SMX China 2008 – Report From Nanjing

Last week, as the US financial powerhouses began to pay the price for their lack of fiscal responsibility, I was on the road in Seoul, Nanjing (for SMX China 2008), and Tokyo.

I had a great time! I haven’t felt such excitement, vigor, and potential in a long time. SEOmoz sponsored the water bottles. Chris Sherman took a shot of me showing it off before the keynote speech.

I was going to post a standard review of the conference with stats, etc. but Shor wrote an admirably thorough review of the state of search in China and Chris posted a solid review and his thoughts of SMX Nanjing. So today, I’ll focus on things I came away with from the conference and on the financial market activity, what it means to the Search industry, and how I see it being perceived and responded to by our colleagues in China and Japan.

The Business Climate in Nanjing, Sept 2008

I met about 300 people involved in search, software, and technology at the Nanjing Conference and Exhibition Center (Chris got a great shot of the complex the day before the crowds arrived). Attendees were privileged businesspeople involved in a growth industry with sufficient expendable capital to attend a 2-day conference. The mayor came to open the event and Microsoft sent Zhaohui Tang, Principal Group Program Manager, Microsoft AdCenter, to demonstrate their suite of marketing and ROI-improvement tools. We’re not talking about reactions from the ‘man on the street’, but I think there is value in what I heard and saw.

On the surface, China seems impervious to the maelstrom in the US. The Asia Financial Times, however, begs to differ. Articles indicate that China’s growth has slowed from more than 12% to an expected 9% this year. Nine percent! Washington would donate a few right arms for that kind of growth. And there is no doubt that China is already a major force in the global economy in many sectors. China’s drop in production is affecting the global price of commodities. Carlos Slim suggests, “China is now the most important country to help responsibly in this crisis. China has great liquidity, large resources, surpluses in its current accounts and a lot of capital flow.” That should give every American cause to think.

Some Observations from SMX China Nanjing 2008

Baidu is still the most popular search engine in China by a very large margin. Trying to use Google was, to put it lightly, frustrating, so I don’t see that equation changing anytime soon. However, this isn’t stopping Google or Microsoft from continuing their paid search promotion in the region.

Pay per click campaign management is still the major focus of concern for attendees. Making the financial case for SEO over SEM seems to be the biggest problem facing both in-house and independent SEOs. Pay per click provides a clear cost and ROI for business owners. SEO is more difficult to track. Not much different than the concerns of their counterparts around the world, is it?

Many indicated that they are involved exclusively or primarily with companies seeking to export their products to the US and other English-speaking countries. At the moment, pay per click campaigns on Google are the primary tool to promote products outside China. Alibaba, who swallowed Yahoo in 2005 in the China market, plays an important role in promoting export-active clients as well.

I was asked if SEOmoz would translate our tools’ interface to make them easier to use. Although some expressed interest in getting data and support for reaching other markets, they primarily requested US-centric data. With the meltdown in the US, I expected these people to be considering other markets than the US. But newspapers in China, Korea, and Japan are still describing the US market as the largest and strongest, despite the current woes. I didn’t speak to a single person who was worried about the medium or long term health of the US market.

Everyone expects a short term bumpy ride, but no one was considering holding back on their efforts to sell products to the US. As in the US, some people I spoke with were licking their chops at the low-cost buying opportunities. “Money is just moving around. Smart people just eat [buy] as much as they can while the others are being sick to their stomachs. It’s just time for the money to move around,” one attendee (whose name I sadly didn’t get) assured a group of us at lunch.

What the Market Activity Means to SEO

We are in for a recession. Not a depression, but definitely a recession. Smarter people than I argue about the length of time it will take, so I won’t ruminate about it. As companies tighten their belts, traditional media (print, radio, TV, even tele-sales) are already seeing a decline. Matt McDougal twittered about noticing that the economic slowdown is already pushing more advertising online. I’ll stick my neck out here – I predict that not only will this trend continue, but when things pick up, online advertising gains will continue to hold their ground and continue to increase. Furthermore, as SEM becomes more costly with more competitors for keywords, SEO will see a boon as well. I’ll revisit this prediction in the future to see whether I should get that Fortune Telling parlor set up.

Some basic business advice: when times are good, increase your market size as well as your market share. When times are tough, do it even faster. Stephen Noton has been consulting in China for some time; Stephan Spencer is opening an office in Beijing this month. And of course, SinoTech Group is growing. There are others. I’m encouraging you all to consider which markets outside your own cities, states, and countries will help you increase the size of your pie rather than continue to focus solely on getting a larger slice of your current market. In particular, I suggest you consider looking for companies outside your area that need experts to help them sell in your area. Be that expert and leverage it.

And now, Just for Fun… Seen and Heard at SMX China Nanjing 2008

On the first morning, crowds of attendees were delayed as our cars, buses, and taxis drove to the convention hall and again as we all passed through security screenings, had our bags x-rayed, and presented our badges for inspection. The mayor of Nanjing was on hand to welcome us to the conference, so security was high. That evening Inway Ni, co-producer of the conference, said, “The government wants to add more security tomorrow because we are expecting more people. They don’t know no one in China is going to do anything bad now. No one is interested in terrorism! We have found something with better ROI!”

• Inway Ni, on the same subject later: “We don’t have time even to argue with each other. We are too busy doing business!”
• Irene Wang, Alldao China: “Can you say something for the camera about the importance of our business?”

  “I don’t know your company.“

  “But we provide services for export companies to get their products to the US. It’s not about our company, just say something about the importance of the work we are doing!”

• TR Harrington: “Tell the man in the yellow shoes that the man in the yellow glasses said hi.”
• Unknown: “Look, SEOmoz and Google are on the same line and same size.” Well, there’s a moment to capture!

• Taxi Driver en route from the airport: “Nanjing is ancient! Nanjing is new! Look! [at the new 7-story shopping mall rising behind the city wall, circa 1038]”

Pictures of SMX China Nanjing 2008

Booth babes and giant spotted dogs were popular:

An amazing array of items are sold using cartoons. This cartoon is selling parental control software:

And finally, I’ve never been photographed so often by so many people in such a short time. Here I whipped out my camera and had a game of dueling cameras to the amusement of people nearby.