Last word from the East: WeChat’s Advertising Gamble

Article was written by Ed Bell, CEO of Greater China, and originally appeared in WARC.

This month, Tencent’s WeChat, China’s leading social media platform, took its first real steps into the world of paid advertising.

So, is it the beginning of the next age of advertising or just another clumsy grope for the advertiser’s wallet?
With 438 million active users, checking their WeChat status every several minutes, WeChat is a force of modern social communication. It has overtaken Weibo, the hitherto leading name of social media, by being driven by personal networks and conversation rather than ‘posts’ to all. And unlike Weibo, which is now considered ‘too commercial’, WeChat has entered the world of advertising with wise caution.

Tencent’s first post to WeChat Moments (similar to Facebook Feed but the posts only go to your friends and are nonsearchable) was a kind of teaser: six poetic verses that read as a jibe at consumers. The following day, three ‘campaigns’ were launched on WeChat Moments. One from BMW, another from China smartphone brand Vivo, and the third from Coca-Cola; and with this tiering, the controversy began.

Those who received the BMW ad were deemed the wealthy group. Those who received the smartphone, the ‘middle class’, and Coke was sent to the ‘upper lower’ group, important enough to receive an ad but not so important as to get either a smartphone or a car ad. So, while we scrutinise WeChat’s foray into advertising, we are also interrogating the social accuracy of some other modern-day marketing buzzwords such as Big Data, wondering if it might just be good old messy data.

In China, as is often the case, the magic wand too easily becomes the rod. Since WeChat’s first advertising toe entered the water, China’s Netizens have been abuzz. Speculation is rife about the negative user experience it may bring and the risk of turning people off with ‘hard selling’.

To help prevent this, the WeChat team is going to never-seen-before measures to protect the user experience and not fall victim to the overt commercialism that precipitated Weibo’s fall from grace. For the time being, there is an RMB10 million floor limit to play, which places it at the same price per million as TV and ‘should’ deter the less creatively sensitive advertisers.

Second, advertisers’ creative content cannot be overtly sales driven and has to be vetted in an obscure creative process run by Tencent founder Pony Ma and Zhang Xiaolong, the father of WeChat – a process that has so far deterred several brands from going further.

Despite the concern about over-commercialising WeChat, there are a few reasons to believe that the reverse may be the case. First, WeChat operates in a mobile-first, mobile-only environment. Users are more willing to browse branded content around fragmented commuter experiences. Second, brands can link to micro HTML5 sites smoothly while users believe they are still within the WeChat environment. Many brands, such as Uniqlo and Burberry, are already highly skilled at creating ‘gamified’ mini-sites, making seasonal collections and promotions very sticky. Yet, WeChat is sure to understand that brand experiences are only positive so long as they are perceived as infrequent, simple and enjoyable. It may also provide an opportunity for WeChat and the brands to further understand users’ behaviour and interest. In the upper right corner of each ad there is a ‘not interested’ button to choose, and users can also ‘like’ and ‘comment’ on the ad. It could be seen as the direct feedback from the consumers towards the message and the brand, and by doing that, it creates direct interaction and conversation.

Clearly Tencent has quite a bit riding on this experiment. WeChat is its number one brand, the jewel of the portfolio which is focused on gaming. Unlike Facebook, WeChat only earns about 10% from advertising and it is a new game for it. And organisationally, it has not yet got its ‘head around’ it. For example, while the core WeChat tech teams are based in Guangzhou, the media teams – the interface to advertisers – are not. Nevertheless, the significance of WeChat’s move remains. When China’s most-loved social platform decided to start working with personal data to deliver creatively approved ‘ads’, we knew that we were witnessing an experiment that may well be the foundation of the future of the advertising industry.