Exclusive survey: Brands want more from KOLs in China

The use of KOLs does not get addressed adequately because companies generally do not want to admit to, much less share, information about how they use paid influencers in support of brand growth.

In order to better understand how brands and agencies are using KOLs in China, Totem Media distributed a survey through its own network and through Campaign Asia-Pacific during May and June.

The survey received a total of 36 responses from people holding director-level or higher positions in multinational brands and agencies in China. One-third of these respondents provided written responses to five open-ended questions in the survey. Below, in words and a sharable infographic, is Totem Media's analysis of the results.

Background

The usage of KOLs in China is shrouded in mystery and misinformation, with very few benchmarks yet established on how to use them. In a market like China, where relatively few good quality channels exist for advertising, KOLs and their communities of followers/fans provide access to targeted audience groups.

While content quality and audience incentives are critical for success, without the support of KOLs it is very difficult to build reach and awareness in China. KOLs provide important access to audiences in close proximity to the brand and in circles the brand has yet to penetrate.

Additionally, the WOM effect is even more important to the Chinese market, with its history of product safety and health concerns. Consumers are looking to hear from real people and personalities they trust rather than trusting advertisements.

Overall routines

Most brands and agencies use KOLs as part of their regular marketing routines on social media. More than half of respondents use KOLs at least once per month in campaigns or promotions that usually last one to two weeks.

While some brands claim to use unpaid KOLs, in practice, KOLs all receive some form of payment-in-kind (free products, experiences, discounts, etc) and are paid in cash to spread/seed branded messages.

Brands typically outsource the work of managing KOLs to agencies or KOL specialist firms. Agencies evaluate KOLs for quality and effectiveness to achieve a combination of less waste, better reach, and quality messaging.

The most common concern of marketers working with KOLs is ensuring value in the exchange and in making sure that the KOLs are not already over-exposed. For bigger KOLs (those with larger followings), the perception is that they are becoming too costly.

Judging success

There is no standard when evaluating the use of KOLs. There are two main reasons for
this:

(1) KOLs are used to support a wide variety of efforts, across multiple media platforms and industries, with a multitude of expected outcomes (awareness versus engagement versus sales). Almost all survey respondents have enjoyed some successes with KOLs but the variety of cases provided demonstrate how varied the uses of KOLs can be.

(2) There are very few tools of research on KOLs in China to provide benchmarking. There were an overwhelming number of respondents calling for programmatic (automated) solutions for the evaluation or management of KOLs, but the restrictive environments of both WeChat and Weibo would make this difficult.

Budget for KOLs

The most common budget per post is less than RMB1,000 for what could be described as "small KOLs" (accounts with under 100,000 followers). "Medium KOLs" (with follower counts under 1 million) appear to be valued at around RMB5,000 to RMB8,000 per post. "Large KOLs" (with between 1 and 5 million followers) are priced above RMB20,000 per post.

Choice of media

WeChat is the key channel when using KOLs, followed closely by Weibo and a growing number of social platforms including Youku/Tudou, Zhihu, Douban, Meipai, Nice, Papa and Weishi.

It is projected that WeChat will continue its lead over the pack of other sites, as it’s the most important mass-social channel in China. While Weibo is still the second most important channel, most respondents predict Youku/Tudou will take over from Weibo in the future.

Despite its decline, Weibo has the best system for managing KOL efforts, as it provides the best data on the effects of social activities. WeChat isn’t yet effective at providing data, so it's not possible to measure the full effects of campaigns.

Youku/Tudou does not have native functions to support KOL seeding, but if it can improve those
functions, it should see strong growth.

Looking forward

There is a sense from all respondents that KOLs are important, but that using them requires an increasingly difficult and sometimes risky process of vetting quality, managing logistics and ensuring objectives are met. Without standardised benchmarks, individual companies are operating in isolation. Respondents all want to see processes developed and measures
established, with many of them calling for a systematic approach to using KOLs.

It’s clear that brands want to continue using KOLs, but want the KOLs they work with to better appreciate the brand, provide more value as advocates and inspire engagement. They want KOLs to demonstrate better product knowledge and voice their own opinions. In fact, come September, the Chinese government is going to implement a new advertising rule affecting KOLs that requires them to disclose any posts which are promotional.

When selecting KOLs, agencies and brands are also careful to evaluate KOLs based on a combination of follower count and follower quality. There is a firm move to seeking more quality (over pure number of fans/followers) as priority. In short, they want the KOL process be more authentic and less transactional.