The WeChat honeymoon period for brands is over
If there is one social media platform that ruled them all in China, it is WeChat.
With 846 million monthly active users (MAU) and 556 million official brand accounts, it dominates most lives in China, from collaborating and socializing to e-commerce and paying your bills. It is tough to find an alternative in the Western world and is seeing pioneers like Twitter and Facebook looking to follow them.
But according to social media manager and WeChat expert Totem Media, growth has peaked.
“WeChat will continue to be the most important channel for marketers in China for some time,” said Chris Baker, the managing director of Totem Media. “It is shaping up to become more of a CRM-Sales solution than it is an awareness channel.”
WeChat is expensive
WeChat’s popularity and phenomenal growth have its price. And its expensive price tag is impacting CMO social media budgets.
According to Totem Media, it is now costlier to gain a following on WeChat than Weibo. The crowded platform is also making it difficult to attract new followers, and immensely challenging to keep them interested in official accounts.
“Organic audience growth is stalling,” he said. “Audiences just aren’t going to follow as many brands in the future.”
To counter, WeChat is rolling out new paid solution for brands to build reach. Totem Media predicts it transform the mobile social platform into a paid-media one in 2017, buoyed by the availability of new paid ad formats.
Moments and Mini Apps
Moments’ importance within WeChat is undeniable. According to Totem Media, this is where organic growth is taking place. Content creation takes priority if CMOs want to use this paid ad format effectively.
“Moments” ads have proven very effective but brands using these paid ad formats must be sure to design the approach in ways that fit audience behavior in the Moments Stream, and must carefully design calls-to-action which convert to useful goals,” said Baker.
Tencent is also very protective of this format. Links are always monitored (and blocked) if the company feels it gives an advantage for rival platforms.
However, with the new ad formats in 2017, WeChat will enable self-service ads on Moments. The price for using this feature is also likely to be lower as Tencent ramps up its effort to gain more ad dollars.
Meanwhile, Mini Apps, 700 million MAUs, will soon become a key focus in 2017, says Totem Media. It will offer CMOs an opportunity to disrupt the messy app marketplaces in China, while ‘locking in’ users into its platform.
"Mini-apps could be great for brands if they can be used to stimulate-and-convert user attention back to the official accounts," said Baker. The challenge for brands (with the introduction of mini-apps) could be in splintering audience attention inside of WeChat, making it less likely that audiences go to ‘accounts,' and mini-apps could become the focus of attention, leaving ‘accounts' hard pressed to break through."
What CMOs can do
Baker recommends three paths to take with WeChat. For mature brands with high brand equity and strong WeChat follower numbers, good content becomes paramount.
“We advocate for really focusing on content engagement with quality visual content inside ‘official accounts,' thereby retaining existing followers and organically growing by word-of-mouth,” said Baker.
For brands who want to build their follower numbers, it is time to tinker with WeChat's paid solutions. Timing, however, is essential. He said: “It will be useful to experiment with WeChat’s paid solutions, especially right after they release those tools, as the biggest gains usually go to early participants.”
If brands are looking to build awareness, it may be better to study new channels for video and live video. According to Baker, these channels are set to make the biggest gains in attention in 2017.
“Live video is going to be an increasingly important part of China’s digital landscape,” he said. “For certain interest segments/categories, it is already critically important.”
However, moving to video is not a simple proposition. “Building and maintaining a video channel is a challenging proposition for most brands – it requires a very strong content creation skillset,” said Baker.
He advised that brands who have yet to build up strong abilities may want to experiment with live video together with KOLs (Key Opinion Leaders) by doing co-creations.
Future is not that bright
Baker believes that WeChat’s appeal is already tapering off. Like Facebook, the biggest drop is with the younger demographics. However, he also advised not to rule out the platform altogether.
“WeChat is, however, a great place for audiences to get things done and manage daily communications. WeChat has done a decent job of protecting audiences from too much spam in the past by blocking a multitude of marketing efforts in the past year, so additional ‘paid media’ are not likely to dramatically change its appeal with core users,” said Baker.
However, WeChat’s slowing growth points to another trend that may disrupt and re-shape the China’s crowded social media market--consolidation.
“Absolutely; there are too many channels right now,” said Baker.
“Consolidation is likely to occur rapidly in the year ahead, and the Government will push to do this,” he said, adding that both Tencent and its rival Alibaba will be involved in facilitating this consolidation.