I spent the morning with Philip Zhang, sales director at Sohu.com at his offices in the Science Park near the Academy of Sciences in Haidan. Through an interpreter, I learned some pretty cool stuff about Chinese web publishing, interactive networks, and wireless content strategies.
Sohu — which translates as “Search Fox” — is the grand-daddy of the Chinese Internet, and having listed on NASDAQ in March of this year, is one of the better known Chinese internet brands. It also helps that it is one of the few Chinese sites to have an English version, which at the very least allows inquiring Western browsers to check out what all the fuss is about. Soho is a site, but also a 1,700 employee networks that has a search engine engaged in a battle with Baidu (Baidu is the Chinese king of search. No one seems at all concerned with Google nor Yahoo) for dominance, has Chinaren — an “alumni” or social networking site; Focus, for real estate, and 17173 for gamers.
About 65% of the company’s revenue is from advertising revenues and the most profitable segments are IT, Auto, and telecomm (which includes wireless). Real estate is the most profitable segment for Sohu (not surprising, as I would say building materials is a bigger growth business than Internet, at least in Beijing). 10% of the income comes from wireless advertising — SMS, MMS.
According to Zhang, the primary online activities for Chinese users is pretty much the same as it is the world around:
The demographic for online users, vs mobile users, is 18-35 years old. Mobile skews to the 16 through 25 year old segment.
Sohu is big on blogs and claims to host over 4,000,000 blogs, where users can do the usual blog thing and upload to their hearts content. There are 40 million registered users in the overall Sohu “community” and the intention is to migrate that mob to the blog model over time.
Ads are sold on a day basis, let me repeat, a day basis. Not CPM or CPC. Day.
The killer for Sohu is the Sogu toolbar, this is their search play, and as I understand it, this browser plug in allows them to serve popups on other publishers’ site. This sort of freaked me out, and remember, this discussion was via interpreter so I may have misinterpreted it, but what I heard was this: the toolbar provides Sogu with the ability to “push” (I kept thinking Pointcast, but whatever) pop ups onto other sites.
Sounds positively Gatorish to me.
Rich media advertising is the hottest thing they have going. There is so much clutter on the typical page that it stands to reason that video based adverts are going to stand out. Sohu does offer a channel sponsorship model as well for exclusive ownership of specific “channels.”
On keywords, one cool thing they do is mash up maps with advertiser’s logos. Search for “Peking Duck” around Hohai, and bang, you will see the map with the Peking duck shops that paid for the right to be there appear.
Very cool stuff and further reinforcement that if you want to see the future of online advertising in large dollar volumes, go to China. If you want to make Jakob Nielsen have a seizure, ask him to critique any Chinese website. My favorite is http://www.it168.com — an IT site. I think I could count 14 ad impressions on the homepage, and some of them will induce epilepsy like that weird Japanese cartoon did to six-year old kids a few years ago.
More in a future post on Chinese page design and online clutter.
My thanks to Philip Zhang for his time. Very instructive. It’s a total battle of the bands over here and Philip says they have their hands full at Sohu dealing with the China market let alone consider exporting the model internationally.
Very few Chinese interactive media brands are operating internationally. Oak Pacific is looking for a US country manager. Sina has offices in the US. But so far, no hot interactive model has crossed out of the country. Give it time.