Tencent operates the WeChat, QQ and Qzone communication and social-networking applications as well as other businesses, such as games and online advertising. Tencent Social Ads, its advertising platform, is empowering many brands within finance, education, healthcare, public services and other sectors to increase their levels of engagement with users.
WeChat has experienced impressive growth rates, according to Davis Lin, vice-president and general manager of strategy development department at Tencent. He says that in the first quarter of 2016, the service achieved 762 million monthly active user accounts, representing 39 percent growth over the year.
In addition, Lin notes that among those hundreds of millions of users, around 90 percent are using WeChat every day, and more than half of them use the platform for more than an hour a day.
Lin believes this is not just down to the social platform’s messaging aspect, with WeChat increasingly being seen as a ‘connector’ between users, institutions, service providers and businesses. The high levels of interaction on the platform are going beyond communication on a peer-to-peer basis or between groups of friends.
The power of connection
Lin cites two examples of how Tencent Social Ads are increasingly giving advertisers and partners the power to form deeper connections with users. Tencent’s 9/9 Charity Day campaign brought together thousands of small NGOs and 600 million users onto Tencent’s mobile platform. It encouraged everyone involved to set up a micro fund to raise money for the charity of their choice through their social networks. In three days, the campaign raised Rmb127.9 million, nearly 30 percent of all online fundraising made in China in 2014.
For a campaign for Procter & Gamble’s skincare brand SK-II, Tencent worked with JD.com to integrate JD Ads marketing platform with Tencent Social Ads, with the aim of helping SK-II increase its brand reputation and acquire new customers. The project shared big data and leveraged social ads’ characteristics, such as their interactive nature and the ability to tailor creative messages to both existing and potential customers. Tencent and JD.com pooled their data resources — the latter’s transactional data identified existing customers while Tencent’s social data pinpointed those who had previously shown a preference for the SK-II brand and the fans of Taiwanese actor Wallace Huo Chien-hwa, SK-II’s brand ambassador.
“We always encourage brands to work with us in the creative stage to leverage the data and user base — we have to gain a better understanding of who their target audience is,” says Lin.
For both existing and potential customers, the various social scenarios and the tie up between WeChat Moments, a feature of the app where users can share photos, videos or simple status updates, and JD’s app, helped create seamless user experiences.
SK-II gained over 20,000 followers on its WeChat account in one day, with the brand tool helping the company target fans. The tool allowed SK-II to place an ad acted by Huo, SK-II’s brand ambassador, in customers’ WeChat Moments, or news feed. JD.com said the company’s sales that day increased nearly sixfold.
In addition to WeChat, Tencent also offers another two social platforms: QQ and QZone. The monthly figure for active accounts for these two is 877 million and 648 million respectively.
Using social ads across these platforms, Tencent says it is able to implement what it calls “human-centred” big data mining. In a nutshell, this means that brands can gain both an in-depth understanding of their audience from their location data and user behaviour, enabling them to deliver ads more accurately, as well as learn relevant user characteristics and behaviours within vertical industries. This, in turn, means brands can target specific demographics that are likely to want to purchase certain products. And by analysing existing users’ social relationships in more detail, Tencent Social Ads can also locate other like-minded prospects, potentially expanding the target audience.
A balancing act
So how does Tencent ensure that commercial opportunities are not compromising the end user experience? In Lin’s words, user-oriented culture is Tencent’s DNA, and as such, preserving this is a priority for the business.
“We do a few things to make sure we don’t hurt our user experience,” explains Lin. “We use our data capability to help advertisers select what could be the most precise targeting, thereby reducing unnecessary exposure and saving costs for advertisers.”
Target-CPA provides a new bidding and effect optimisation mode for advertisers.
Advertisers select a specific ad’s placement target, such as download activation, registration or adding items into the shopping cart and provide the average price they are willing to pay for the target.
Tencent Social Ads system will estimate the conversion value of every impression in real time via the conversion estimate model, automatically offering the bid and deducting fees according to the number of clicks. The conversion estimate model can also continue to be automatically optimised based on the ad conversion data, to continue to improve the efficiency and input-output ratio of ads.
He adds that this helps advertisers better pinpoint users as well as making information more relevant for the target audience, rather than bombarding them with ads.
Tencent also ensures the ads format is as native as possible to consumers’ feeds, appearing as a ‘conversational dialogue’ from the brand in question, with the aim again of ensuring that the user experience is disrupted as little as possible.
With digital media increasingly moving into the social sphere, Lin believes that social ads have become a must for almost all the advertisers in China.
He is seeing a blurring of lines between performance-based campaign goals and those for brand awareness, with a greater number of media formats linking with social ads.
Lin says his ambitions for Tencent Social Ads are simple: he wants it to be viewed as a medium for connecting users to business.
“We want to make that connection smoother and more efficient and bring efficiency to the advertising industry, which translates into improving targeting,” says Lin.
“We are going to continue pushing new formats, such as combining video display with ecommerce coupons together with location-precision capabilities.”
Lin imagines a scenario where a retailer can tell a story about their brand, give an electronic coupon to users and lead them to a store in their neighbourhood — what he sees as the perfect example of offline to online conversion.
“I’m excited about that format,” he says. “We want to make sure we give the best return on investment on both sides — for the brand advertisers and the users.”
Riviera rendezvous: Davis Lin shares his vision with Campaign’s Atifa Silk during Cannes Lions: