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January, 2009 “Introducing Search in North Asia.” www.sozon.com Digital Marketing Specialists

January, 2009 “Introducing Search in North Asia.” Digital Marketing Specialists

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Page 1: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

January, 2009

“Introducing Search in North Asia.”

www.sozon.com

Digital Marketing Specialists

Page 2: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 2

The Asian Online Landscape

SEO at 32% of the share is the strongest driver of traffic in Japan

- Impress Internet R & D Whitepaper 2007

Page 3: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 3

0%

20%

40%

60%

80%

100%

2000E 2001E 2002E 2003E 2004E 2005E 2006E 2007E

North America Europe Asia/Pacific Latin America Rest of World

Geographic Distribution of Internet Users (MM)

390 490 620 723 850 975 1,120 1,299

Note: ROW denotes Rest of the World | Source: Morgan Stanley Research

Asia (547MM users, +24% Y/Y); Europe (336MM, +10%); N. America (211MM, +3%);

LatAm (110MM, +17%); ROW (95MM, +27%)

Asian Internet User Growth

Internet Users 15+: comScore World Metrix, April 2008

Asia now comprises more than 40% of the world’s Internet users & is still growing rapidly!

Page 4: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 4

Source: Morgan Stanley Research

Mobile eCommerce: Japan

MicroTransactions via SMS: Philippines

Most Online Users: China

Online Gaming: China

Mobile Search: Japan

Social Networking:S. Korea

Blogging: Japan

Broadband:S. Korea

Asia also leads the world in many categories…

eGovernment:S. Korea

Page 5: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 5

Regional Search Spend Growth

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

2005 2006 2007 2008e 2009e

Japan Korea Australia China

• Japan, Korea & China represent almost 82% of Asian online ad spending in 2008

• Japan represents the biggest search market in Asia

• Korean search is proportionally the highest spend (almost 60% of total online spending)

• China is the largest growth market

Mill

ion

Page 6: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 6

1. APJ Internet user markets are still expanding rapidly, especially in SE Asia, China & India. More users means more searches.

2. APJ online advertising markets are still maturing in terms of overall spend. So search will only become more important as a tactic as online spending increases.

3. Search Marketing’s measurable effectiveness makes it more of a sure thing than many other forms of advertising both online & offline.

4. Traditional advertisers now see search’s place in the broader realm of brand building and maintenance.

5. The growing complexity of what is available online leads users to need search more than ever

6. Growing sophistication among users leads them to search with increasingly wordy keywords, which leads marketers to bid on more keywords

7. As paid search marketers in APJ become more experienced & sophisticated, they will bid on more keywords and generate better performances

8. There is a growing understanding that search is not just paid advertising, this in turn boosts companies investments in SEO

9. As ecommerce growth continues with emerging economies (i.e. buying online), this will translate into more value and higher volumes in searche

10. Search is increasingly not just for websites, but also for specific content such as video, so the scope of search is also expanding

10 Reasons Search will continue to grow across Asia

Page 7: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 7

60%60%18%18%10%10%

55%55%45%45%

60%60%10%10%20%20%

27%27%64%64%

20%20%70%70%5%5%

20%20%75%75%

25%25%51%51%

23%23%43%43%10%10%

43%43%31%31%11%11%

21%21%71%71%4%4%

Search Engine Market Share in Asia

5%5%

11%11%77%77%

Page 8: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 8

3 Key differences in North Asia Search

1. Language & Culture• Localization is essential• Keyword / Copy complexities• Technology - Doublebyte & API’s

2. Unique Search Engines• Local Players - Baidu, Naver, Yahoo• Unique Ad Layouts & Structure• Different approach to Natural Search

3. Multi Channel • Mobile Search• Offline Search Integration• Click to Call• Video / Social Media content

Page 9: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 9

Japanese Online Space….

Page 10: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 10

The Japanese Online Advertising Market

By 2011, Search will represent 36% of all web based online ad spending, with Mobile Search forecast to represent 40% of all mobile ad spending by 2011

Dentsu Ad Report, 2007* Includes banner, text, rich media, streaming video, tie-up and e-mail ads;** Includes image, text, tie-up, e-mail and (from 2007 onward) mobile search ads

0

50

100

150

200

250

300

350

400

450

2005 2006 2007 2008 2009 2010 2011

Fixed Internet ads* Search ads Mobile ads**

¥ B

illio

n

Page 11: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 11

Japanese consumers are online:

“More than 70% of the population are internet

users. Approximately 88.9 Million users….”

“There are more than 90 Million mobile internet users. (the largest in the world)…”

— eMarketer, 2007

And use search engines:

“ 92% of internet users use search engines to find information”

“51% of mobile users, use search engines”

- ComScore, 2007

“75% of the Japanese respondents said that if they could not find the company in the search results, their image toward that company would go down.

— Japan Ministry of Affairs Report, 2007

And it works!

“SEO (32%) and SEM (25%) are considered the strongest drivers of traffic in Japan by Japanese marketers.”

— Impress R&D Whitepaper, 2007

“32% of users that have seen a ‘keyword search ad on TV or a train, had actually used that key

word in a search”

— Goo Research, 2007

Search influences 20%-30% of all purchases made at retail locations.”

— eMarketer 2007

Search Marketing in Japan..

Page 12: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 12

The Japanese Engines

Natural Search Listings

Paid Search Listings

Distribution PartnersDistribution Partners

Page 13: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 13

• On Yahoo users tend to read only the first 2-3 words of each search result and then just scan towards the bottom of the page

• Google Japan users tend to read more of the title and descriptions of the search results page when compared to Yahoo

Japan – Comparative User Search Patterns

Page 14: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 14

Mobile Search is growing fast

Mobile internet users, exceed PC based Internet users in Japan, back in 2005.

Previously Mobile traffic was largely driven & controlled by network directories (menu’s) which only accepted “official sites”.

Mobile search has opened up ‘user access’ to all mobile content, sites and eCommerce.

Small screens & fewer results are leading to much higher click through rates and responsiveness compared to web search.

Searches tend to be much higher on the weekends & outside hours reflecting ‘mobile’ nature of use.

Search is expected to constitute 40% of all mobile advertising by 2010.

Page 15: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 15

81% have used Yahoo! Mobile with Google mobile second with 41.5%

Mobile Search Engine Usage

Page 16: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 16

In Japan - Search is “Cross Media”

“It’s a button on your phone” “it’s a keyword on every ad!”

Page 17: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 17

Japan Search Box & Keyword Integration

The majority of both television & train advertisements in Japan have a keyword in a search box as the primary user action, often with no URL.

A recent Goo Research Survey (Jan 2007) found that:– More than 60% of consumers surveyed had seen a television advertisement that asked them to search for a

key word? – More than 32% of those that had seen the ad, had then actually used that keyword in a search.

Page 18: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 18

Korean Online Space….

Page 19: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 19

The Korean Internet Environment

Korea leads the world in proportional search spending and high end internet penetration

Koreans are more online than anyone:

“More than 71% of the population are internet users. Approximately 34.8 Million users….”

“44.5 million mobile subscribers in total, or a 90.7% penetration rate…”

“85% Broadband penetration, the highest in the world”

Page 20: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 20

A unique approach to search:

• “Early search in Korea was restricted by the volume of Korean content online, so the engines created communities to develop content in answer to questions or searches.”

• “Knowledge iN” – the user created / community information database for Naver, features more than 70 Million entries and has made Naver the dominant leader in search (70+%).”

• Each engine in Korea manages its own database of content, one of the reasons that Google (2%) has failed to penetrate the market

• Korean search result pages tend to be very long, scrolling aggregations of different kinds of content – ads, news, video, blogs etc.

• In order to try and compete, Google released Universal Search in early 2008.

Search Marketing in Korea..

Page 21: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 21

Overture

Google

Other

Main Korean Engine’s

Distribution PartnersDistribution Partners

Overture Sponsored Links

Power Links

Pro Plus

Dictionary

Business Ads & Other Links

Google Paid Listings

Q & A

Image Paid Listings

News / Blogs / Video / Organic

Page 22: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 22

Naver Search Result Structure

Sponsored Links

Power Links

Pro Plus

Biz Site Ads

Dictionary

Q & A

Local Information

Shopping Sites

Books

Video

Prof Resources

Music

News

Web

Images

Page 23: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 23

Chinese Online Space….

Page 24: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 24

Internet User Growth • The proportion of Chinese internet

users in proportion to the Asian

internet population (3.71 billion) is

34.4%

• The number of Chinese internet users

has increased more than 110% since

2002

• In 2006 The proportion of internet

users to population (1.3billion)is

10.4%

• More than 82% of Chinese internet

users reference the internet to find

new information.

• More than 66% of internet users use

search engines.2002 2003 2004 2005 2006

68,000,000

87,000,000

Internet User

Increasing rate 72.8

%

45,800,000

123,000,000

80%

60%

40%

20%

0%

48.5%

27.9%

18.4%

19.4%

103,000,000

2007

137,000,000

China Internet Environment

Page 25: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 25

Engine use varies with Socio Demographics

And Socio Economic Status (High end user* Market Share)

Engine Preference varies by location

By user Age Distribution

* Aged 25+, 4 yr degree, Earn 3,000+ RMB / Mnth

Search Engine Share

BaiduBaidu

OtherOtherYahooYahoo

GoogleGoogle

Page 26: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 26

The Chinese Engines

Natural Search Listings

Hot Space

Distribution PartnersDistribution Partners

Exact Match Paid Listings

Paid Search Listings

Natural Search Listings

Intelligent Match

General Ads

Page 27: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 27

China – Comparative User Search Patterns

Page 28: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 28

About Sozon

SEO at 32% of the share is the strongest driver of traffic in Japan

- Impress Internet R & D Whitepaper 2007

Page 29: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 29

Sozon in Brief

Based in Ginza, Tokyo. Sozon employs 35+ experienced, multilingual professionals, uniquely focused on delivering seamless business results to our clients both domestically and globally.

A search pioneer in Japan, Sozon has focused on combining global best practice in search and online marketing services & technology, with Japanese attention to detail, speed & responsiveness.

Sozon has established, proven processes to help manage challenging communications, smooth project delivery and maximize both results and performance for our customers.

Sozon both delivers solutions in-house and partners with ‘best of breed’ technology providers / agencies both in Japan and throughout the world. Giving us more flexibility in providing competitive advantage

Philosophy & Services

People

Evolution

Process & Results

Technology & Partnerships

Founded in 2003, Sozon has evolved from a small Japanese SEO software company to a Search & Interactive Marketing agency offering customized solutions for the Japanese and Asian markets.

Page 30: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 30

Founded in 1996 • First Affiliate Marketing Provider in Japan

(1999)• 230+ staff Tokyo• Publicly Listed in July, 2006

Leading Affiliate Company in Japan• 1,700 Advertiser / Ecommerce clients,• 550,000+ media partners in Japan• 600 Million+ advertisements a day• 40% Internet reach in Japan

Strategic & capital Yahoo! Japan Alliance• Yahoo Japan investment in 2005• Numerous joint ventures

Completed acquisition of Sozon Inc in 2005 as search marketing / agency holding.

Corporate & Affiliate Network

Founded in 2003 • Pioneer of SEO in Japan• Launched first SEO ranking tool for Japan

ese market (2004)• 35 Staff, Tokyo

Ownership• VC Investment since 2004• VC Majority shareholding in 2005

Service Evolution• Started SEO software provider• Evolved SEO Consulting services in

2004• Providing PPC services since 2005• Providing Full Service online

marketing agency services since 2006

• VC consolidated all Search / Interactive Agency services in Sozon (End 2006)

Search & Interactive Agency

Corporate Structure

Page 31: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 31

AnalyticsLog File Analysis / ReportingClick-stream AnalysisCampaign Conversion TrackingTechnology Integration

Site OptimizationSite ReviewNavigation & Usability DesignApplication DesignLanding Page Optimization

Online AdvertisingDigital Media Campaign PlanningMedia Planning / BuyingCreative Design & ExecutionMobile / Web 2.0 Promotions

Search Engine Optimization (SEO)Site Analysis & ConsultingWeb Tuning Guide Site Optimization Website Ranking & Reporting

Pay Per Click Advertising (PPC)Keyword Research / BuyingBid / Budget ManagementProgram OptimizationCopy Writing / Translation

Affiliate MarketingCampaign Planning & OptimizationAffiliate Program Management Detailed Reporting / Analysis

Integrated Digital Marketing Services

Page 32: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 32

Our Optimization Process

Page 33: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 33

Landing Pages

Campaign Pages

Web Analytics

Web Analytics

Pull Marketing

Push Marketing

RSS Marketing

Email Marketing

CGM Marketing

Blogs

SNS

Viral Marketing

Web Optimization

SEO

Usability

LPO

Your Digital SiteWeb / Mobile

External Efforts

Conversion ZoneMarketing Database

Managing the Digital Marketing Environment

PPC / SEM

Affiliate Marketing

Media Buying

Widgets / Apps

Page 34: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 34

Proprietary SEO Technologies

Search Ranking Software for monitoring both you and your competitors rank for keywords in Japanese search engines.

Advanced textual linking service to help increase site link popularity and improve rankings. Beta launch 2005.

Introduced in 2003 SeoSpy was Japan’s first online SEO commercial ranking software for optimizing site rankings.

• Sozon also utilizes best of breed, bid management tools. These assist us to manage more sophisticated campaign optimization, bidding and CPA tracking requirements for our PPC Clients.

PPC Bid Management Tools

Search Tools & Technology

Search Centre, bid management product localized for the Japanese market, leveraging Omniture’s analytics strength. Allows for integrated CPA tracking, sophisticated reporting & search campaign management

A Spider notification service. Tells you when search engine spiders visit your site and specific pages that you can designate.

• Sozon has developed its own proprietary software tools to assist with tracking, management , and optimization of client SEO programs. Some of our key tools are listed below.

Bid Buddy – leading European bid management platform designed for agency orientated search marketing. Allows for sophisticated campaign & keyword management, CPA tracking, and optimization of paid search campaigns.

Pay per conversation ‘blog marketing’ platform. Connects advertisers with bloggers who blog on a pay per posting basis

Page 35: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 35

• We are an approved global agency for Omniture, authorized to distribute their products and train customers on flagship products SiteCatalyst and SearchCenter as well as other products

• We also utilize a variety of other analytics solutions and have implemented these tools for a range of clients

Analytics Tools & Experience

Other Tools & Experience

• As an interactive agency, we utilize a variety of tools to help capture, manage and implement push marketing programs for our clients or optimize site and marketing campaign performance

Analytics Tools & Experience

eCRM Technology platform for capturing profile data, managing data, reporting and sending of email & mobile campaigns

Landing Page optimization tool and technology to improve conversion of site and landing pages

Page 36: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 36

Regional Network & Partnerships

Sozon is currently implementing search & online programs across more than 14 countries, with a primary focus on Japan. All work is centrally managed out of our Tokyo office from our multinational team, with the assistance of “in market” partnerships as need.

= Active Campaigns

Key Partners

Page 37: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 37

Some of our Clients

Some Key Customer Accounts under Management

Page 38: January, 2009 “Introducing Search in North Asia.”  Digital Marketing Specialists

CONFIDENTIAL | Copyright © 2009 Sozon Inc. 38

www.sozon.com

Digital Marketing Specialists