The Impact of SEM on Corporate Brands—Illustrated by Big Data
It is a headache to help foreign companies do network marketing , and even more difficult if it is a Fortune 500 company. When I was to work with Germany-based SAP (the world’s leading ERP software provider) in July 2012, they couldn’t even satisfy the following simple requirements I used to for domestic companies:
1. In order to boost the opening speed of the website, I requested that the server of the official website be set up in China, but they refused out of commercial security concerns.
2. Then I took a step back and asked for a dedicated promotion website, but they said people will confuse it with their official website.
3. I requested separate contact information for different marketing channels to differentiate and evaluate the effect of each channel. But they argued that it would be confused with their official contact information.
Optimization and promotion of the site required frequent modification of the site content, but each of its modifications needed to go through a third-party company engaged in operation and maintenance of the website, and the modified content should be reviewed by its legal department in advance, the process of which took very long.
5. The mass postings of free information didn’t work as well. They were worried that it might damage the brand image, and the internal operation process would be very complex.
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Anyway, none of my previous marketing approaches suited them. I had to provide an appropriate network marketing plan for them. There were hundreds of distributors of SAP across the country, and the company would provide certain support in marketing to these distributors every year, involving marketing training, financing ads, holding offline activities, etc. So the more logical marketing plan was to support their domestic distributors to carry out network marketing campaigns.
In September, SAP provided the necessary training for distributors who were interested in network marketing campaigns. Then in October, it supported those intending to carry out the work with consultancy fees and advertising fees. On October 7, the three distributors launched ads in several major cities of China at the same time, the results better than expected.
Figure: The figure was provided by Baidu Index, a big data tool from Baidu Inc., where everyone could access at any time. It was true and valid. The figure shows the average weekly trend of the search volume of the three words "SAX”, “ERP”, and “ORACLE” on Baidu from 2011 to 2013. Among the three curves, blue stands for SAP, red stands for ORACLE, and green stands for ERP. Here SAP refers to the ERP system under the brand of SAP from SAP company, and ORACLE refers to the ERP system and supporting hardware devices under the brand of ORACLE from Oracle Corporation. As ORACLE provides not only the ERP system but also hardware devices, its search volume is normally higher than that of SAX. And the major marketing campaigns held by the two giants every year will lead to the fluctuations of the three curves. The dots marked in the figure indicate that in the following week after October 7, 2012, the search volume of SAP exceeded that of its competitor ORACLE for the first time. During that period, SAP didn’t carry out any offline marketing activities. What’s more, they even stopped all online marketing activities in order to evaluate the effect of network marketing more accurately. The only cause of this fluctuation was the Baidu ads made by the three distributors in Beijing, Shanghai, and Guangzhou.
It was also worth noting that the search volume of ERP during this period was quite low compared to the whole year as shown in the figure, which meant that the three dealers had successfully converted the limited ERP business resources into business needs for SAP through Baidu paid ads. In addition, in terms of the search volume, the total of 12,000 yuan the three agents spent on advertising for one week was far more effective than any major marketing campaign SAP had run in a full year (note: The annual SAP Sapphire is a well-known event in the ERP industry with huge influence, but its effectiveness online is not as good as the ads launched by these agents).
Seeing this, some might ask, “If SAP itself ran the 12,000 yuan of Baidu ads within one week, wouldn’t it get the same result?” First off, I want to inform you of a fact that the investment SAP had made in advertising was more than that figure both before and after this event. At least in the field of SEM, relying merely on a large company was impossible to achieve the same result.
Baidu forbade a company to have more than one advertising account so as to prevent it from hogging all of Baidu’s advertising resources. That is to say, a company’s ad could only be shown once in the search results of a certain keyword. For some highly competitive search terms such as “ERP system”, “ERP company” and “foreign trade software”, there might be dozens of ads shown on the first page of Baidu’s search results, and the probability of you being picked by customers was only one in a dozen (note: In 2015, Baidu finally allowed two pieces of ads from one company to be shown on Baidu’s homepage of search results). But the agents of the company were allowed to advertise the same product at the same time because they used different company names. Therefore, when searching for “foreign trade software”, we would find many advertisements for SAP products on the first result page.
The second reason was that it was impossible for a large company to take into account all keywords, especially those involving a specific field or region. But their agents at all levels are scattered all over the country, who mainly focus on the business in their own regions and their areas of expertise. They would use more specific keywords such as “Shanghai ERP company” and “ERP company in the chemical industry”. No matter in terms of the ad bidding or ad creative, the agents were more professional than the company, and customers tended to choose the local agencies to talk business. Like the Chinese saying, “A single spark can start a prairie fire,” the hundreds of agents in dozens of cities across the country would then generate mighty power. These agents would also make use of their official websites and post a large amount of free information to improve their natural listings (SEO) of keywords involving specific regions or fields. The point of doing so is that the websites of these agents will always be ranked at the top to attract new customers even during off-hours when no one is running advertisements.
Figure: this is the first result page of Baidu for the term “ERP company in chemical industry” on November 25, 2011. Of the twenty search results, more than half are paid ads placed by agents of SAP and natural listings of their websites.
Until today, I am still the network marketing consultant of these distributors. They now no longer need the support of the SAP head office, because they have taken the taste and are aware that through SEM they can get far more benefits than through other marketing campaigns. They are running business using the brand awareness of SAP, and meanwhile, they also enhance the influence of SAP brand by advertising the product.