Advertising and Marketing

Ebay's China joint venture to waste money

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Don't mean to burst your bubble
Madison Boom is a blog about the Chinese advertising industry, subtitled 'The world, filled with egos". It seems to be written an industry insider and covers ad agency scuttlebutt, news about hirings, firings and campaigns.

Yesterday the blog reported news about Tom-Eachnet — the joint venture between Ebay and Tom formed after the U.S. auction giant realized that it could not crack the China market. According to Madison Boom, Tom-Eachnet 'has selected TBWA Shanghai for its new-platform launching assignment.' TBWA will create a campaign, apparently to run in September, to promote www.eachnet.com.

Asking a traditional 4A agency to do an ad campaign for a Chinese website! You can almost hear the money pouring down the drain.

It recalls Chinese blogger Gong Wenxiang's famous post titled 10 big mistakes of U.S. Internet companies in China. Below is Gong's mistake number 6, as translated by YeeYan (slightly polished):

U.S. sites get praise with no return, Chinese sites get good returns with no praise

Many US sites are well praised in China but can not make money. They all have the amazingly same marketing strategy: hire a 4A advertising company to design a set of elegant advertisement; put ads on subways and bus stations; make some web based ads for the niche market of white-collar; pay big bucks to top 3 portals to distribute the ads; spend a lot to buy Google keywords (note they don't use Baidu, since they only see Google and MSN in their eyes). Everybody likes their ads, but no one visits their websites. Even if there are a few visitors, the cost is way too high. Sometime it costs more than 1,000RMB ($130) per new user. And they still find excuses for not having traffic growth, such as the need to establish brand image etc.

Chinese competitors always pursue traffic as the first priority. They believe in the standard of getting one visitor for every penny they spend on promotion. It doesn't matter what happens next, they want to get the users to at least visit their sites. They think that high traffic numbers are the best way to promote their brand, and all that all those falsifying brand advertisements are useless...

...US sites normally have the plan to pay 10,000RMB for 100 high-end targeted users. Chinese sites, on the other hand, spend 1,000RMB to recruit 10,000 random customers. However, there are for sure 1,000 high-end users among them.

There are currently 4 Comments for Ebay's China joint venture to waste money.

Comments on Ebay's China joint venture to waste money

What is a 4A company?

'4A' comes from 'American Association of Advertising Agencies' and is usually used to refer to big U.S. ad agencies.

How do the Chinese sites get high traffic without good ads?

I would say that the statement is true: In China, the most important is not to make a strong marketing but to get lots of relations: the more you'll get relations with influent people, the more you'll success despite a strong or efficient marketing; That's one of the main reason why Chinese controlled websites generate a large traffic;

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