Top advertisers’ KOL spend in China up tenfold since 2020: Ebiquity

Ebiquity's new study indicates that leading brands in China steered more KOL advertising to Douyin and Red but less on WeChat and Weibo.

Leveraging its extensive China KOL data pool, Ebiquity says China's top advertisers spend between 20% and 30% of their total paid advertising budget on key opinion leaders (KOLs).

The research, shared during a World Federation of Advertisers (WFA) webinar, reveals that, in comparison with durable and premium categories, beauty, skincare, mother care, CPG and clothing categories invested more on KOLs.

Stewart Li, Ebiquity China's managing director, explained that KOL impact on advertisers had grown significantly in the past few years, with top brands increasing their KOL spending tenfold since 2020.

Li added that Douyin shares around 40% of the total China KOL investment from general advertisers, while top advertisers accounted for 64% of the total spend on Douyin. He notes that top advertisers had allocated higher investment to Douyin due to its excellent seeding and sales conversion capacity, and data from Ebiquity shows the share of total spending from top advertisers on Douyin had almost doubled between 2021 and 2022.  

Red is becoming a rising platform receiving more spending from top advertisers

Another social media platform that Ebiquity's data noticed is Red (Xiaohongshu), with its major advertiser expenditure share increasing from 15% to 18% in 2022. The app’s performance in categories such as beauty, mother care, food, hotel, and travel is especially positive, Li says.

However, during the same period, Ebiquity research reveals KOLs' importance for building brand awareness decreases. This coincides with a major decline in the share of spending on WeChat and Weibo in 2022, from 42% to 12% respectively. 

In terms of media costs, Ebiquity China found that Douyin's top tier KOL media costs significantly grew by 36% from 2021 to 2022, while long-tail KOL and key opinion consumer (KOC) media costs decreased by 28% and 72%, respectively. The study attributed the results to higher ROI and better conversions from top-tier KOLs.

For Red, it shows an opposite trend, as it is a preferred option for seeding, the research observed a rise in media costs for long-tail KOLs and KOCs, while Top Tier and Tier 2 expenditures decreased.

Source: EBQ China Real KOL Buy Data Pool (different platforms have different definitions of no of fans for different tier)

Li indicated that “advertisers have become more pragmatic when selecting key opinion leaders for their campaigns, prioritising achieving the lowest cost per sale (CPS), cost per lead (CPL) or cost per engagement (CPE) over engaging with costly high-tier KOLs like they had in the past which could be very costly." 

Other new trends observed by Ebiquity about KOL marketing in China include:

  • Lots of big-scale local KOL agencies have evolved as integrated social agencies with through-the-line capability. KOL agencies are able to drive brand awareness and drive consumers to purchase through a few posts.

  • KOL platforms have upgraded their selection and buying analytic systems. Several platforms have introduced SaaS tools, such as Douyin's Yuntu and Qianchuan. Red launched its Dandelion platform (蒲公英平台), while Kuaishou unveiled Magnetic Star (磁力聚星).

Ebiquity’s KOL data pool in China has more than 250,000 KOLs on more than 10 social platforms across 24 categories.

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