Hey everyone. Welcome back. Today we’re going to continue our How to Market on Wechat Guide for Foreign Business Owners. In the previous 2 videos, we talked about the basics of WeChat.
We talked about the mindset of marketing on Wechat and we also talked about official accounts and how you can acquire official accounts and the importance of having an official account to market on Wechat.
In this video, we’re going to cover how to do paid advertisement on WeChat but before we get started, I just want to cover something. Wechat has a native pay advertisement platform that you can use.
There are actually 3 different ways you can advertise on Wechat, which I’m going to talk about a little bit later. But WeChat’s advertisement is actually not as robust as, Facebook or Google or even some of the other paid advertising platforms in the West.
Part of the reason is that WeChat or Tencent really had a hard time trying to monetize Wechat. So, I don’t think Tencent had any idea how to monetize Wechat. They tried many different things and were not very successful in terms of monetization. So, for a long time I believe, Wechat didn’t make any money for Tencent.
So, unlike Facebook which for the first 5 years didn’t make any money at all either, however I believe that it was intentionally done and they knew at some point they can monetize their traffic and they can monetize the attention that was on Facebook.
With WeChat, it was more of a problem of how do we do it? How do we monetize because it’s kind of hard, right? So, part of the reason, like I said in the first video, is that the way Wechat works is quite different.
Ultimately, Wechat is still an instant messaging app. So, if we look at all the instant messaging apps that are out there, at least all the popular ones being Whats App and there is Line and there is Wechat – all of them traditionally had a really hard time monetizing their traffic, right?
So, none of them really had any way of monetizing their user’s attention even though they had a lot. So, the problem is, unlike Facebook and other platforms like Instagram even with the newer Snapchat, people are looking for content. Content is created by their friends, their aggregated or news in the newsfeed. With instant messengers, people are there chatting.
You can’t really advertise in other people’s chat. Nobody will use your chat if that happens and you can’t really charge people to use the app because they will just go back to SMS. Because there’s not that much of a leap forward or difference in terms of technology worth paying for it.
Well of course, these are just my opinions but WeChat had some specialty apart from Whatsapp where it’s just purely an instant messenger. Luckily, Wechat has moments. So, Wechat is a combination of instant messenger plus there’s a social element to it and this is kind of where Tenson was leaning towards and gearing towards monetizing it however, originally, they were not very successful with it.
So, anyways, let’s talk about 3 different ways you can actually advertise on Wechat. 2 of them are native to Wechat. What I mean by that is that you actually pay Tencent and you use their platform, they get a cut.
You pay them and they pay their advertisers. It’s kind of like Adwords and Facebook. The other one is more of a sideway of advertising on Wechat but in our opinion, it’s one of the better ways of doing it. The first way you can actually advertise on Wechat is actually moment advertisement.
This is actually relatively new. This was not the first thing that Tencent had in terms of advertising. So, the way it works is kind of simple.
So, if you remember, in the first video we talked about moments, right? Moments are like newsfeeds on Facebook. They’re articles or updates of your friends that people share and you can look at them as a user on WeChat and that’s what people do a lot. So, moments ads are kind of like ads that go in between, you know, other moments that are shared by your friends.
The way it works is in order for you have a moment ad, you need to be either a Chinese registered company or you have to be a Wholly Foreign Owned Enterprise, so the WFOE.
Now, what that means is if you’re a large enterprise and you go to the Chinese government and you say, “Well, we want to do business in China. We want to register our company in China.” Then you are considered to be an entity of China business but you’re Wholly Foreign Owned, right? So, that’s why it’s called, “Wholly Foreign Owned Enterprises.”
Now, the third requirement for this is you actually need about 500 000 RMB, which is equivalent of 20 000 USD, every month to be able to even get into moments advertisement. So, it’s not very cheap for sure.
So the way moments ads works is there are actually just like moments except they’re an ad so you get everything that a standard moment will get. You get a profile image on that little icon there and you get a name. Typically, this will be a brand name. Typically, it would be the logo for the profile image and then you get a little bit of a description that will tell the user what the ad is about.
One thing that you do not get on a standard moment is you don’t get an ability to link out to a Tencent page. So the third little thread here that you see is actually going to be a link that you can link up to a webpage that’s hosted by Tencent.
So you still cannot link out to your own website unfortunately. Again, this is the controlling nature of Tencent but at the very least, you get to link it out to a webpage and have a little bit more engagement with your user or get them to take an action, have a call to action there. Last but not least, you get your standard 6 pictures that any moments get.
I’m going to scroll back a little bit; I’m going to show you what some of the companies do. So here is a picture of BMW in China and here is a picture of Coca cola. These are not by us. These are on WeChat’s official account.
The way that they use these 6 pictures is that they will take a large picture and then they will cut them up evenly and then display that very large picture by puzzling back the 6 pictures. Alternatively, some other companies that we have seen is they have also used story driven ads where each pictures tells a little bit more about the story.
Or you could do a product display ad where if you’re selling a car you can do one angle of each part of your car and you have 6 different pictures.
So it’s really up to you, there is no right way or wrong way to do that. There is really a testing process to see which ad is better however it also depends on what kind of results you want to get and the purpose of your ad.
So, other than that, there are some really weird things about moment’s ads that you should know about. So first of all, moments ads do not show up on users that have less than 500 users, I believe.
The user has to have a lot of friends in order for these ads to even show up. Second of all, even if you have a lot of friends, you must have 4 updates before the ads actually show up on the 5th slot.
So what it means is, let’s say 4 of your friends put up 4 moment updates and you haven’t checked it for a while. Now you have 4 little notifications telling you that you have 4 updates that you’ve got to check. In that case, an ad may or may not appear on the 4th or the 5th moments for you.
The other little weird thing is once these are being displayed on the user and the user sees it, they won’t see the ad again for another 48 hours.
Finally, and the last little weird thing is, if the user doesn’t like, comment or interact with the ad, the ad will be automatically removed from that user’s moments and they won’t see that ad anymore.
The reason all these are in place, again, Wechat is trying to preserve their user experience. Now, of course they want to monetize but they realize that if the user experience sucks, nobody is going to go back to use Wechat.
You may say, “Well, WeChat has a monopoly in China.” Which is kind of true and, “They dominate the social media aspects, what competition do they really have?” Yes, it’s true and there is virtually no company that will come close in terms of social media with WeChat but that doesn’t mean they can do whatever they want, right?
If they piss off the user and everyone stops using Wechat, they don’t have any platform. So they still want to keep a good user experience for their users. They still want to grow and they want people to use Wechat.
So the last thing I want to cover is the targeting. Unfortunately, targeting currently is very basic on moments ads. So, you can do it by age, by location or by interest and then you can do it by gender, devices and phone networks.
So it’s not as robust as Facebook and maybe even Adwords but it is not so bad. The cost is kind of expensive and it is paid by impression. It’s not paid by clicks, it’s paid by impressions. You do need a minimum of 50,000 RMB to start. Now, the ads generally cost the same per 1000 impressions.
The only difference is if you were to specify which location you want to advertise in. so, if you don’t specify any location, it’s about $40/RMB for 1000 impressions but if you want to target, say, Shanghai and Beijing, which is the 2 major cities, it’s about $140/RMB per 1000 impressions where if you want to target first and second tiers, it’s about $90/RMB for 1000 impressions.
So to kind of translate that, $40/RMB is roughly about $9 US, around there. So that’s actually quite expensive if you really think about that.
Facebook charges way less for 1000 impressions but of course, with Facebook, it depends on your market and who you’re targeting as well. But $140 which is roughly about $30 US for 1000 impressions, it is quite expensive.
Again, like I said, all the attention is on Wechat and moments is where they look so maybe this is worth it for some companies. So how do you apply for moment advertising?
A couple of years ago, it would only be available for Chinese locals and it only works in China. It was not available for foreign companies. I believe it was last year or very recently that it has changed.
So, in order for you to apply as a foreign business, you have to go through a special Tencent process. The link is provided right there at wesheng.qq.com or if you have trouble you could always contact us. We’ll be happy to help you out.
You could email us anytime you want. The second type of WeChat advertising is the banner advertising. So, this one is actually the oldest type of WeChat advertisement. So, the way these WeChat banner ads works is they appear on official accounts articles on the bottom of these articles.
These banners can link out to a Tencent hosted webpage, kind of like the moments ads. Now, traditionally these ads were very terrible. They were actually very cheap as well. The reason they were so cheap is they offered no targeting and they kind of show up on any kind of official account.
You cannot choose which account you want it to show up on. So it’s not like Google Display where you can say, “I want it on this site, this site and this site to kind of increase my conversion.”
They will just show up on any kind of official accounts. That caused a problem, advertisers were not getting any results and the performance was terrible. So they didn’t want to advertise using banner ads anymore. So Wechat changed it.
Now, in order for you to advertise as a banner, you must reach an agreement with an official account owner before you can actually advertise on their banners. So, other than that, these accounts are also restricted to Chinese inland companies only.
If your company requires a special license – in china, there are a lot of licenses – so if you’re a food company, you need a food license, Tencent must see the license before you can even advertise on these banner ads.
So the costs of these are – these are actually incredibly expensive and it’s almost not worth it. So again, its performance based of course. It’s by impression, it’s by clicks and it’s by an agreement you reach with the subscription official account.
But the thing is Tencent will usually require you to put down at least 20 000 USD to 75 000 USD just to start a campaign. So it is actually quite expensive. In our opinion, it’s definitely not the best way that you want to advertise on WeChat.
The third and finally the last way to advertise on Wechat is to pay for what Chinese people like to call, “Wang hong,” or key influencers, right? So, recently, even in the States and around the world, there are many celebrities on the internet.
So, key influencer, in my opinion, is just a celebrity that’s on the internet. They may not have the hundreds of millions or even tens of millions of influencers but they may have a million or 2 million, that’s more than what I have anyway.
So they’re little celebrities on this internet. In china, it is especially true and it is kind of weird because in China, generally speaking, key influencers are usually girls.
There are guys, of course. In certain markets, they are key influencers. They are experts and other stuff, of course but oddly enough, it is just generally girls.
In China, there are a lot of key influencers and it is incredibly popular right now. So, the way it works is that you would do essentially what you do with a banner advertisement with Tencent except you would directly approach them and you would talk to them and you would negotiate a deal.
So, you can do a couple things with this. You can pay for banner ads under subscription accounts or you can pay for them to do a product review or you can pay them to write you an article or to endorse your product or you can pay them to give away your product.
So these are multiple choice it really depends on what you want and who you want to approach and if they want to do it. There is no one way of doing this.
The cost – well again, the cost may vary. It depends on how well the audiences are and how much influencers they have and it depends on how much they want to charge you. It could be as little as $300 RMB which is about 50 bucks to reach maybe 1000 people or 500 people or it could be as much as 50 000, right?
It could quite expensive on one end or it could be quite cheap however what we find is that if you find the right influencer and you’re willing to pay a decent amount of money – not the cheapest but decent amount of money – it generally works better than the WeChat banner advertisement. The only thing that may be even better is moments but again, it really depends on your ad.
So here are some resources that you can use to find influencers in China; there’s thenewrank.cn, there’s the parkloo.com and wemedia.cn. These are platforms you can use to look for influencers and kind of communicate with them.
Of course, they charge a service fee. Alternatively, like I said, you can contact us. We can work something with influencers. We see if we can find somebody who is in your niche that can promote your product for you.
So, of course, almost always every business wants to know which type of advertising channel is right for you. This one is a little bit hard to say. For sure, we don’t recommend banner advertisement because it’s expensive and the performance is… you can really accomplish the same thing with key influencers that you can with banners.
So why would you pay for the banner? It doesn’t make any sense. Moments, on the other hand, is kind of worth it in our opinion however that requires a large amount of budget.
So, if you don’t have a large amount of budget, the reality is you’re only left with key influencers advertising. Anyways, that ends our last video on How to Market on Wechat for Foreign Business Owners.
So if you have any questions, you can always leave us a comment or you can shoot us an email of if you want to share your experience or your success with Wechat, feel free to let us know. Feel free to write to us.
We’ll be glad to hear you and we always reply to your emails. Other than that, we wish you all the best and the best of luck with Wechat. That’s it, have a good one