Tencent’s 2015 third quarter earnings report said that WeChat has 650 million monthly active users. Many companies in China use WeChat to promote their products and services, but they often hit a wall on how to grow their audience. Thomas Graziani, Co-Founder of a Beijing-based WeChat consulting and development agency WalktheChat, speaks to me to offer more advice on how to use this messaging and social media platform more effectively.
AllChinaTech: Why is WeChat marketing so difficult?
Graziani: When people think about WeChat marketing, they get extremely excited about it. Yes, 650 million monthly active users. 50 million of them open the app more than 10 times a day. It sounds like the perfect place to reach people. But it’s extremely challenging to get traction on this application. There are a few reasons behind this.
Although WeChat is popular, it’s very badly designed for companies. It was a clunky system implemented by WeChat after the fact, maybe without realizing the consequences of the system. It makes it really challenging for companies to bring sustainable engagement through WeChat, as opposed to Facebook or Twitter, which have advertising on the timeline, making it a bit more organic.
The second reason is that WeChat content is getting extremely competitive. A lot of accounts which have fake followers are copy-catting content. It’s getting more and more challenging for people to figure out what is true and what is fake.
The third reason is advertising. Advertising on WeChat really sucks. It’s very difficult to get traction. For most of our clients we actually have to use what we call key opinion leaders. These are bloggers who blog about our clients on WeChat accounts. Bloggers with existing followers and good traction. But if you use the embedded system within WeChat, the subscription account system doesn’t have the highest quality in terms of followers and the WeChat moments system is quite pricey.
These three factors make it really difficult to grow a following on WeChat. When you look at your WeChat marketing strategy, it means that you have to look beyond WeChat. It’s not just about WeChat – it depends on the business you are running.
WeChat is kind of like the end goal. At the end of the day, WeChat is where people spend their day. But sometimes it takes other roads to get WeChat followers. You might do videos on Youku, or use Zhihu, which is like Quora in China, you might choose other platforms which are less competitive to gain followers. That will enable you to gain traction and convert the following to WeChat.
Be aware that WeChat is competitive. Be realistic about your WeChat growth expectations. Marketing doesn’t always just happen on WeChat. WeChat marketing is not just about WeChat. It happens offline, it happens on other platforms, like videos, Q&A forums, and so forth.
AllChinaTech: What are iBeacons and should companies still get on them?
Graziani: iBeacons are really simple devices. They are bluetooth signal emitters. It’s a stupid device but it’s really useful. Because if you manage people through bluetooth discovery of the exact location of users, that’s extremely powerful. The way you get on iBeacons is definitely not through WeChat because it’s not perfect. It’s really difficult for people to download an app right away. If you think iBeacon is key to your business, use a WeChat app as a conversion channel. Direct your WeChat followers to download your native app. Use an H5 app, which runs some of the features that you want to provide for your customers, but not the iBeacon features. If they want to have more advanced features including iBeacons, then they will have to download a native app. It’s difficult in China for people to download a native app right away. But if you use a WeChat app as a proxy in between, then it might be easier.
HTML 5, besides being a buzzword, is also a very interesting piece of technology. It enables you to develop applications based on web technologies that can be used on iOS and Android, and look like native apps. That means you can develop one application with the same code base to run on iOS and Android. Then you’ll have one application that uses the iBeacon feature on the native app. You can still use the WeChat application to convert your followers first to WeChat, and then to native apps. This ecosystem can be affordable to develop. It enables you to use the iBeacon features on the native app, as it should be used properly, and not to make an awkward iBeacon feature on WeChat. That doesn’t make any sense, so don’t do that.
AllChinaTech: What are the WeChat marketing trends in 2016 and beyond?
Graziani: I think 2016 signals the revolution of advertising on WeChat. Tencent right now is facing pressure to increase revenue from advertising. If you look at ad revenue from Tencent, I think last time I checked it was around 17%. It’s 95% for Facebook. People look at this difference, especially investors. It’s time for Tencent to make money out of WeChat advertising. As we discussed, it hasn’t been doing so great on this.
Subscription account schemes have not been a success. Tencent has been really careful about WeChat Moments ads. WeChat Moments ads started with RMB five million (USD 769,698), then it went down to RMB 200,000, and then it went down again to RMB 50,000. A few months ago, they released a self-service platform, which the companies are already using to order ads directly from this platform and manage it to see ROI. It’s like a predecessor to moments ads available to everybody, except they are very worried that they’ll mess it up the second time. They are very careful about it. They’ll start with a few companies then a few hundreds, and open it up little by little.
Secondly, it will be opening up Moments ads for everybody. It’s better to target Moments ads because targeting ads in general on WeChat also sucks. If you compare it to Facebook ads, in terms of being targeted to a specific segment of population and get ROI directly from that, some companies’ entire businesses rely on a Facebook page. It’s something you can do in the West. You can do that on WeChat too but not by relying on ads. There are a lot of WeChat accounts with a lot of money. Paid advertising is not a significant part of the model. If the targeting gets better and the reach gets wider, it will become a major thing for Tencent.
Another trend is virtual reality, a big buzzword this year. With headsets from Oculus and HTC going on sale now, Tencent has of course seen what happened to companies in the past in China, like Weibo and Renren, which didn’t adapt to new trends. They are extremely scared of missing the next trend. Wearables seem like they are rising – there’s tons of development of OS for watches, but this trend doesn’t seem to be taking off. The attention is on VR now. For example, WeChat can integrate 360-degree videos. VR will definitely be one of the core developments this year. Because if companies don’t adapt to VR, they may face extinction in five years. AR and VR are definitely going to be the next trends.
There are a few other things that are quite essential for Tencent. One of them is international expansion. Tencent is doing great in China, but doing poorly outside of China. If you look at countries outside of China with some level of Chinese-speaking population such as Malaysia, Hong Kong and Singapore, we can see some kind of presence and growth, but it’s not explosive. If you look outside of these countries, Tencent does not have any presence.
If you look at the curve of keyword searches for WeChat on Google, it spikes when they had a strong marketing campaign, and then it just drops. If you look at Google trends for WhatsApp and WeChat in countries with significant Chinese speaking populations, you can see that WeChat is doing extremely poorly. Whether Tencent will be able to reverse the trend is also a key factor for its ability to grow.
Right now, Tencent already have saturated the market in terms of number of users. They are now trying to grow vertically. They are getting into payment, finance and all these kinds of industries. They also need to show some growth in terms of user numbers. They can only do that if they expand outside of China. It’s been a failure so far – that’s why they keep on trying. It’s going to be a challenge for Tencent in 2016. I’m not super optimistic that Tencent can pull this off.
AllChinaTech: How do you keep up with WeChat marketing knowledge?
Graziani: There is a WeChat public account in Chinese called “Weixin Gongkaike”. If you can’t read Chinese, you should follow China Channel and WalktheChat, they are both in English. Otherwise, you can play around with the WeChat API if there is a bit of a techie in you. You can see what can be done in WeChat because the platform is not just about pushing messages. It’s really an ecosystem since people are developing fully functioning applications. They are based on websites but integrate many functions from WeChat, like log-in, payment, and social features. You don’t have to be an expert in programming. But if you have time to build, you can build a simple application with automatic features like replies and authentication. It’s really worth your time. It might take a couple of days to get familiar with it, but you will get a really good understanding of what WeChat can do, its ecosystem and how it works. It won’t be fuzzy to you anymore.
You can find out why China is different from the West when it comes to the ecosystem, and why WeChat is a great ecosystem and not just an application to push content to users. It’s not my main job to code but I do spend a lot of time learning about programming on WeChat and understanding what’s happening. I think it’s very important. When you see campaigns that are successful, you will have a completely different outlook. You can begin to understand how it works from a graphics point of view and from a technical point of view. You will be able to do in-depth analysis on it, because you won’t be looking at it as a beautiful picture, but see how it is a social engineer of an application with automatic campaigns that turn viral. That’s much more interesting.
There’s been a rise in WeChat events and many companies come in and promote their products. WalktheChat and China Channel are organizing a conference on April 24 because we want people to learn about WeChat in a practical way. Five speakers will talk about how to use WeChat and we will have workshops on the side. If you are using WeChat for promotion, you might be interested in joining us.
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