Since SES Chicago 2007, I had a pleasure of doing “Search Around The World” session with some of the best search engine marketers such as Mr. TR Harrington of Darwinmarketing. And, I was delighted when I had a chance to interview him about fast growing Chinese market.

TR Harrington 1. What is the focus of your presentation at SES San Jose?

There are so many interesting things happening internationally that the challenge for the speakers on this panel is choosing a select few!

I think there are a few key topics to this presentation: namely what is happening online in China, some of the key companies and trends, and how is search different in China, discussing some of the unique differences about Chinese search vs. other markets.

While some aspects of Search are generally universal, each market and particularly the Asian markets like China, Japan (as I learned from Motoko) and Korea have both language and cultural differences that Search expresses in unique ways as compared to the West.

2. Should Western companies consider doing SNS and/or mobile integration projects?

As search at some level is a reflection of what online users are saying and doing, one of the early topics of my presentation focuses on Social Media in China and the incredible story of TenCent, a Chinese company that that leveraged instant messenger (IM) as the core focus of its strategy to become…

…a leading portal,
…the leading blog site,
…the leading casual games site,
…and one of the few existing Chinese companies with the potential to become a future player in Search.

What is particularly interesting for Western companies is that not many of them even found a way to monetize IM yet TenCent ($524M ‘07) is much further down the road to success than a comparable social network like Facebook (roughly $37M ’07) at this point.

Tapping into social trends and understanding culture is not easy.  If your company is considering this, be prepared to face some really strong, well-financed and savvy local competitors.  There are still opportunities but in many ways China is ahead of (and different from) the West on this trend.

3. What do you hope that attendees will go home with from the session?

I hope that the audience will learn a few things about China’s online market, primarily the key differences and opportunities that we see from a search perspective and even how those business opportunities reach beyond search.  Mobile search and web surfing in China are interesting but not there yet.

4. You’ve been on the panel of Search Around the World session at some of the SESs in past. Have you noticed any differences in audience’s interests in China/Asia over time or by region?

The only thing that is consistent in China at this point is change ;) .

The leaders in terms of market share within a vertical (i.e. Portals) are relatively unchanged; however, what we are seeing overall is a growing shift in dollars from display to search (37% in ’07 to 51% predicted by ’10) and a likewise shift in dollars from traditional to digital media.

The latter shift in the market is primarily driven by larger advertising agencies, both global giants and large, local players.  Based on publicly announced digital advertising target growth rates in China, if agencies come close to their targets it should have a material impact on the entire online advertising value chain in the next couple years.

5. What are some of the typical mistakes that Western companies make when trying to enter Chinese market?

Many of the Western failures we’ve witnessed in China are the result of applying strategies that led to market success in the West would naturally lead to success in China.

The Chinese are not impressed that you are #1 in Germany or the U.S.  If you build a big size company in mainland China, they are relatively impressed; however, buying the present China local market leader is no guarantee for future business success in China.

As Yahoo and eBay China learned through their respective acquisition strategies.  Being #1 and staying #1 in a rapidly developing market is no easy task and it needs to be managed locally, not from the international headquarters.

6. What are the challenges that Western companies would face in doing SEO/SEM in Chinese market?  – Any advice to people or companies considering to do business with China?

The China is a market is developing too fast to be managed internationally.  That strategy has often failed in recent years.

Like Japan, China is not a market you can easily enter with just a few meetings, a handshake or an acquisition and then centralize decision making back to the company’s headquarters abroad.

If the Chinese are not sure if you are going to be in China long term, they will not believe it is worth investing the time to develop a relationship with you.  Relationships are developed more carefully in China and other Asian cultures relative to the West.

Instead, we recommend Western companies try to identify potential local partners who have a history of success, understand the unique ways that business is done locally, and have enough international business practices and shared culture that they can communicate effectively with you.

Working with a local partner(s) that has strong local knowledge and with whom you share a trusted intermediary is highly advisable.  You will need to trust your local Chinese partners to make decisions.  Given the speed of the market, the decision making process needs to be pushed out to the local decision makers.

7. What is your view of Search market in China in 2 years?

What I like about Search in China is that a number of key growth drivers appear likely to remain strong in the years ahead.

Access to new desirable content (i.e. latest peer to peer product recommendations) should be a key driver.  Related to my earlier comments on Chinese users habits of publishing more relative to other markets, new content will be a key driver for search as more content needs both organization and visibility.

The last and probably pretty obvious driver is the sheer number of online users potential (1.3B) and relatively small penetration (<20%, 230M) means that on the back of just new online users, unless we witness.

One key factor is the growth just within the online user population with more than 70% of those users able to access with broadband.  Broadband enables both more rich experiences but just as importantly for regular search users a broadband connection will also provide faster access to content that search users seek.

The increased user base, significant growth in websites and web pages, high search adoption and activity among user base.

8. I know that you live in China now, but what did bring you to there at first?

First was curiosity.  I’d read a few books in high school by author James Clavell, whose stories focused on different parts of Asia.  I always thought the culture and societies of the East were most interesting.

Second was opportunity.  After University, one of my roommates moved directly to Beijing in ’93.  I went to visit him the following summer in ’94.  I saw Shanghai when there was only the Pearl Tower in Pudong, a far cry from today’s skyscraper filled skyline of China’s and the world’s leading financial institutions.

9. What do you miss most about things back home?

For Hearts and Minds, People first.  Technology simply cannot replace being in someones presence that is of great importance be it family or friend.

For Body, Cheese steaks, Soft Pretzels and Burritos.   Food is home on many different levels.

10. What are you looking forward most from SES San Jose?

Primarily I really look forward to being surrounded by some really talented and passionate people who like to share knowledge.

As a close second to that, I ALWAYS look forward to whether Kevin Ryan will comment on my ‘shooting’ glasses if he gets a chance to introduce me.

I’d like to thank TR for sharing very interesting insights about Chinese market. I think many issues he pointed out are very informative to not only SEO/SEM businesses, but also to anyone who consider doing business with China.

See you in San Jose, TR!