Driving International Expansion Through Search

This is a live blog post from the Performance Marketing Insights Conference in NYC. These are my personal notes and thoughts from the session Driving International Expansion Through Search, presented by well known affiliate, Sri Sharma, Managing Director of Net Media Planet.

 

My notes and thoughts:

  • Internet sales and opportunities have grown by 100%
  • 47% Growth in China within the middle class
  • Europe sees a 65% increase of purchasing moving online in 2012.

 

Challenges to international expansion

  • Customer
  • Competitor
  • Operational
  • Regulatory

 

How can search help you?

  • Drive incremental sales
  • Build the international expansion business case.

Quick Stat: Google owns 89% of search and 97% of mobile search.

Don’t forget social media advertising space, such as Facebook in North America, V Kontakre in Russia and Qzone as the leading platform in China.

 

Understanding the Local Customer

  • What do they buy online?
  • How do they start their shopping journey?
  • How do they search?
  • What customers experience is important to them?

The Chinese Market – where we worry about quality of products made in China, they worry about brand credibility. An ongoing trend in China is paying by Cash On Delivery.

Identify primary competitors by product category.

Understand trends, customer needs, and market saturation by keyword.  Understand your competitors because it will help you figure out how to differentiate yourself in the market. Compare your pricing to competitors by product. Analyse messaging that your competitors use.  Analyse the competitor customer profile.

Messaging localization increases traffic and conversion rate. On-site localization increases conversion rate. Think about currency, words used in local areas, and language.

Use the Google Global Market Finder to understand local traffic trends and opportunities.

 

Develop the international business case

  • Grow brand awareness – phase based budget, channels in PPC, display and remarketing
  • Maximize direct response – channels: PPC, Remarketing, Display (RTB)
  • Develop insights – Trends: customer, competitor, multi-channel sales
  • Create recommendations – On-site experience, resourcing

If you take this approach, you can build a business case for any brand.

 

Top Three Tips

  1. Take an incremental approach
  2. Localise your marketing
  3. Call on experts to support your strategy

Is There a Market for Affiliate Marketing in China?

I had three very interesting phone calls last week from completely different people asking me about affiliate marketing in China. One, a US based investor asking my opinion about the potential of affiliate marketing in China, another, a Chinese branding company looking to do business with us and the last a New York based Chinese Affiliate Network focused on US product sales in China.

I asked a few questions to get a better understanding of the marketplace and their understanding of it.

 

Chinese Affiliate Network: ChinadGateway

I was really intrigued when these guys called me because they were looking for US based companies wanting to advertise to a Chinese market on a performance base. However when I asked how affiliate marketing worked in China, they said Chinese affiliate marketers generally worked on a CPM basis only. They do not work on a rev share or CPA model. When I asked why, they said Chinese internet marketers wouldn’t take the risk because Chinese buyers don’t generally look at unknown brands or products. Chinese online buyers want only recognized brands of products that are not manufactured in China. I saw two big problems with their model in targeting US advertisers.

  • US based advertisers would likely not take the risk of doing a CPM model if site traffic is unlikely to buy. Why would an advertiser buy on impressions that are not going to convert?
  • So many products in the US are made in China, so unless you have a recognized brand and it’s made somewhere else, like Italy, Canada or on home turf, you’re also not likely to convert. This just leads to very expensive ad buyers that will likely produce a negative return.

A conversation with a friend from a Chinese branding company added another issue to the mix:

  • Everything in the major metropolitan cities where people CAN afford to buy stuff is within arm’s reach. There is nothing you can’t get immediately going downstairs into the shops in your office building or walking across the street. If it’s a need, they already have it. If it’s a want, the only want they would have from US based retailers is something they can’t already get in person.

 

US Based Investor

Strange that this man called me after I had spoken to two Chinese owned companies looking to leverage the US Marketplace and asked what the potential was in the Chinese marketplace for affiliate marketing. After filling him in on my calls and my thoughts on the potential road blocks listed above, he too agreed that unless he could create a marketplace where Chinese buyers could easily purchase high quality products by international brands made in first world countries, the likelihood of success with traditional affiliate marketing was limited.

BUT, there lies an interesting opportunity here as well. If a niche affiliate network focused on only top level brands made in “first world” countries, would the world jump at the chance to market them? I think so. The challenge would be accommodating different performance models that are acceptable within the countries marketing the products while making them mutually beneficial and profitable to the sellers.

Maybe it’s not for those countries to change their models but for us to find ways to accommodate how they do business while making it profitable for us as well. Mutual win-win.

At the moment there is no “affiliate network” that does such a thing that I’m aware of. However ExactView (founders of Buy.at) has a model that is closest to this and might benefit from keeping these cultural differences and new market potentials on close watch. Who knows, maybe it’s time for a new Global Performance Network that will focus solely on filling this void.

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