6 CHALLENGES US WEB FIRMS MUST MEET TO SUCCEED IN CHINA

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 ChallengesUS Firms Are Unaware or Ignoring these

issuesBottom 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 headcountsCultural 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 beneficialGet 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 unsophisticatedAd 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 SolutionsRethink 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 ExpectedEntertainmentYouthCommunityProvincialMobileCafé

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 DecisionCompete Now

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