China's very own analytics solution (part II)

Oh, the joys of blogging! About 4 weeks ago, when I wrote a short post about Baidu's own web analytics tool, I got an interesting comment from Mathew McDougall of SinoTech Group, telling me and my readers that his firm developed a successful local web analytics package in house. Now that piqued my interest...

Fast forward 1 month and, China being a small place after all (at least in the tech industry), I got in touch with him and we had nice lunch at Kerry Center. It seems SinoTech has been offering their own solution to advertisers and agencies for a while, mainly as a value add to their ad server and / or ad network. After AllYes started asking us about tagging our landing pages with their tags, I start to believe that the local web analytics market is more vibrant after all. While this was a pleasant lesson learned, and I rejoiced hearing that even government owned sites start to run their tool, we agreed about the key roadblocks in the industries development.

• Lack of ROI focus on the advertisers side.When advertisers have no clear, measurable goals for their campaigns, and do not have to justify the ROI of their efforts, the value of web analytics is limited. Without a good business case there is a pronounce unwillingness to pay for analytics.
• Lack of Analytics talent. Advertisers s and agencies who get web analytics struggle to find talent to leverage the available data to create actionable insight that drive performance (wow Imagethief would have a ball with this sentence). While the industry in the US was build the back of business intelligence, market research and  e-business talent, all of these are in short supply in China (well with possible exception of market research)
• Lack of an e-commerce industry. The earliest web analyst in the west worked at companies like amazon and eBay. Comapanies that had direct revenue on the line, when they optimized their campaigns, creative and landing pages. Since e-commerce has be languishing for so long in the middle kingdom, there is no large analytics market either.
• Lack of a long tail. While this is not strictly when looking at traffic, it is certainly true, looking at ad revenue. Kaiser and Bill has some fun with the numbers and ended up with 60% to 70% online ad market share for the big five listed players. Turing the argument around it becomes obvious that the remaining 400 - 500 million US dollar cannot sustain a large number of small bloggers, webmaster, online family businesses or CPC arbitrageurs . It is these people though, manually optimize their sites for the smallest amount of Google juice, that  drive innovation in the industry and form another great pool of talent.

Some of that is changing, we both agreed and we are here of the ride. Welcome aboard, and please, dear readers, let me know if the Matt's analytics tool is any good, how it shapes up compared to Baidu and AllYes or Google Analytics and Omniture. My curiosity knows no bounds.

Comments

[Song]

I agree. Why China lacks web analytics awarness and talents, one reason is few of Chinese companies think management and marketing are something relevant to science. Most companies rely on some particular individuals' ideas. And analytics? I see scarcely.

[Douglas]

I agree with Song. In some of my research about radio advertising in China, I found that many station owners and marketing managers chose to go with their gut when making ad choices. They might, for instance, know that their daughter likes a particular tea or soy milk, so they will put that advertising in a more prominent time in the radio hour.

[Florian]

@Song & Douglas: I think we are certainly in line here. My way of putting it was: Lack of ROI focus . Marketing decisions are not made based on reliable numbers, but based on gut feeling, personal experience or existing relationships. That is changing slowly, but I believe for the better

[Dr Mathew McDougall]

I would echo the comments of Song, Douglas and Florian- China to date has not focused on ROI (in the most part) as a key metric for online advertising. However, I see this changing and changing quite quickly. We launched a Web Analytics tool (www.sinotechmedia.com.cn) only last year and the uptake has frankly been surprising. It appears that as tools become localized and suited for China, there is a real desire to use and understand web site traffic and usage metrics. I predict that this is a turning point in the Chinese market for website publishers.

[Florian]

@Mathew: If I were to draw a time line, I would begin the story of web analytics in China some time in Q1 2007. I agree with you and expect looking back at the year in Dec. 2008 we will new Year 2008 as a point when the growth really started, driven by more ROI focus, wider availability and better quality of free tools and a slowly growing community of skilled analytics practitioners.