In the western world it is commonly acknowledged that traditional advertisement should only be used to increase brand dependency. No well-known successful internet startup ever started by putting ads on TV networks or billboards; reason – it’s too expensive. Even now, Google (GOOG) refuses to advertise while its “friend” Yahoo is constantly running new television campaigns. Of course, it doesn’t prevent them from spending millions on the future YouTubes of the world (YoQoo is a Chinese version) – but hey, engineers at YouTube have to eat too.

In China, however, traditional advertisement is cheap – web ads are not! So, what do companies do? They use walls, billboards, subways, and in some rare cases – FocusMedia itself. Now of course all this might be cheap (with an exception of focusmedia), but is this way successful? Well, it appears to be not so much. eBay, the biggest subway advertiser in Beijing, is continuously losing its market share to taobao.com and alibaba. 51Jobs, also the favorite metro job advertiser, is no where close to zhaopin.com and chinahr.com. The question then is, how do companies get on top of the market if advertisements are either “cheap” and useless or expensive and probably very close to useless. More on that later..

Update:

This is completely unrelated, but I just read this article, thought it to be interesting:  AL GORE, `VALLEY GUY’

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