China’s new sponsored-post model crushes counting “likes”

Traditional advertising is being outperformed these days. This stems from the fact that traditional marketing strategies, including counting “likes,” no longer resonate with most consumers, while younger consumers consider content marketing to be much more genuine, honest, and real.

According to the quantitative study Storytelling: The Current State of Branded Content, “consumers perceive branded content as being more consumer-centric because it is less about selling products and more about providing value to consumers.” Additionally, marketers prefer content marketing because it’s a lower-risk option that comes with a lower price tag and higher ROI. We only have to measure the resources invested in printing a magazine ad or shooting a TV promo against editing text on a digital post to understand some of the benefits of content marketing. And on top of that, content marketing just works better. Research shows that “people remember branded content twice as long as they remember a traditional advertisement.”

Needless to say, sponsored content is very popular in the West, but marketers in China have moved toward a new, innovative model that optimizes resources and takes advantage of performance management strategies. While the U.S. and Europe are still dependent on the original sponsored-post model and “vanity” metrics, China has moved light years ahead.

Why the sponsored post model is obsolete in China

Sponsored posts are going extinct because consumers have grown increasingly frustrated by posts where the blogger/influencer/idol acts as an advocate for the brand rather than the customer. This model creates an obscure situation in which consumers rely on the KOLs for genuine content, but instead of receiving trusted information, they get a bogus paid promotion.

But consumers aren’t the only ones who can fall victim to dishonest sponsorship practices. Brands can also get hurt. Eager to satisfy the KOL market’s demands, many micro-influencers fake their success and inflate their numbers so they appear more desirable to business partners. From ghost and fake followers to staged ads, influencers use several unethical practices to trick brands into partnerships. According to CBS News, “at least 15 percent of advertisers’ spending on influencer marketing is lost to fraud, costing them $1.3 billion annually,” adding that influencer marketing has become “increasingly perilous advertising terrain for corporate brands.”

Honesty, reliability, and truth get lost in this process, so it’s hardly surprising that brands have become skeptical about leaving their entire content-creation process in the hands of influencers. But China is one step ahead of the game and instead of the traditional sponsored-post monetization model, it now prefers a performance model that relies on analytics instead of vanity metrics. By using actionable metrics, Chinese marketers can better anticipate the success of a product in the hands of a selected influencer. Additionally, this model calculates conversion and bounce rates and gives a clearer indication of expected ROI. And even more importantly, this model relies on a commissionable compensation framework, meaning that the better the influencer performs, the higher his bonuses are.

But the new monetization model is doubly valuable to brands, as it also gives marketers information on audience demographics and behavioral data. “As the customer journey has ceased to follow a linear path to purchase, marketers have had to develop more sophisticated ways to predict which customers are likely to take a particular action,” says Lauryn Chamberlain, Content Manager at Yext. Chamberlain is right to say that marketers can no longer rely on traditional strategies and models, and they must demand more from their content partners.

Since engagement metrics are becoming less effective and impressive and the public is becoming more aware of marketing traps, brands need to abandon metrics that only look impressive in future digital marketing campaigns. “As far as the numbers go, vanity metrics look great on paper,” says Daniel Hochuli, LinkedIn’s Content Solutions Manager APAC & China. “But the sheen on these numbers fades when you try to use them to explain important business outcomes like ROI or customer lifetime value (CLTV); they become hollow digits that contribute little substance to proving your marketing is making money.”

According to Kimberly Whitler, assistant professor at the University of Virginia Darden School of Business, marketing campaigns in China “are faster, cheaper, and often more effective than traditional Western ones.” She also maintains that these marketing practices “may be better suited to today’s global marketplace,” and various sources promote the idea that China’s marketers are better equipped to succeed.

Considering how quickly the global marketing landscape is changing and “how China is upending Western marketing practices,” we soon expect that the vast majority of Western marketers will start moving towards the performance model while also getting the most out of their actionable metrics. This way, marketers can be assured that their businesses are optimizing resources as well as diversifying income streams.