Chinalytics Longmarch Blog

Omniture is coming to China. Big Time, judging from the announcement of the Baidu strategic cooperation last week. Or is it? I am still not sure. Having dinner with the Omniture
shortly before the announcement, they sounded more cautious that that.
With good reasons, I believe, since Omniture’s products and existing
price structure are not a good match for the mainland market. Yes,
there are sophisticated advertisers in the market. Yes, the market is
growing. But with Google Analytics as a free alternative and WebTrends
with established in the market since 2000 (more on that later), it
seems like an uphill battle rather than a quick win that analysts seem to believe in. China? Yeah! Baidu? Double yeah!!
But what does this partnership mean, for Omniture users, Baidu
advertisers and  shareholders in both companies? Lets take a look at
each group and try get some perspective

Current Omniture users
For
the select few Omniture users in China, this is good news. For the
longest time Omniture SiteCatalyst was unable to analyze and display
Chinese Baidu search terms correctly. They would show up as apparently
random double byte characters and you had to click through to the
original SERP to identify the term. This also lead to wrong popular
keyword results and was a general pain in the “you know where”. In the
run up to the announcement, Omniture has implemented a custom filter
for Baidu that solves the issue for all implementations that rely on
the standard Omniture JS tracking code. Since Omniture is highly
customizable, and customization often required custom JS codes, alas
that does not include us yet *sigh*. But there light at the end of the
tunnel. Does it mean that we will spend more money on Baidu? No. But it
means that we are finally able to do some meaningful SEM optimization
with Omniture. I would be curious to learn for Omniture Search Center
users in China how this announcement has impacted their business.

Baidu Advertisers
In the press release enable Haoyu Shen, Baidu.com’s
vice president of business operations is quoted saying that the partnership will enable “Baidu.com advertisers to increase the
performance of their online campaigns, by integrating [Baidu's] search
metrics with Omniture [...] Online marketers will not only be
able to measure campaigns but also improve conversion by making the
end-to-end search experience more relevant. Companies tapping the
Chinese market should now be able to reach Baidu.com customers more
easily.” That
sounds nice and makes sense, to a degree. Integrating search metrics
with web analytics (post click) data does allow effective optimization.
My question is: What is new? This integration was possible before with
Omniture SiteCatalyst as well as other tool including WebtTrends,
Google Analytics and Baidu’s own Tongji.
It will be interesting to see how this cooperation influences the
adoption of Tongji and how Omniture will adjust its business model to
persuade current Baidu advertisers to use SiteCatalyst or Search
Center. No details have been announced yet, but let please let me know
if you know more.
At the very least, the cooperation provides a great channel for
Omniture to work through. Search Engine advertisers tend to be more ROI
and conversion focussed and are natural targets for Web Analytics
vendors to go after. So if you do spend serious money on Baidu expect a
call from your friendly Omniture China / Baidu contact soon, explaining
the advantages of Web Analytics and SiteCatalyst /
Search Center. That could provide a significant boost for Web Analytics
in China, but the most sophisticated tool is useless, if you don’t have experienced analysts to interpret the data. Omniture and Baidu have their work cut out for them, and training web analyst has to be their first priority.

Omniture Shareholders
Omniture Shareholders are the group that has already seen an
immediate benefit of the cooperation, with the stock price jumping 6%
after the announcement, they have already made a tidy sum. I am not
building a sophisticated discounted cash flow model here, but for a
jump like that you need to assume a significant incremental
contribution to the bottom line from China (say 10%) in the near to
medium term (3-5 years). Based on my experience and the experience of
the eBay’s and Google’s of the world this seems to be rather
optimistic.

Baidu Shareholders
The partnership with Omniture is a signal for Baidu shareholders
saying. “Our advertisers become more sophisticated and experienced.
They take more control of their online marketing activities and look
for ROI. Some of them so sophisticated in fact that they need web
analytics tools that are more sophisticated than our own free analytics
tool.” If that is truly the case, it is time to break out the
champaign, since such advertised tend to spend a large and growing
share of their ad budget in search. Currently I see only a handful of
businesses that would qualify and see a positive ROI from a large
SiteCatalyst implementation, but I am happy to be proven wrong (please
use the comment section for that )

I am looking forward to learn my readers opinion and insights. So please use the comments section of this post, or send me an email.

Using Omniture in a more remote market (China, 210 million Internet users), I used to complain about the quality of the service we could get. Things took a remarkable turn for the better when Omniture opened an office in China.
Starting to dig into a WebTrends project for another client, I am facing the same problem. If anyone at WebTrends is read this, please let my know if you have a team on the ground. I would love to be in touch.
A Google search for “WebTrends China” turned up this article from 2000, stating

“WebTrends Corporation (Nasdaq:WEBT), the leading provider of
Enterprise Solutions for Visitor Relationship Management(TM), and
eBusiness Intelligence, announced today
that it has entered into a master distribution agreement with Ronghai Consulting, a leading IT systems consultant in the Peoples Republic of China.”

If anyone has heard of Ronghai Consulting or the people behind it, I would appreciate a shout as well.

Just Sunday I was taking a cheap shot a Omniture for spending their money on acquisitions, but neglecting the worlds largest Internet market (by users). Today I got an email that this is about to change. Omniture has set up a Greater China office in Taiwan, covering Taiwan, Hong Kong and China. (Why they choose the renegade province over the motherland I cannot tell.)
Regardless… My congratulations to Omniture, and congratulations to all of us lonely Omniture users out here. Darryl Su will be taking care of the PRC part and is coming to visit the middle kingdom in late February, early March. Please join me in welcoming Darryl. I will host a dinner, or even a Web Analytics Wednesday, when he is in town. Stay tuned for more…

Among the Analytics tool we are using, Google Analytics is certainly the most popular in China (Based on the noise in the local blogosphere and my own random test with Stephane Hamel’s great WASP tool) It is certainly the only company with a presence in the online market with the world’s largest internet population (Isn’t it ironic, considering how much money is invested in acquisitions these days?).
So I took the opportunity late December to drop by the GooglePlex here in Beijing to say hello to the team. Currently Yang Zhou is handing all the Google Analytics support for Greater China. While she is doing a great job, it seems the priority allocated to GAnalytics in China is still very low. With a reporting line to the AdWords team, only one dediated resource and no budget for outreach efforts at all, this is a very low profile presence. It seems noone at Google read my post Why Google (and Baidu) needs a Web Analytics evangelist in China. While I cannot blame them for not being a this particular club, they miss a large opportunity to trump Baidu in a market that they clearly have a long way to go in. I understand that that AdSense and AdWords are the revenue drivers, but showing advertisers the ROI of their search investment is clearly the best way to get more money out of their pocket. Our data clearly shows higher conversion, more engagement and great ROI for Search Advertising in general and Google in particular. Analytics is the key to these insights, and education and evangelism are sorely need. So Avinash, how about coming out here and sharing some of that Google Analytics goodness?

P.S.: Google’s Yang Zhou promised to join as many Web Analytics Wednesdays as she can. So why don’t you drop by and join us next Thursday if you want to meet her?

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.

In what could be a watershed event for Web Analytics in China, Baidu has made Tongyi, a self developed Web Analytics Tool, available to members of it Baidu Union ad network (Hat tip to TagEdge for the news). As I have argued before in "Why Google (and Baidu) need a Web Analytics Evangelist in China)",  Web Analytics is one of the most effective tools for search engines to demonstrate the superior targeting and conversion that can be achieved through a well run SEM campaign.
Readers of this this blog already know the lamentable state of web analytics in China, where 160 odd million internet users were served by ZERO web analytics vendors (counting commercial WA vendors that have offices in China). And While Google Analytics is used selectively, there is no analytics community to speak off, judging by the discussions during the recent Ad:tech Beijing, and my lasted swing through the local Blogosphere.
I trust that Baidu’s move in the area will spur the development in 4 ways

1. Expose small and medium local sites to web analytics for the first time and encourage them to run their site in a more data driven way.





2. Encourage Google to toot the horn of its superior tool (please correct me if you have seen more of Tongyi than me) harder and  invest more in teaching Chinese users how to use it.





3. Persuade specialized web analytics vendors that there is a market in China for their products after all and a market entry is in order. (at least once the corporate strategy team is getting over its M&A fever)





4. Following (1), inspire a group of local developers to build a "Chinese Omniture, Webtrends, Clicktracks, _insert successful US vendor here_.

Stay tuned for more on how this story evolves.

In one of my earliest post I mentioned that we are currently testing GA for some our sites. I am still impressed by the tool and what it allows web analyst to do free of charge. Some of they key benefits I see is so far

• Easy & quick to implement (especially when you track many sites, or third party coop partners this is critical)





• User friendly interface in English but also in Chinese (e.g. localization)





• Easy access to segmentation and comparisons, which allows quick on the spot analysis





• Great geo visualization. Each country and city within the country is displayed on clear map. This allows great segmentation based in city tier and provide. ( Other tool do that as well, but I have never seen it visualized as well)

So far my only gripe is with the geo segmentation. We have run 2 campaign with large partners, and implemented GA in their site. In both campaigns (Among the several million visitors), the most popular location is WuZhong city. "a prefecture-level city in the Ningxia autonomous region of the People’s Republic of China." according to Wikipedia. This just plain makes no sense. Beijing I can understand, Shanghai, Guangzhou, Shenzhen? Maybe. But Wuzhong? It seems some 3rd party data vendor has messed up, or its just all the unknowns that are put into the Wuzhong bucket. Ningxia jokes anyone?
Anyway, GA is a great product, and wider acceptance (with smart analysis) in China will certainly drive the ecosystem to become more effective and rational.

After a couple of esoteric post, this is somewhat more practical. At least for those of you in China, who are usering Omniture’s SiteCatalyst tool (What, that leaves…. only myself and our team, anyways).
In a recent campaign we discovered that 5 out of the top 10 next pages of our campaign landing page were actually other campaign landing pages of campaigns we were running during the analysis period. There was no direct link on our landing page to any of the other landing pages, so it took some time to puzzle this out.
Out best thesis is the following:

Omniture’s understates a landing page bounce rate significantly if,

1. Your campaigns has a high bounce to begin with AND





2.  You are running several ad campaigns at the same time,
   especially when the campaigns run on the same media AND





3. You are in China. None of our other geos had this problem, which is troubling…

Since Omniture uses a 30 min session timeout, users that
come to a landing page, bounce from there, and click on another campaign banner that lead to the same site within 30 min, are not calculated as bounces. In this situation the 2^nd
landing page will be treated as a “Next Page” in SiteCatalyst’s page flow. See graph (click to enlarge):

Taking these “Fake Next pages” into account, we found that our "Non bounced visits" decreased by more that 50%, which basically turns our conclusion on its head. Since we could not directly calculate the bounce rate for the fake next pages (it is not clear how many these fake next pages were coming for entries, as compared to in site traffic) we use a metric that should resemble the bounce rate as closely as possible: Bounce Rate* = (Exits + Fake Next page) / Visits. Its not the WAA definition, but a man has to do, what a man has to do. So here we are, with an even higher higher bounce rate, that almost seems irrational. I will keep you posted on our progress in eating this elephant.

In my last post I mentioned that we are currently using GA Analytics for one of our projects. So far I have to say, it is one sweet tool. It is easy to implement, has a very intuitive, easy to use interface and all the key metrics are there.

Some of my fellow analytics bloggers seems to believe that making such a great tool available free of charge is Google’s bid to monopolize the Web Analytics Tool market place (ala Microsoft and Internet Explorer). I believe nothing could be farther from the truth. In fact, I am sure Google loves any kind of Web Analytics Tool, from Omniture to Webtrends, from Clicktracks even to Microsoft’s Gatineau. That is because any Web Analytics tool, used well, will tell you that Search is the most effective driver of high quality traffic. And search, after all, is where Google is raking in the money.

Now, how to let EVERYBODY know that? You can tell them, again and again (and again). Some may believe you, other will think it’s just a sales pitch. So how about giving them the tools, to find out themselves and improve their whole online marketing process along the way? And giving them these tools for FREE?? This is what Google Analytics is all about.

But here is the problem: Now everyone has a great free tool on their hands. But do marketers in China don’t know how to use it effectively? The answer is in China is certainly no! And there is noone around in China to tell them! (especially in Chinese) You will find a couple of Chinese Blog telling you how to use Google Analytics. But there is noone telling you how to do comprehensive web analytics. The kind that gives you actionable business insights. That is what Google (Baidu) need an Analytics Evangelist for. Any takers for the job?

Shortly after I started my new career in Web Analytics, my friend T.R. Harrington from Darwin Marketing asked me which analytics tool I could recommend for companies in China. I could not answer his question then, and it is even harder to answer now.
During the last months I realized, that, although China has the second largest internet population in the world, when it comes to analytics and optimization it is still in its infancy. I attribute this gap to 2 key factors:

The lack of a mature e-Commerce environment: E-commerce sites earn the most immediate benefits from detailed web analytics. They are usually analytics pioneers since effective web analytics directly benefits their revenue.

The limited understanding of web marketing on the side of major advertisers, which are not aware of the
opportunities for “performance based marketing” the web offers, and how analytics  opportunities exceed what is possible in traditional TV, newspaper &
outdoor advertising.

Luckily at least the second factor is slowly changing, which is why my role exists and why Baidu’s stock price is continuing to rise. But since the e-commerce pioneers did not prepare the field for us, many basic tools and lessons are still missing.

I am not aware of any major analytics vendor (like Omniture or WebTrends) that has servers in China. Which is important since the slow intercontinental connections and Great Firewall can impact data tracking. Having used both packages, it becomes obvious that they are lacking in other areas as well. Omniture for example cannot correctly read search terms typed into Baidu, while WebTrends does not allow a regional analysis of Chinese traffic (and lists Chinese cities that no one in China has heard of). We will be running a trial with Google Analytics in the next weeks and I will let you know my impressions. But until then, please let me know your experience with Analytics tools in China in the comments section.