How Tencent Is Charting Its American Advertising Expansion
"We’re talking to agencies and brands about how to use the entire online ecosystem that Tencent can offer," says Tencent Corp. VP Steven Chang.
Chinese social media and e-commerce giant Tencent’s decision to host two days of panels at Advertising Week NY was meant to underscore three main points: China’s higher-spending consumer populations are growing rapidly and they’re traveling extensively.
But it’s the third point that was the most crucial: Tencent has a range of targeted content and marketing solutions that can help U.S. agencies and brands better reach those shoppers than Google, Facebook, and Amazon.
Panelists at the company’s Advertising Week presentations also drove home three other points of differentiation between Tencent and its U.S. rivals. For one thing, there’s the immense amount of people using Tencent’s messenger apps WeChat (963 million monthly active users) and QQ (850 million), along with social media platform Qzone (606 million).
Where They Spend Their Lives
But the other thing is the level of trust and integration that Tencent users have placed within those digital outlets that has them sharing their lives and interests while at the same time making purchases without leaving those sites rivals anything Google, Facebook, and Amazon can do so far.
“There are a lot of places to reach Chinese audiences, but WeChat is where they spend their lives,” said Tencent Advertising Week panelist Bonin Bough, formerly Mondelez chief media and e-commerce officer and currently host of CNBC’s Cleveland Hustles. “When I was at Mondelez, we did a lot of work with WeChat in Brazil. And one thing our industry doesn’t realize is how large the Chinese consumer audience is outside of China as well as inside.”
On top of it all is the fact that Tencent’s devoted app users tend not to use Facebook, Google, and Amazon. In part, that’s due to certain online restrictions within China, but for the most part, it’s the natural cultural affinity for Tencent’s products.
“For someone who is used to using WeChat, that person isn’t going to download Facebook for a 14-day trip,” Makiko Matsuda Healy, SVP of Tourism Development for NYC & Company, the city government’s official visitors’ bureau. “They’re going to keep using their Chinese apps. We realized that when it came to promoting NYC businesses and attractions, we needed to be where those Chinese travelers are.”
Beyond Travel And Tourism
All that has allowed Tencent to maintain such a high degree of engagement with its users that makes the difference, says Steven Chang, a corporate VP of Tencent who spoke at the company’s Advertising Week presentation.
While the emphasis of Tencent’s appearance at Advertising Week was on travel and tourism, in a conversation with GeoMarketing, Chang noted that tourism was simply a good way to begin a conversation about how Tencent’s “entire ecosystem” of apps and advertising tools could appeal to agencies and brands across all business categories.
“You have to start with somewhere and travel and tourism is a perfect place for us to start talking about what Tencent and its properties are and what we can do,” Chang said. Travel is easy because it does show that level of cultural and consumer exchange. For example, consider the work we do with TripAdvisor. Everything we’ve done together touches into so many other business verticals.”
In addition to reaching out to agencies and marketers, striking new alliances is also on Tencent’s agenda, Chang said.
“The fundamental question today is, ‘Why are we here?’” Chang said. “There are not too many American advertisers or American marketers that know about Tencent. They may have heard of WeChat. That’s why one of our goals is to see how we can expand awareness. This is a very simple goal.”
The promise of working with Tencent on Chinese visitors in the U.S. comes with the possibility of extending that relationship back to consumers when they return home.
To put that opportunity into perspective, more than eight in 10 internet users in China — roughly 626 million people — will access social networks regularly in 2017, according to eMarketer’s forecast this past June.
eMarketer raised its previous projection for social network user growth in China by more than 4 percent, mainly because of older users increasingly “using homegrown messaging platform WeChat to perform a myriad of tasks that reach far beyond messaging.”
For fashion brand Rebecca Minkoff, it began working with Tencent after noticing that it started seeing rising organic traffic coming from China to its U.S. e-commerce site.
“Given that huge influx of pure organic indirect traffic and qualified traffic, we just thought about what we could do to amplify that,” said Ye Jin, Global Director of Customer Experience & Strategy at Rebecca Minkoff. “
For Simon Property Management, which operates over 200 malls across 37 states, the realization that Chinese tourists were coming to its shops made working with Tencent just as obvious as it was for Rebecca Minkoff.
“We know that in the past, these tourists came to our malls by bus in big groups,” Kristen Esposito, Simon Property Group VP of Tourism and Marketing Alliances, told us after a panel appearance. “But, now as tourism starts to segment more towards the individual traveler, we needed a new mechanism to be able to reach people who are not all going to go to the same place at the same time.
“Plus, as their trips become more frequent, they’re trying new destinations and they’re remembering that they’ve shopped with us in the past,” Esposito adds. “With WeChat being such an important way to reach people one-on-one, it makes sense to deepen our connection with the company’s marketing tools. The next step we’re looking at is how we can build up our presence within the Tencent ecosystem.”