A few days ago I was chatting with a tech guru in Beijing who believed the advertising long tail didn’t exist in China. This isn’t a new topic but I’ve given it a new thought recently.

A lot of people think that the long tail doesn’t exist in China because the online media landscape looks pretty much consolidated over there. Three years ago we were saying the top 5 Chinese Internet portals owned more than 70 to 80% of the total traffics. Which is still true as today these Internet portals still own the majority of the traffics. But when we are visioning the long tail, we shouldn’t see it like a X-Y kind of linear equation. It should be in parametric form. In order to resolve this equation, the solution is in the behavioral parameters.

Tech companies like Google which uses technology to monetize the long tail over the search engine. The search engine is essentially a network which interlinks a large fragments of websites. When a search is incurred which contextually represents an intent, Google helps advertisers to monetize it by displaying the relevant ad message. This is basically how search advertising works. In China, we follow the same rule.

But when it comes to display advertising, although we have quite a number of ad networks in China, most of them operate quite differently. These ad networks are more like a media rep and almost none of them carries remnant inventory. Why? Because the Chinese advertisers do not like unsold ad space. They all like the prominent ad space or to take over the whole home page. That’s how they interpret the money is worth spent. On the other hand, the cost of media is very high in China and the advertisers’ KPI is getting more and more demanding. The dilemma here is how possibly a two-yuan CPA can be achieved with the average CPM that is 25 yuan?

I believe in order to change the flavor of the Chinese advertisers we should introduce more ad techniques to the market. When the ad networks introduce better targeting options to help the advertisers engaging the audiences’ footprints across different publishers, when the agencies do better interpretation for the analytics other than the clickstream, we can present a new insight to our advertisers. The advertisers still need premium ad space to drive perception, but to generate sales leads and acquisitions in a long run, they should dive deep and monetize the long tail, which it does exist in China with different behavioral traits. If you are in the ad network business, I love to see you bring innovation into this space.

On a side note, I will speak for an ad network forum next week in Beijing. Stay tuned for my next post which I will write more about how the Chinese ad network professionals fancy for the long tail.

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