6 CHALLENGES US WEB FIRMS MUST MEET TO SUCCEED IN CHINA Going .CN
6 C H A L L E N G E S U S W E B F I R M S M U S T M E E T T O S U C C E E D I N C H I N A
Going .CN
What This Is
A Report for US Senior Executives at Web Firms trying to leverage
The largest Internet audience in the World The largest commercial market BUT an immature online advertising environment
Whose Revenue Model is based on Online Advertising
What We Did
What We Found
Six Unique Challenges US Firms Are Unaware or Ignoring these issues Bottom Line: No US Web Publisher Is Leading In
China Today They have no natural advantage in China
Overcome Fear of Labor
China has a lot of people who need jobs Brute force labor in lieu of infrastructure
Government likes massive headcounts Cultural expectations mean face to face is important
Automation is not a virtue
Contrary to typical US firm focus on labor cost saving
The Government – Obey, Lobby but Move Ahead
Multiple government (national and provincial) authorities and influence
Multiple, often conflicting, rules and regulations Close ties can be beneficial Get over the uncertainty and move ahead
Ask forgiveness if questioned But See the Great Firewall
China Has the Largest Online Audience. So What?
China Internet Audience is 100+% of US Audience But China Ad Spend is 5% of US And 80% of that goes to 6 players
Ad Models are unsophisticated Ad Buyers are different
Focusing on brand awareness Users Aren’t Transacting
Set Your Expectations Accordingly
Start at Zero – Build Up to What Makes Sense
No US Based, Cookie Cutter Solutions Rethink Everything for China
Offering Brand Model Systems
Local Leadership And Autonomy Is KEY
Deals Are Person to Person, Bargained For, and You Buy What You Can See
Even Online, Guanxi Matters
Everything Must Be Negotiable
Advertisers Don’t See Value Unless They See the Ad
The Chinese Internet Will Not Become the US Internet
Clutter Is Expected Entertainment Youth Community Provincial Mobile Café
Final Thoughts
IF Your Goal Is to Compete in China’s Online Ad Space, Don’t Wait…
Don’t Wait Because of These Challenges Chinese Internet Is Moving Even Faster than U.S.
Don’t Wait Because of Ethical Issues Ethical Issues Surrounding Media Especially Difficult But Not Going to Fundamentally Change; Make Go/No-Go
Decision
Compete Now
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