone. It’s a huge audience.

The other thing is the type of stuff you can do with WeChat. In the U.S. – WhatsApp is probably the most, maybe in Facebook Messanger right along with probably two most popular messaging apps, even Snapchat which is much more visual-based – they have very limited sets of features. WeChat does literally everything. You’ve got all the normal chat functionality messaging, photo sharing and everything else, also similar to what Facebook allows you to do or LINE allows you to do.

 

Companies can set up corporate pages within WeChat. WeChat is used in many ways as the gateway to a lot of different websites. You can follow companies. You can get mail blasts from message blasts from them and everything else. From a marketing perspective, it’s really important for companies.

 

Also, it’s connected to a lot of other services. There is a Uber competitor in China that has a huge user base. You can order taxis directly from WeChat. There’s payment systems integrated directly with WeChat. There are all types of e-commerce and other sorts of integrations there, as well. It’s a massive application, massive platform. I haven’t seen anything like that.

 

That was definitely a big surprise for me to learn about it. What that means from a web content management and creation perspective is the front end is all this application-level stuff. In the backend – backend meaning when you go to a company site directly through WeChat – you’re basically going to a website that to one degree or another should be optimized for mobile.

 

That’s where a lot of the mobile optimization recommendations (even the type that Google puts out) starts to become really important. Actually, today there are still very surprisingly a large number of sites that are not well optimized for mobile-user experience. What that means is that you have a big problem with conversions. So people are just not converting where they should be.

 

That was the big aha moment for me – the influence that WeChat has. Some of the problems and challenges that I’m seeing companies struggle with right now are: one is that mobile optimization. The other one is also WeChat itself as a platform. They have no incentive doing it. They also do not release a lot of data.

 

So if you’re a marketer, it’s really hard to get information about how successful competitors are on WeChat. It’s hard to get information about how successful even you are. You can get some basic subscriber-type data. But there’s no user targeting data or anything else, so when you send out these messages, you’re literally blasting your entire audience. There’s no way to segment that out. I don’t know if that’s going to change. To me, it seems like if WeChat had an incentive to make that targeting better, then that would be a reason for them to change. But I just don’t know enough to say whether or not that’s the case.

 

Karen: Are WeChat, Twitter, Facebook, LinkedIn, and all of the social platforms, Pinterest and all those things lumped into one platform?

 

Ray: Yes and no. Probably in terms of the social functionality, the closest equivalent that we have is Facebook. It will be if Facebook was primarily chat-oriented instead of being feed-oriented so that the messaging functionality there is very similar. You’ve got stickers and all that stuff.

 

The primary way that people interact with each other is through WeChat. They don’t spend a lot of time on the phone. They don’t have access to any of these other services that we use unless these are VPN because they have a great firewall. I definitely experienced that. Through the normal default Internet connections, you can access Facebook or Twitter or any of that stuff. Basically, the Chinese Internet economy has built replacements for all of that and has their own twist on it. Facebook is probably the closest but there is some major difference, as well.

 

Karen: Do you think the platforms in the U.S. will move to be more of an all-inclusive platform like WeChat? Do you think that there’s going to be a market for that in the future?

 

Ray: It’s a really good question. The Silicon Valley mantra when you’re starting a new company is to have extreme focus on a very simple set of functionality that you can take to large scale. So it’s hard to get to scale. It’s hard to convince VCs to invest in you if you go on with the story of “We’re going to do everything.” It’s probably hard for companies that have because of that that have excelled in one area to expand into other areas.

 

We saw that a lot with Google trying to go into social with Google Plus. They built an expertise around search. They’ve done very well with e-mail and lots of other services but they have not nailed social. They’ve nailed a certain type of mobile which is more of the infrastructure level and the LS level but they haven’t nailed the user-level of that. Where with Facebook, they’ve gotten really good at mobile in terms of monetization and social, of course, but they’re not good at search and they probably never will be. It’s really interesting to see the way that this sort of cultural influence has an impact.

 

In China, there are some different things going on there, as well. You’ve got the government basically keeping out any foreign competitor, so that’s a huge one. WeChat was not a startup that just came out of nowhere. It’s owned by Tencent. It’s basically this huge company, so they can just fund whatever they want to do there. And they’re making so much money with their other businesses. They’re probably not making money on WeChat right now but it doesn’t matter because they’re making so much money with the other businesses that they just keep funding it as long as they want to.

 

Karen: What might surprise brands who want to create a market presence in China? When they first get there, what are they going to be surprised by?

 

Ray: One of the biggest surprises will be probably that you need to move beyond this concept of you have a website and your goal is to try to drive people to your website, especially if you’re doing any sort of transaction or e-commerce. Because a lot of that doesn’t happen on your website, it’s going to happen on these other platforms. We talked about the backend to these WeChat engagements. That may be part of it. But the thing is the users are never going to know that it’s your website. They’re just going to think it’s part of WeChat.

 

The other thing is if you’re doing any sort of transaction, you’re probably going to be on Taobao. Taobao is the largest e-commerce platform in China. It has two tiers. There’s the more corporate, private tier where you pay more money, then there’s the “free” tier. I’m not sure it’s actually free enough but it’s much cheaper and it’s much more for sole proprietor-type people. The problem with the free tier is that there’s not really any security or privacy or a way to verify that. The merchant you’re buying from is actually who they say they are. Where the corporate tier there’s a lot more of that identity verification so it’s much more secure but it’s a lot more money.

 

Also, of course, Taobao knows that they’re pretty much the only game in town in terms of e-commerce. So if you want traffic and if you want customers, you’re going to pay through the nose in order to get it. A lot of companies, they’re not making any money on it but they’re basically buying what they hope is long-term market share but they’re being bled for money over the long term.

 

There are a handful of companies obviously that have made it through and have succeeded. UNIQLO is actually a good example of a company that’s doing well in Taobao where they’re making money hand over fist now as a result. But they had to break into that top tier.

Karen: What do you think about U.S. companies who have already entered the Chinese market? Maybe they’re not having a lot of success. Why do you think that is? What do you think the biggest problems they encounter are?

 

Ray: It’s hard to say without talking about the company in question but based on what I heard and what I saw, it comes down to a couple of things. One is how committed are you, first of all. If you view this as, “We’ll dip our toe in the water in China and see if it works for a couple of years and maybe hire a small team there to try to do things, but we’ll have them run by an American manager so we can understand fully what’s going on,” it’s just not going to work.

 

Number one, if it’s not already in many markets, it’s the biggest potential consumer market out there. India may have surpassed that at some point for certain markets. But if you’re serious about global domination for your market, you’ve got to be investing in this 100-year plan. It can’t be 5-year plan. That’s the way companies need to be thinking about it. I would say that’s still very much true.

 

The other thing is if you’re going to do it, you need local partners. Unless you have people who have 10 or 20 years of experience in China that you can fully trust, then you’re going to need some sort of partnership. Taking the time to vet those people is a huge time-consuming process. There are a lot of foreigners who have been living there for a long time so there’s a good network that you can get into. A lot of it depends on your own particular business seats and everything else, but you’ve got to have someone who really knows what they’re doing in that market.

 

When you talk about content in particular and website creation and everything else, usually there’s this idea of there’s a global brand strategy. If there’s a global marketing strategy and global content strategy and it all tends to be centrally managed from the U.S. and they basically treat all these different countries as branches where they’ll just say, “We’ll take the content that we created in America in February and ‘localize’ it and ship it off to Japan (or whatever),” two or three months down the road, it’s just not going to work.

 

It doesn’t work in Japan. That’s been a long-time fallacy that that’s something that’s actually a legitimate way to do things. It doesn’t really work anywhere except maybe other European countries. Even then, I would question it. But in places like China and Japan where it’s just so different, you really have to create native content, native branding, native strategy. Again, in order to do that, you need to have people who actually know what that means.

 

Karen: We talked a little bit before about what kinds of brands are really successful there right now. We talked a little bit about how the Chinese population, especially the upper class, is embracing some of the luxury brands. If you’re not a big brand name here in the U.S., are you going to have more trouble there?

 

Ray: Yeah, for sure. This is actually a phenomenon that I’ve seen in Asia everywhere. Japan is certainly true. Korea is the same. Taiwan is the same. Basically, the brands that do well in their own markets, especially luxury brands, they will succeed because they have this recognition in other countries. If they’re perceived as a high-value brand in America or in Europe or even in Japan, they have a much better chance of succeeding in China. If you’re some company that nobody knows in the U.S., that doesn’t have any sort of global brand recognition, there’s no reason to expect that you can go in and suddenly discover or build a market in China that you just couldn’t achieve elsewhere.

 

It makes sense. China is a country of at one point six billion people. It’s not like there’s any lack of business opportunities there. It’s not like there’s any lack of private companies, especially companies that nobody knows about outside of that market. So why would they want to walk in some new company that nobody heard of just because they’re foreign. That sort of brand importance is a really big deal.

 

Karen: I want to go back a little bit. You touched a little bit on the importance of mobile and optimized for mobile. Do you feel like the companies who are Chinese companies get that and that they have optimized for mobile maybe more quickly than we have here in the U.S.?

 

Ray: Yeah. I would say speaking very generally that’s probably true. It’s hard to make a blanket statement to say that everyone has, of course, because there are probably lots of companies that haven’t. But a lot of these companies and a lot of these newer markets grew up with the mobile first, so they’re very good at doing certain things.

 

Karen: That takes us a little bit to the new Google algorithm change, the mobile-friendly. I think there are still U.S. companies who haven’t optimized for mobile. They feel like that’s not important. It seems like here in the U.S. and globally, the move is towards mobile. I just don’t know – how hard is it for companies to understand that really mobile is the future?

 

Ray: It’s been hard for U.S. companies because the desktop-based website market has been so big for so long and you’ve got an entire generation or two of developers, managers, and strategists and everything else who have grown up around that. Even though it seems obvious, it’s kind of a big shift in thinking.

 

I think people are getting it. They’re starting to see those mobile traffic numbers exceed their desktop traffic numbers. They’re starting to see bounce rates and conversion rates and everything else to be pretty visible compared to their desktop numbers. Overall, it actually is harder because in many cases, conversions for mobile don’t happen as frequently as they do on desktop anyway because buyers are used to making purchases in front of their computer, pulling out their credit card and everything else. We’re probably looking at at least another five or ten years before companies and user behavior catches up to that reality at least in the U.S.

 

Karen: Do you think in China that the user behavior is already there? There’s more use on mobile than on desktop, so companies have to be optimized.

 

Ray: Yeah, there’s no question. But even though that they’re not, a lot of them are. In terms of percentage, a lot of them are but a lot of them aren’t also.

 

Karen: That’s surprising, actually. I’m surprised.

 

Ray: It’s hard. Optimizing for mobile, especially when you have a big company or a big brand, it takes a lot of work. It requires a very highly-educated developer community in order to make that happen. Just from a technology perspective alone and from a web content management and creation perspective alone, there’s no magic wand that you can just wave and say, “Be optimized!” It takes a lot of work. It takes millions of dollars in investment. So it’s not going to happen overnight.

 

Karen: To wrap up, if someone is watching and they’re like, “We really think that we want to enter into global markets (maybe not even China specifically),” what things should they be thinking about? What are five or six takeaways that people can have in terms of their global marketing strategies?

 

Ray: I’d say first of all, figure out if it’s actually something that you should be involved in. It’s easy to hire people who want to be involved with the global market strategy because it’s sexy thing to say and it sounds good and all your buddies are doing it and everything else. If you’re not doing it, you’re going to feel like a loser. But you need to decide if it’s really the right move for your company. I would say for most multinational corporations, it’s a no-brainer. But if you do it, then you’ve got to do it for real. There’s no half-acid way to do this because it should be a very long-term strategy. You should be in the game to win. So if you’re going to do it, put the money behind it and build the partnership. Hire the right people. Make the investment. In order to do that, that almost by definition spells out the type of companies that are going to be successful there just from a pure financial perspective.

 

Karen: I want to go back a little bit to what you said about companies who are even trying to go global say in the European market, which is at least the same language – well, if you go to the UK, it’s the same language – but culturally, a lot closer to us. You’re saying that even just doing what they’re doing sometimes is not enough.

 

Ray: You mean Europe?

 

Karen: Yeah.

 

Ray: Europe is also a very diverse market. The other thing that’s tricky about Europe is the buying/user behaviors are still very different at the country level. We’ve been dealing with the EU now for so long now that’s it’s easy to think of it as one region. But we’re dealing with dozens of different markets, languages, budgets, behavior. There are so many countries in Europe where the idea of buying something online seems crazy. That’s a huge hurdle right there.

 

People actually go so far as to there are organizations within these large corporations. It’s not just Europe but it’s India which is even bigger, so you’re talking about the Middle East and everything else. They’re basically grouping half of the planet into a single region, which makes no sense whatsoever.

 

Karen: It seems like forming those partnerships and understanding the culture and the buying habits of each individual country that you’re entering – that seems like maybe something people want to do more of.

 

Ray: Yeah, definitely.

 

Karen: I think that that wraps it up unless you have some additional insights you wanted to share, something that you heard or found out at ad:tech China.

 

Ray: No. I think that pretty much covers it. It was a really interesting experience from that perspective. I would encourage anyone who is thinking about it to attend the ad:tech China next year. It was a nice group of people. There were a lot of foreigners there so you don’t have to necessarily worry about being the only person from America if you go there. I think overall the were probably between 800 and 1000 attendees, so it wasn’t a huge event but that made it nice because the networking parties and everything else were a good opportunity to really connect with people. I had a great time. I’ll probably do it again next year. I would recommend anyone who’s thinking about it as part of their strategy to do that as a first step.

 

Karen: Okay, great. Thank you for your time and we’ll see you next week.

 

Ray: All right, sounds good.

 

Karen: Bye-bye.

 

Ray: Bye.

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