Opportunities For Affiliates In China
Published 24th September 2015
As of December 2014, China is now the world’s leading economy in terms of size, releasing the US’ stranglehold on the top spot for the first time in over 140 years. China has also experienced rapid social development over the past few decades, now boasting the most Internet users of any nation in the world. According to InternetSociety.org and its Annual Global Internet Report for 2014, 46.03% of the population (or almost 642 million people) in China have Internet access, which represents nearly 22% of the total Internet users worldwide. As a nation, China is increasingly becoming an upper-middle income country, with the middle classes expanding at a rate not seen before in history and affluent consumer households in China set to reach the same proportions as the US by 2020 (see Figure 1). Couple this statistic with the fact that the population of China has largely embraced the digital age and mobile technology, and you have the perfect platform for opportunistic online affiliate marketers to step in and reap lucrative rewards.
Chinese online behaviour
The Chinese demonstrate similar online behaviour to that of Western countries, but display an unusually high level of online trust (see Figure 2). This translates into a strong receptiveness to affiliate marketing and the messages being delivered online. Plus, by February 2015, about 1.29 billion mobile users had been registered in China, with 81% of them accessing the Internet via their mobile phone. So more than ever before, the affiliate marketer can use digital marketing techniques to reach out to a large portion of the population in China, with somewhat of an expectation that their messages will be well received.
The way forward: forex and financial betting
Traditional online gambling in China is officially illegal under Chinese law, meaning affiliate marketers looking to gain a foothold in the market using the gaming industry risk incurring the wrath of the Chinese authorities in the process. However, financial betting, which involves gambling on the price movements of shares and other assets, is legal in China, as is the forex market. So for affiliates with aspirations to tap into the largely untouched China market, the opportunities are there for the taking when it comes to both forex and financial betting. According to iGaming industry veteran and CEO of Digital Fuel, Toby Oddy, this makes it a lot easier to reach the target audience in China, “Plus they love financial betting too.” Oddy’s top tip for affiliates looking to enter this space is to be sure they understand the financial industry, and that they recognise Baidu, China’s largest search engine, is a wholly different beast to Google. Baidu offers paid search and display advertising, as well as a content network. Affiliates need to be familiar with the nuances not only of Chinese search engines such as Baidu, but of social media sites such as Weibo. Paid search can be a successful method for obtaining Chinese traffic for affiliates. Oddy however warns that while it is relatively easy to advertise on Baidu and Weibo, they should be aware that operators are required to be licensed and regulated in a reputable jurisdiction to be permitted to tap into Baidu or Weibo’s services. Weibo is China’s equivalent to Facebook; boasting an astounding number of users in excess of those using Facebook, so the potential to maximize your social media strategy for conversions is considerably heightened by using Weibo. “If your brand needs to build in China, then the Baidu search network is the right choice”, Oddy said. Baidu holds 70% of the market, and its comprehensive tracking of all aspects of user behaviour allows for detailed profiling so that advertisers can target as they wish.
You will of course need to be prepared to work in the local language, because everything on Baidu is in simplified Chinese. It also takes time to open a Baidu account, and they will ask for a level of documentation far above what you are used to providing to Google, for example requiring your company to sign and countersign paperwork. Plus, you will be asked to set up a separate account for each domain you want to promote on Baidu, as they don’t allow agency accounts. Don’t let this put you off China though. As long as you arm yourself with the right information and insights, and you understand the differences between how Google and Baidu work, then you can benefit from operating in the digital market there. These differences reinforce the necessity for localisation, meaning you really need your business to have flesh-and-blood representation in China, or at the very least, consultants on the ground who understand the Chinese people, the market and its idiosyncrasies, as well as the communication channels that are best utilized to reach your target audience most efficiently in China. Another important thing to realise about Baidu is that there is about an 85% drop off in conversion when entering the Asian digital market. Because of this, it is crucial to build a rich depth of local content, and while the Chinese are large consumers of online content and are not wary of buying online, they do love to check a larger number of media sources before making a decision to buy. And what works on Google won’t necessarily cut it on Baidu. So, you will need new keywords that are relevant to the local market. The work you have done on Google can certainly act as a benchmark for your operations across Baidu, but don’t be foolish enough to think you can simply replicate everything you’ve ever done outside of Asia as you enter China. Baidu operates on a pre-paid basis, which differs from Google. The product also offers several different formats:
- Content Network (display advertising)
- Keywords/SMS – paid search
- Brand Zone
Baidu will take you through the set-up process step by step, and it’s is very similar to Google Webmasters. Make sure your structure, content and code is localised, and understand that it’s all about engagement and back-links. It’s not as sophisticated as Google, and while it’s currently cheaper to operate on Baidu, this is changing as demand for its services continues to increase. An average keyword bid on Baidu is around $9 per click, depending on the keywords you are pitching on. Basically, the biggest opportunities for affiliates and operators targeting China are in paid media. There are high volumes of potential customers that can be accessed through untapped traffic sources as follows:
- Lead generation websites
- Baidu SEM and display advertising
- Contextual display advertising
- Branded pop and overlay advertising
- RTB display advertising
- Email marketing
- Social media (Sponsored Influencers)
Email marketing can prove particularly successful in China. If you get a high quality list and can optimise it, you’ll have access to quality customers who are highly receptive to your communications. Social media, in particular Facebook equivalent Weibo, has something called “sponsored influencers”, who you can pay to promote your brand. These influencers have established credibility in the online community, and therefore a recommendation or endorsement of your brand can pay huge dividends in terms of building brand awareness, and ultimately sales. For example, a financial trader will promote and distribute your financial betting content. Readers will interpret this as a stamp of approval for your company, and it can contribute quite substantially to generating conversions. Baidu’s banner advertising or Display Network does have retargeting capabilities, operating a sophisticated retargeting engine. They look at interaction with other media, i.e. on Weibo pages, and on other different media that Baidu has control of the cookie pool or insight over. The Baidu Content Network is the absolute best place to start, and offers floating ads, overlays, and standard banner ads in GIF, JPEG and FLASH formats. Brand Zone is a unique service in that it gives you leading brand preference on your brand search terms. Effectively, it is a better advertising module that gets distributed across all of Baidu’s Networks, providing superior search results. This can be used by affiliates and forex brands.
So, while China offers excellent opportunities for affiliates, the importance of having a local partner in your corner who understands the market and the different traffic sources is clear. You would be well advised to seek out an experienced agency with localised knowledge that can set you on the right path in China from the outset. Otherwise, you could be unnecessarily wasting valuable resources and time on trying to manoeuvre your way through a maze of unfamiliar territory, advertising channels, and digital marketing tools that are foreign to you. Avoid the pitfalls of being the very naïve, new kid on the block, and you will be well placed for becoming one of the growing number of affiliate marketing success stories coming out of China today.
“Social media, in particular Facebook equivalent Weibo, has something called ‘sponsored influencers’, who you can pay to promote your brand.”
“Baidu’s banner advertising or Display Network does have retargeting capabilities.”