The news that WeChat users in China are spending more time on the app but are reluctant to engage with official brand accounts will come as no surprise to consumers in China, but may surprise marketers in the West.
WeChat is the largest and fastest growing social platform in China, and is a key digital communication tool with the potential to engage customers. However, only a small number of brands are able to monetise their accounts, with the latest figures suggesting only 10.4 percent of brand accounts are generating more than 10 percent of their sales revenue through WeChat, and only 15 percent of consumers have claimed to have made a purchase through the app.
WeChat has created an ecosystem which is multi-faceted, and therefore brand engagement is only one small piece of a bigger picture. It’s much more than a chat app to communicate with family and friends. It’s a platform built for consumers with functions to pay bills, hail taxis, check in for flights and more. WeChat’s parent company, Tencent, recently posted a 58 percent increase in Q1 profit for 2017. This higher than expected growth is driven by gaming and digital payments, with advertising only contributing to 13.9 percent. The app is a tool to attract and retain consumers, driving them to engage with other aspects of the Tencent offering.
With 900 million users, many spending over four hours a day on the app, there is still plenty of value to be had by brands advertising or building accounts. Forward3D is seeing more and more global brands that are keen to tap into the large and captive audience. However, a global approach, or replicating your Facebook strategy, won’t work. As with everything in China, you need to act local and play to the behaviour of the market.
The multi-functional nature of WeChat creates challenges for how users are exposed (or not) to brand messaging. In Western markets, companies tend to use social media to build their brand, push messages to all and then attempt to build dialogue with existing and potential customers. Social is a way to build an audience, and then encourage direct response. In China, WeChat is user-centric, helping brands build tools to categorise audience clusters to enable personalisation and one-to-one communication, rather than one-to-many. This is a shift from traditional social activity. WeChat requires both content and the conversation to be more personal.
Depending on the type of account you have on WeChat, your notifications may end up in a folder alongside all the other brand accounts a user follows. The difficulty for marketers is that users need to proactively enter this folder and decide to interact with a particular brand. The challenge is overcome through the quality of your content. If you can attract them once and present something interesting, they will come back. However get this wrong and this “follow” becomes irrelevant. The nature of a user actively selecting to read your content means brands are providing more long-form, editorial pieces rather than punchy bite-sized updates, another reason why a global approach to social won’t work.
The alternative is a service account, which allows only four messages per month. However it does allow additional features including ecommerce functionality. With only four notifications or messages per month it’s hard to engage followers and cut through the competition unless you have an exciting story to tell.
Growing biddable opportunities
While it’s difficult to engage with potential customers and grow brand awareness, the currently available and growing biddable functionalities allow for larger reach to target new customers and direct traffic to the brand account or the website. This offering from WeChat is still limited today, which means marketers must focus on building their story and growing their audience today. Having an effective audience pool will only help when bidding functionality scales.
It’s likely WeChat will take lessons from the likes of Facebook on targeting, audience profiling and bidding functionality. Global platforms don’t see WeChat as a threat given its focus in China. From a user perspective this is unfortunate, as WeChat provides so much value to customers and keeps them in-app for much longer, something that Facebook could learn from.
Expansion plans for WeChat reach into Europe and the US, both to attract advertisers and to push its payment offering, which may force Facebook to take more notice and see how it can shift focus from a number of users to the actual usage rates.
WeChat remains a key social player and an important channel to position brands. Marketers need to have the right expectations going in and understand that it's not advertising that drives Tencent forward but other services that put the customer first. Biddable will continue to develop, but it’s the ecosystem and the chance to engage customers which is the value for marketers. Get this right and the rewards can be great.
Richard Brosgill is APAC head of Forward3D, a global digital marketing agency.