Digital Marketing is undergoing a period of intense change in China, and 2008 has marked a coming of age for the digital advertising industry in China as Advertisers and Marketers across the country and the region embraced the Internet and the power to connect with consumers through interactive, engaging new online ad formats.

This month, David Temple, the Regional Head of Search Marketing at Neo@ Ogilvy Asia Pacific spoke with Dr Mathew McDougall, Group CEO of the SinoTech Group in Beijing, Greater China, to find out what he sees as the major online advertising trends will be in 2009 and how marketers throughout the China and the region can tap the vast potential of the online medium.

David Temple: Tell me something about yourself and your position in the company. What were you doing before starting SinoTech? What are some of the other milestones in your life?

Dr Mathew McDougall: Well, I am the CEO of the SinoTech Group; I take on a very hand on approach in the company and try to have a good understanding of all aspects in the organization. I get very energized by being able to work directly with the clients and get a view of what they see as important for them in digital advertising. Before founding SinoTech, I had spent 4 years in China establishing another online media company that was focused on developing tools for optimizing the revenues for the website Publisher.

The most important milestone in my life, aside from my business, is my family. It’s amazing how this effects ones direction in life and ones goals and determination. I am married to a Chinese woman and now consider China my home.

David Temple: Please provide us a brief history of your company?

Dr Mathew McDougall: The SinoTech Group consists of three core business areas: Media Tech & Consulting, Search & Social, Creative & Production. Although these groups have different focus, SinoTech Group aims to provide a complete set of digital services. We were fortunate early on to build a strong relationship with China Media Exchange and be able to provide technologies and services of value to their customers.

David Temple: What is the core focus of the SinoTech Group?

Dr Mathew McDougall: Simple: Be innovative, transform the online advertising market and focus on developing world class products. In China, people tell me that we don’t need sophisticated advertising tools in China, that we are simply behind the West in our thinking and our advertisers are not interested in measuring performance. I just don’t agree with this anymore. Therefore, I founded SinoTech Group to provide media technologies such as ad serving and analytics technologies. You could consider this technology to be a Chinese “Double-click” like technology that was designed and developed here in China specifically with our unique ad serving requirements in mind. Moreover, our partners and advertisers requested we develop a web site analytics platform that could help them measure the online effectiveness and we are excited to say that we launch our 2.0 version later this month.

Another point often made to me was that Search Marketing in China was never going to be successful, that Chinese advertisers did not ‘get-it’ and Chinese Search Engines were not going to support SEO and SEM. This turned out not to be the case and our search organization, called SinoTech Informatics, now has a large team doing Search Engine Optimization (SEO), Internet marketing (SEM), and web design services. The shift in advertiser thinking and a broad adoption for SEM appears to have been greatest in the past 6 months; more interest from advertisers to help them understand search marketing and more requests to assist with ways to drive traffic to their websites.

Our SEM platform, SinoMaximizer was developed here in China and supports double byte, Chinese language semantics and is integrated at the API level with all the major Chinese search engines such as Baidu, Yahoo! China and Google. In fact, we were the first Chinese company to be granted access to Baidu’s API for search marketing and I believe that this can be attributed to Baidu now understanding the value and increased revenue potential that can be had with growing the revenues from mid- large advertisers. These kinds of advertisers that want to manage 1000-10,000’s of keywords and get the best return from this marketing spend.

David Temple: What is the future of search engine optimization (SEO)? Where will be the challenges in developing of the online SE presence in near future?

Dr Mathew McDougall: There are challenges all the time. The Search Engines’ are changing the way they see websites and that changes the way marketers approach their campaigns. I believe that the future will be very ads based by offering multiple ways to find the site, and niche portals and micro-sites will become more important for visitors to find results.

David Temple: What makes SinoTech different from other companies in the online advertising and search engine marketing industry?

Dr Mathew McDougall: The SinoTech Group has formed a strong relationship in China with the core search engines in China and our consultants provide tools, technologies and services to complement the digital offerings put forward and we are working hard to ensure we understand the scope of each campaign. As we sometimes need to learn the clients business, we keep everyone well informed and make all the constituents a part of the entire process. At SinoTech, we believe that our value is to our partners and increasing the value to their clients.

David Temple: What can we expect in 2009 for Chinese online media?

Dr Mathew McDougall: 2009 is going to be another fascinating year of social and technological developments driven by ever changing digital communications. The Internet and mobile platforms are fundamentally changing the way individuals interact and how “Chinese society” at large leverage communities to wield significant power and influence. Next year, I expect social networking, user-generated content, word of mouth, and video, wireless, advergaming to all have a major impact on our advertising industry.

David Temple: What will happen with social networking and user generated content in 2009?

Dr Mathew McDougall: Over the next year, social networking elements will broaden in reach and role as more Web 2.0 features become available for mainstream content. Homepages will serve as mini sites for the various threads of people’s digital lives and niche community sites will also grow further. According to IDC, China’s Web 2.0 market has shown great development potential and in 2006 the market size was US$62.8 million. By 2011, China’s Web 2.0 market is predicated to reach US$645.8 million.

To that end, brands should become smarter in how they participate and tap into the power of social networking. It must be noted that social networks are also great places for listening to the minds of your audience.

User-generated content (UGC) will become even more prominent and diverse. Expect to see UGC content/spin-offs migrate to mainstream TV, books and newspapers, and more high profile organizations get involved.

The main points to consider:

* Use the UGC sites as an insight into what engages your audience and what encourages collaboration.
* UGC is all about creativity; don’t go there if you don’t have a creative purpose.

In the word-of-mouth area, “amplification” will take over from “the long-tail” as the buzz word for 2008. Amplification is about tapping into the power of word of mouth—73 percent of young people say friends are their most trusted source of information. Digital conversations can go on indefinitely and do not follow a fixed time frame. In some cases, it can be self-sustaining, thus:

* All brands should monitor online buzz about their products-any brand serious about building relationships with its consumers should listen to what they say.
* Don’t underestimate the audience by spoon-feeding the entire story.
* Interesting stunts and events get blogged, and can achieve far greater audience through this amplification than ever before.

Dr Mathew McDougall: We have definitely seen a surge in social networking and UGC in China over the last 12 months. We expect this growth in users to translate into advertising opportunities as advertisers begin to better understand how leveraging social media can empower them to create virtual connections with consumers, opening up a new mode of communication and creating deeper connections with a brand audience.

The development of quantifiable metrics and best practices over the past year will only encourage more advertisers to participate in the UGC phenomenon next year.

At SinoTech Group we believe that the new online advertising solutions need to provide advertisers metrics and measures that they need to understand what the UGC phenomenon, what is important to the consumers in this space, and how to leverage digital marketing to get the most effective marketing impact.

David Temple: What do you see happening with video in 2009?

Dr Mathew McDougall: Next year, the true potential of video will be unlocked as this medium matures with the emergence of new tools to help edit and upload video. Collaborative filtering, RSS, and tagging will “amplify” the best examples faster and more broadly. Although we have seen consolidation in web sharing sites in China the page views will continue to grow and there will be attempts to develop new advertising formats to try and tap into potential advertising dollars.

The Internet will increasingly become a true “entertainment” platform and there’ll be more opportunities for advertising in and around online video, with larger audiences, more legitimate content, and more defined analytics.

Dr Mathew McDougall: The impact of video on the online medium is something we read about in the news almost daily. Video will continue to develop in both popularity and in potential for the online advertising industry next year. I personally believe that we will see a good degree of advertising innovation in this area.

David Temple: What do you see happening with mobile/wireless advertising in 2009?

Dr Mathew McDougall: Time will tell if the growth curve will kick into high gear for mobile advertising in China and I believe that mobile advertising will certainly go through some road bumps as the crucial transition to third-generation mobile telephony, or as 3G, takes shape next year when the new 3G licenses are issued in China. It is rumored that we will see 3G licenses before Chinese New Year and if this eventuates then I expect a scramble next year to utilize this additional speed.

Mobile advertising will simply become another element used in the online digital plan for advertisers.

David Temple: What do you see happening with gaming advertising in 2009?

Dr Mathew McDougall: All very good questions and online gaming advertising (advergaming) is something I am watching. Real video game-makers are the ones that have interaction nailed down. (Advertising with online games) is a very exciting opportunity and we’re quite interested in it. Online gaming communities, where PC users (usually teenagers and the 18-to-30 crowd) connect to play multi-player video games together on the Web, are extremely popular and largely untouched by marketers. SinoTech Group was commissioned early this year by Turner to produce games on the Cartoon Network and we are now selling in advertising. I see this new format becoming adopted more widely with specific Brnads.

I think once we can get ad serving technologies to ubiquitously place ads in multiple mediums that are targeted and measured we will see a significant adoption of digital technologies and rapid increases in online ad spend.

David Temple: Any closing comments?

Dr Mathew McDougall: By now you can guess that I am full of opinions and views on the Chinese advertising market. But just to summarize, I believe Media consumption will become less collective and more individual sophisticated, multiple pathways to individual consumers will develop. All media relationships will become interactive to a greater or lesser extent Consumers will increasingly determine their own use of media in a much more complete fashion, including deciding when they will accept marketing messages and when they won’t Metrics which measure ‘viewing’ rather than ‘engagement’ will disappear.

To date, most innovation has been in the form of ‘media firsts’ – finding new places to stick advertising. Until very recently there has been little progress in targeting here. I think we will see this change in 2009 and advertising targeting in Chinese advertising, such as Geo-Targeted ads, behavioral and contextual targeting will become standard.

I see the broad themes for 2009 will being:

· Relevance

· Interaction

· Relationships

Thanks for your time.

In our Digital Marketing Leaders series I am spending time speaking with Gillan Muessig. Gillian is the president of SEOmoz and a leader in the area of Search Marketing. I asked her the following questions:

Q: How did you become involved in the search industry?
I founded a marketing consultancy in 1981. In 1993, I became involved with companies building the first corporate sites on the web. Soon after Rand joined the company and we offered corporate websites to our clients. When the dot-com crash hit, clients had no capital expenditure budgets, but they still had operating capital. So I created a rev-share agreement and worked with companies who showed potential, were doing poorly online and built high-converting websites. We subbed out the SEO work to four companies without success. That’s when Rand turned his attention to search and learned it himself. In a short time, our clients were ranking well and they - and we - were making money. Rand started the SEOmoz.org blog as a way to share information and learn from others in 2004. In 2005, it was evident that our future lay in search, rather than marketing or web development. We re-branded and opened SEOmoz in Nov 2005. The rest is history.

Q: How can you use search to benefit smaller clients?
All of our earliest clients were small and midsized firms. Focusing on local/regional search, utilizing the long tail, and taking advantage of emerging technologies with relatively inexpensive ad opportunities such as social media and mobile ads can stretch a small budget for optimal success.

Q: Do you think it’s more difficult to keep up with industry trends in search marketing than it was a year ago? Why or why not?
It’s not more difficult to keep up, but it is more time consuming to get on the track now. Many of the top folks in search began their work/practice several years ago. Things were relatively simple (and spammy then. However, there is an ever-increasing volume of work on the subject of SEO. If you’re just starting now, it will take some time to ‘catch up’. I expect universities will soon offer degrees with a specialty in search marketing.

Q: Tell us about a successful search marketing campaign that you’ve run…what made it work? What made it fun? How did it benefit the client?
Early on, I worked more closely with the SEOs in SEOmoz. Later, I focused more on running the business. So my story is an old one.

We put a lot of effort into optimizing a hard money bridge lender. We made some mistakes, cleaned up the mess, and moved on. While the mistakes weren’t any fun (they stalled profitability at a time when we really needed them), we did learn a lot.

Finally, the site began ranking very well for some very competitive key terms. But our client still wasn’t closing deals. By calling into the client’s office myself, I discovered that the marketing and sales process inside the client’s office wasn’t functioning well.

The client was  willing to work with me and allowed me to run the phone number on the website through my office. I answered the phones as their receptionist for about three months. By perfecting the phone and response process, I demonstrated to the client that the website was generating solid, effective leads and that they could close a lot more attractive deals if they improved their in-house processes. Turning around a tough project and unequivocally demonstrating how to be successful to the client was fun, as well as very profitable for all concerned.

Q: How important is it to be “visible” in the industry these days?
That depends on the role you wish to have. Public speaking or even ‘visibility’ isn’t for everyone. I would say however, if you want to run your own SEO/SEM consultancy or agency, you’d do well to have someone in your company be a consistent and positive public face. Speaking, teaching, answering questions for news media, putting business related videos online, doing pro-bono work for larger organizations in the public eye can all increase the trust factor with a potential client. If you are targeting a specific market, say residential builders, you can provide a search marketing column for their newsletters if public speaking isn’t your thing. The more places you can point a client to in which you are seen as the expert in the field, the better. These are just a few of many ways to get the word out about your skills.

Q: How does link building fit into social media? Does PPC fit in at all with what you do?
I don’t think of social media marketing as strictly a way to garner links as they are generally no-followed or of low value these days. Social media marketing is very useful for direct target marketing to groups of people who are likely to be interested in your specific website/offer. SEOmoz doesn’t focus on PPC work, but in his keynote speech at SMX Singapore, social media expert Harrison Gevirtz pointed out that social media ads are still relatively inexpensive and an excellent way to tightly target and stretch an ad budget.

Q: Have you used any “questionable” techniques in search marketing?
These days, SEOmoz is focused on providing the best possible tools to search marketers. But we do serve some clients as we always want to keep our hand in the game in order to provide current, relevant information to our has a well-earned reputation for being strictly white-hat. It’s not so much a matter of whether a tactic is ‘right’ or ‘wrong’. Rather, the pragmatic question is asked, “Will this jeopardize the client’s current rankings or ability to rank better in the future?”. We serve clients who need to be in the SERPs for the next 100+ years. Therefore, we don’t have the leisure to play loose with whatever rules the private search companies want to impose on those who wish to be listed in their indexes.

Q: What industry trend leaves you cold and why?
Fear. I know it’s not exclusive to the search industry. But the wringing of hands and fear of shrinking budgets, etc. leaves me cold. You and I have spoken about this a few times in the past weeks already and we have both commented on a thread on the same subject. So, at the risk of being repetitiously redundant (sorry I couldn’t resist): This is a great time to be in search! Companies are slashing their ad and marketing budgets. Rather than simply hacking bodies, ad and marketing departments are pulling money from expensive print, TV, radio, direct mail, etc. and putting it online. The first boon goes to PPC. As soon as the number of bidders and bid prices increases, the next boon will be seen in SEO. Things move fast and marketing department heads aren’t stupid. We are seeing this money flowing into SEO/SEM right now. And I predict that when this is all over, that money will stay online where it is more targeted and the tracking metrics are so precise.

Q: What is the best part of your workday and why?
Opening the SEOmoz blog to see what’s new. I start there and go on to other sites, but it is always a thrill for me to see the new blog post at SEOmoz. I guess I still haven’t lost the excitement of seeing a goal accomplished. It was a lot of hard work to make SEOmoz a strong company on whom so many people depend for reliable, valuable tools, knowledge, industry information, marketplace and more. Just seeing the activity on the site and the constant updating of the blog, improvement of the tools, additions of partner offerings in the resources’ discount store, etc. makes all the hard years worthwhile. Like gazing at a beautiful child of one’s own, seeing SEOmoz active and in use daily is still the best part of my day.

Q: What advice would you give to young women trying to make a name for themselves in Search Marketing right now?
SEOmoz recently held an Advanced Tactics in SEO seminar. After a lunch break, I passed the men’s washroom which had a line outside the door. The women’s washroom had one other person in it. We laughed. Where else would you find the women’s room empty while the men’s room had a line out the door but at a Search event?

While there are relatively few women in the field of Search, be it marketing, analytics, tool dev, or otherwise, there is also relatively little gender bias. If you know your stuff and are willing to put in the hard hours, there is an exciting career to be had either as an independent marketer (ask Jill Whalen, Kim Krause Berg, Motoko Hunt, et al) or as an corporate specialist (see: Vanessa Fox, Natala Menezes, et al) .

The time is right! Jump in with both feet.

Thanks Gillian for your time.

One of the more enjoyable things we get to do on the ‘Digital Marketing Inner Circle” is interview interesting people I meet and get to know by being involved with the industry. This interview is with Motoko Hunt, Founder and Japanese Search Marketing Strategist. Born and raised in Japan, Motoko is now the chair of SEMPO Asia and has been the co-chair of SEMPO Japan since 2005.  She’s been active in this industry for at least ten years and seen a lot of changes happen.  Over the years she has found her niche in Japanese Search Marketing, including SEO and Paid campaign. I was fortunate to be able to take of her time and posed a number of questions to her.

Q: How did you become involved in the search industry?

Back in mid 90’s, I used to localize US companies websites and handing their online marketing such as site registrations, banner ads and press releases targeting Japanese market. As the market shifted and technology advanced, I started to focus on the SEO/SEM, and established AJPR in 1998.

Q: How can you use search to benefit smaller clients?

Apart from the budget size and maybe the manpower, the great thing about the search marketing is that it’s a fair game to everyone regardless of the company size. The search marketing can expand their market reach (from local to nationwide or even worldwide), improve the communication with their existing and potential clients, and help business owners to make an efficient and smarter decisions on investment. I believe that the search is the most effective marketing tool for your money, if you execute it right.

Q: Do you think it’s more difficult to keep up with industry trends in search marketing than it was a year ago? Why or why not?

I don’t think it’s more difficult, but I think that the type of the changes in trends are different in recent years compared to what we experienced in past. Up until a few years ago, the trends were mostly about the engines and the search. Now, integration of the different marketing outlets (web, search, social media, press releases, off line ads, etc) became more important than ever. It’s not just about SEO or Paid campaigns anymore. It’s like, “Ok, we have some experiences with the search marketing, and know how it can benefit us. Now it’s the time to coordinate it with other marketing outlets to create a campaign that will really benefit the business.”

Q: Tell us about a successful search marketing campaign that you’ve run…what made it work? What made it fun? How did it benefit the client?

One of the success stories of my clients is that they increased the conversion rate from the website by 130% within 6 months after the campaign started. We optimized the site to rank within top 3 in both Yahoo Japan and Google Japan with 95% of their target keywords, improved the landing page content and the internal linking. The fun part was being able to show the great results in ranking, increasing number of accesses to the site from search, and the conversion rate to the client to make them happy and to feel that they made the right choice to invest in the search marketing.

Q: How important is it to be “visible” in the industry these days?

Very important even if you are only targeting the local market. Various survey results show that most people search the web to obtain the information about the services or products that they plan to purchase. More visible you are in search, better chance you have to interact with the potential customers to influence their buying decision. Even in the markets where people still transact off-line, they do research online. I think visibility in the industry is very important.  Many potential customers tend to gravitate to “industry experts” they see at the various conferences.  Even more important is to have your thought leadership represented with blogs and articles.

Q: How does link building fit into social media? Does PPC fit in at all with what you do?

I don’t like using social media as a link building platform to improve your PR. When people use it to build links, it often leads to link spam, and destroy the user experience. If the users don’t like what they experienced there, they won’t come back, and it would defeats the whole purpose of “social media”. The links to your site/pages in social media really become valuable when the links are put on the page content such as blog body from a relevant site, and not in the comment section. The paid campaign could bring some successes through both keyword match and the content match on social media sites. Be selective with which social media sites to run your content match campaign.

Q: Have you used any “questionable” techniques in search marketing?

Nope. I don’t chase the algorithm, either.

Q: What industry trend leaves you cold and why?

Not a particular trend, but when a new trend comes in town, many people stop what they were doing and start to chase that new trend. It frustrates me. New trend simply means there is one more thing that you may need to consider. Those companies have successful website and the paid campaign know the importance of covering the basics and of having a solid project goal.

Q: What is the best part of your workday and why?

End of the day? LOL. One of the best part of my workday is to reporting the improved results to the clients. SEO and SEM are continuous efforts as the market changes and your competitors always improving their sites and campaigns, it’s very important to be able to bring the continuous improvements to all aspects of the success measurements such as ranking, conversion rates, and saving client’s money.

Q: What advice would you give to young women trying to make a name for themselves in SEO right now?

I’ll give the same advice that I give to my son and daughter. Whatever you decide to do, work hard and study hard to become very good at what you do. There’s no short cut. Networking definitely helps especially in this industry, but if you don’t have the knowledge and the skills, you won’t go much far. Believe in yourself, motivate yourself and push yourself. You are your best cheerleader!  A blog is often a great way to start making a name for yourself.  If your ideas resonate with people they will follow you and the more you are followed the greater your exposure.