Everything you Need to Know About Online Advertising in China
Looking to go big? We can guess your billion dollar question: How do I advertise in China online?
The answer is as complicated, as you’d imagine. Although non-Chinese business determined to enter the Chinese market should be cautious, they shouldn’t be afraid of the vast differentiation. The online Chinese landscape is saturated with a plethora of brands vying for consumer attention and international entrants already face a cultural barrier. But with a nation of over 800 million active Internet users, it would be a gross understatement not to partake in online advertising in China.
With different social media platforms, online narrative and consumer behaviour, you can’t simply translate your current digital marketing strategy. Even global brands with a bottomless marketing budget aren’t exempted from marketing faux-pas in China either (we’re looking at you Burberry, Coach, Pepsi).
So, how can you effectively go about advertising in China? If you’re a little (or really) lost on where to even start, we’re here to make the process a little less painful. Here’s your guide to understanding China’s online market and the best way to advertise in China.
Online Advertising in China: How does it compare to the rest of the world?
Put side by side, China stacks up as third against similar nations (US, UK, Australia and New Zealand) With US (6hrs 31m) ahead of the game with New Zealand (5hrs 55m), China comes just under at 5 hours and 52 minutes and Australia lagging at total internet use of 5 hours and 4 minutes per day. Additionally, social media penetration is the second highest in China (at 71% after Australia at 72%) compared to the US (70%), and the UK (67%).
Both sets of statistics translate into a population heavily associated with the Internet and social media use. Given the strength of the nation’s numbers online, targeting your business’ advertising is a profitable choice.
Best way to advertise in China: What device(s) are your consumers on?
Over 95% of China’s online users are accessing the Internet with their smart devices. Additionally, they spend over three hours on social media and e-commerce platforms daily. Compared to other regions, they top the charts with mobile Internet usage. The average US citizen spends just about 2.5 hours browsing the Internet on their mobile phones. Closely followed by users in the UK and New Zealand spending just over 2 hours and lastly, Australians at under two hours. Given these stats, it comes as no surprise that social media advertising in China is a must-have in your strategy.
As a result, mobile ad revenue is on a sky-rocketing exponential growth compared to its desktop competitor and even other regions. The 2017 ad revenue split between mobile and desktop was AUD $35/$20 billion respectively with the same split predicted to be $71/17 billion by 2020. The numbers speak for themselves and advertising efforts should be predominantly catered to the smaller screen. However, this does not mean desktop ads should be completely eliminated, either.
Consumers: Who are they and where can you find them to advertise online in China?
Being the world’s most populous country, it’s an understatement to say that audience targeting takes quite a bit of strategic thinking. Effective audience targeting requires businesses to look into how cities are split into specific tiers. First-tier cities include massive cities such as Shanghai, Beijing and Tianjin. Your immediate go-to strategy might be to target these cities given the consumer purchase power in this tier. However, you will most likely garner greater benefit from targeting second, third and even fourth tier cities. China currently has over 100 cities with a population exceeding one million and the consumer class is only growing in its purchase power.
First tier cities are saturated with brands and the rising middle class is beginning to have a greater disposable income. This translates into a greater willingness to spend on products. Targeting consumers in third and fourth-tier cities will prove effective in the long run as they grow in their spending habits.
Digital platforms & Networks: Best Places to Advertise in China
Perhaps the most apparent distinction between China and the rest of the world is the vastly different online platforms. China has its own equivalent of Facebook, Google and YouTube (amongst others). There are three major ad networks in China: Baidu, Alibaba Group and Tencent. There are more, but these three players make up 80% of all China’s programmatic advertising network. While the affordances of each platform are relatively similar, there are key differences that make advertising strategies different.
Within each network, there are varying types of platforms (i.e. social media, video streaming, search engines, etc.). The list below details a few of the major platforms under each ad network.
Baidu (Baidu Network: Search Engine Marketing)
Baidu is the Google of China and it owns approximately 70% of the search market share across Mainland China. Their interface mirrors that of Google’s and they have their own version of AdWords: Tuiguang.
As with Google, Baidu has its own search and display networks and they function the same. The only exceptions are the tedious nature of setting up ads on Baidu and the different text advertisement options due to the complexity of the Chinese language.
Setting up a Google Adwords account is a seemingly painless process but setting one on Tuiguang has a few more requisites. To set up a Tuiguang PPC account, you must have a business license, proof of website ownership (in Mandarin) and official supporting documents. If you have an offline presence in China, you will also be required to make a downpayment. On top of this, there is a two to four week waiting period for approval. Although the process seems relatively tedious, if you want to bid for search based queries, you best get on Baidu: the most powerful search engine network in China.
Sogou (Tencent), Qihoo 360 + other engines
As with the search engines familiar to us, Baidu isn’t the only player in the market. Sogou is the Yahoo of our search engines with Qihoo 360 following right behind. Similar to advertising on Yahoo, Bing and the lot, advertising on different Chinese search engines are a matter of demographic reach.
WeChat (Tencent: Social Media Advertising)
It’s safe to say that WeChat is an amalgamation of all our favourite apps. Think of your favourite messaging app, food delivery app, online shopping marketplace and more combined. The multi-purpose app is currently the largest standalone app with the most monthly users. The end of 2018 marked one billion monthly active users on WeChat and quantifying that into ad revenue is a little dizzying, to say the least.
As great as the reach may be on WeChat, entering into the advertising realm of the platform is a little tricky. In order for you to open up an account on WeChat to do paid advertising, your business should ideally be registered in China. On top of the legal requirements to advertise on WeChat, bidding on the platform is not cheap. This is likely why you may not find small businesses with limited marketing budget spending their money on the platform.
With that being said, if you have the capacity to bid on WeChat, there are three ways: Moments, Sponsored Banner ads and Key Opinion Leaders (KOL). WeChat Moments ads are like Facebook newsfeed ads. As the name suggests, sponsored banner ads are text ads written at the bottom of a message by an official WeChat account. KOL ads are influencers on the platform. They are essentially bloggers you can pay to promote your brand and content.
Sina Weibo (Social Media Advertising)
Like WeChat, Weibo is a hugely popular platform. It’s the Twitter of China and it’s probably the easiest app to place your ads on. Want proof? Take a look at the numbers: 850 million users in total and 245 million active users monthly. Weibo has four advertising models:
Weibo Display Advertising: Display advertising follows the same principles much like other social media platforms known to us. Display ads are banners on pages on the Weibo pages (mobile app or desktop version). Clicking on the banner will direct a user to the homepage. Cost for a banner placement depends on the placement choice and the size of the banner.
Weibo Search Engine Advertising: This type of advertising opens up your brand to new users. The Weibo search bar is pre-populated with popular keywords and terms (much like on Twitter). When a user types in a keyword or term into the search engine, promoted accounts come up on top of the search results that match those keywords.
Fan Headline: Also known as Fanstop advertising, there are three types of fan headlines. This option is a quick and efficient way to promote your brand or page.
- Fan Headline: Posts
If you want to promote a branded post, you can opt for a Fan Headline Post. This will place your promoted post at the top of a user’s newsfeed. Your post can be promoted not just to your existing followers but followers with similar likes and interests and those Weibo believes will be interested in your brand.
- Fan Headline: Others’ Posts
This works similar to the first option but with the exception that if you have a KOL publish a post about your brand, you can promote it. The post can be promoted to the top of the feed of your KOL’s follower feeds.
- Fan Headline: Accounts
Just like promoting posts, you can promote your account at the top of the search function to followers deemed interested in your brand for a certain period of time.
Fan Tunnel: Fan Tunnel on Weibo allows your posts or account to be featured in newsfeeds across your target audiences. This type of advertising works similar to Fan Headline with one key difference. Fan Headline advertising allows your posts or brand to be promoted to your followers and friends of followers. Weibo Fan Tunnel advertising gives you the option to push your posts or account to a larger Weibo audience not defined by followers who already interact with your brand. Similar to Facebook’s target audience advertising, you can push your advertising to a select demographic, age, gender and other interests.
Similarly, your pricing for Fan Tunnel advertising will depend on general CPE or CPM whilst prices for Fan Headline advertising depends on the size of your followers.
Taobao & Tmall (Alibaba Group: Marketplace advertising)
Alibaba is known for for its large marketplaces (think: the Amazon of the East). Alimama (Alibaba’s ad platform) allows brands to advertise on Alibaba’s marketplaces. Taobao and Tmall are China’s biggest e-commerce websites. Advertising on these platforms would be incredibly beneficial for brands selling a product. Additionally, its success stems from the ability to understand the entire customer journey across other Alibaba platforms such as AliPay, AliExpress and GaoDeMap. This better predicts consumer behaviours and patterns that can translate into effective advertising.
Tencent QQ (Instant Messaging App)
Tencent QQ is an instant messaging app with a variety of social offerings similar to WeChat. Advertising on this platform would be beneficial for anyone looking to target 3rd and 4th tier cities in China. In fact, 60% of users who hang out on Tencent QQ are under 30 years old and are mostly high schoolers and grad students. Thus, they have limited spending power. If a brand is looking to target a younger audience and garner loyalty from a young age, advertising on this platform can be fruitful. Brands with high volume products would be best suited for Tencent QQ as opposed to more mature categories such as luxury products and real estate.
Toudou Youku, Tencent Video & IQiYi (video streaming platforms)
Considered the YouTube of China, advertising on Youku is effective for a whole brand-style type of advertising. As of October 2018, Toudou Youku had 580 million registered users. It’s important to note that Youku does not function the way YouTube does. Whilst YouTube contains a majority of user-generated content (UGC), Youku hosts more professionally styled videos and users can even stream or download TV shows. Similar to YouTube’s paid services (YouTube Red), businesses can opt for banner ads, text links, in-video ads and pause ads. The analytics backend can also help segment audiences according to specific demographics, location, language etc.
Youku topped the charts as the number one video streaming platform until late 2018 when Tencent Video took over followed closely behind by IQiYi. This has pushed Youku to third place. With over 500 million monthly active users, Tencent Video sits at the top of the video streaming services in China. Advertising video content on Tencent Video will garner significant eyeballs.
Zhihu (China’s question-answer platform)
Zhihu’s importance within the sphere of advertising lies in its trust factor. Zhihu to Baidu is like Quora to Google. If you haven’t noticed before, you may note that many Google SERP’s for query-based searches will bring up Quora results. The reason lies in the trust factor and Baidu considers Zhihu a trustworthy website providing useful information. Although this is a unique type of advertising, the reach on Zhihu is tremendous. Whether you decide to advertise on the platform or be a contributor to answer industry-related questions, you will promote brand awareness.
Effective Advertising in China: Should you do it?
No matter how successful your digital marketing strategy is in another market, any brand wanting to enter China will require a comprehensive rethinking of strategy. Beyond the cultural and language differences, the consumer behaves very differently. Moreover, your (potential) consumer hangs out on vastly different platforms compared to traditional western apps and websites. Entering the Chinese market is about context as much as it’s about the content you provide. If you are interested in targeting the Chinese consumer, don’t leave room to be blindsided.
Experts in advertising to the Chinese consumer market can tell you where to advertise, whom to advertise to and understand the affordance of each digital platform. Looking to market to Chinese consumers? Hire a China digital marketing agency dedicated to providing advertising solutions and open your brand to the biggest consumer group in the world.