With millions of viewers, billions spent on advertising and grand carnivals, the Chinese Lunar New Year Gala or Spring Festival Gala usually held in late January or early February, bares the closest resemblance to the Super Bowl in China. This year, Alibaba’s Alipay — China’s biggest mobile payment app — announced an exclusive partnership with the gala last Friday.
It’s rumored that the partnership cost Alipay a whopping RMB 269 million (USD 42 million). Alipay isn’t alone competing for the huge advertising opportunity during the gala. During the last gala, exclusive partnership rights were occupied by Alipay’s most significant rival WeChat Payment.
Why are leading tech companies competing to appear during the traditional Chinese festival celebration? AllChinaTech investigates the issue here presenting you another side to the Spring Festival Gala.
Who else is keen on the Spring Festival Gala?
Apart from Alipay, Chinese smartphone manufacturers Xiaomi, LeTV and Meizu have also been confirmed to appear during the Spring Festival Gala this year. It’s reported that Xiaomi has bid for the 10th best ad spot with RMB 22.38 million (USD 3.5 million) while LeTV has reserved RMB 71.99 million (USD 11.2 million) for the fourth most expensive spot.
Meizu, another Chinese smartphone manufacturer, bought the 2nd most expensive ad spot during the Spring Festival Gala after a public provocation on Weibo last week with LeTV. The exact expense for the commercial hasn’t been released but considering the price LeTV spent, it should be over USD 12 million at least.
Back in early 2015, apart from WeChat and Xiaomi, other Chinese tech companies that appeared during the gala included VIPShop, Didi Dache, Kuaidi Dache and Ganji. The year before, tech giants Tencent, Alibaba, Baidu and JD.com all were present during the gala.
“Who bids on advertising, who doesn’t, why they do it and how much they pay, are all not simply an issue of advertising per se, but more an issue of competition in the industry for the next year,” an analyst commenting on Chinese Business News was quoting as saying about this phenomenon in 2014.
After two years, the comment still elucidates how to explain the shocking amount of investment into advertising that goes into the gala every year.
A viewership that’s too significant to neglect
Why do tech companies — even Xiaomi, which is famous for online marketing — like to spend such great amounts on traditional television ads?
The most self-evident answer is that the viewership is just too big to neglect. In 2015, 903 million people watched the show within a week of the event, with 690 million people watching it live, according to China Central Television statistics. About half the Chinese population were sitting in front of the television, watching the gala on Lunar New Year Eve.
According to CNN, peak viewership during the Super Bowl XLIX in 2015 was about 120.8 million. The Spring Festival Gala had five times as many viewers as the Super Bowl. No advertiser can say no to such great publicity.
Apart from the tremendous viewership, another important factor is the demographic diversity of viewers during the Spring Festival Gala. Spring Festival is a family reunion time for Chinese people, therefore it is a non-biased family show. It’s a chance for tech companies to reach the less tech-savvy slow technology adopters and a perfect opportunity to educate the market.
An add-up to the scenario is that typically older, slower tech adopters are surrounded by the youngsters of the family, who can teach them face-to-face the new tools. The lowering of the tech barrier to conversion for users in such an economic way, is like a dream for tech companies in China.
“Chinese tech companies like Alibaba, Xiaomi and Tencent have always incorporated their own promotions into the Spring Festival. Launching an advertisement during the Spring Festival to gain more publicity will undoubtedly save them half the effort but achieve a double impact, ” Liu Xingliang, a Chinese tech blogger and commentator said.
Does it really work out? Review the case of WeChat
The idea sounds great but does it really work out the way they want it to? The case of WeChat Payment in 2015 proves it does. During the Spring Festival Gala of 2015, WeChat spent only RMB 53 million (USD 8.2 million) to become the sole partner for the interactive section of the Spring Festival Gala. It launched an interactive game during the show: audiences could shake their phones to win cash rewards of a random amount on WeChat.
The game was played 11 billion times within five hours after launch, with a total amount of RMB one billion (USD 156 million) distributed in the span of a single day. The number of red envelopes delivered through WeChat was boosted 200 times to 1.01 billion compared with data from the previous year.
The cash given out was sponsored by brands via their Public Accounts on WeChat. When audiences accepted cash rewards from brands, they were directed to follow branded Public Accounts. Koudai.com, a mobile e-commerce portal, attracted 20 million followers with RMB 100 million (USD 15.6 million).
For Chinese tech companies which spend billions of dollars on gaining new users every year, it is a fair deal. In comparison, a similar red envelope game launched by Alipay was only played 683 million times on the first day of Lunar New Year. It might explain why Alipay is willing to spend USD 42 million to gain an exclusive partnership for 2016.
WeChat Payment boosted its number of users during the Spring Festival of 2015. Alipay launched a social function this year, attempting to challenge WeChat’s dominance in the Chinese social networking sector. It seems that Alipay intends to boost its social functions in an attempt to copy WeChat’s success during the Spring Festival Gala this year.
Do you think Alipay stands a chance? We’ll reveal the answer when Spring Festival arrives.