6 Things I Learned at Chat Conference & Expo

For businesses trying to crack the Chinese market, WeChat has been a perpetual headache. Its insane popularity (more than 800 million monthly active users) makes it indispensable in the marketing plan, but its complex product structure makes it incredibly difficult to calculate returns.

Chat Conference Venue
Participants as eager to learn as I am!

The Chat Conference & Expo, held on Feb 25 in Naked Hub co-working space in Shanghai, invited 11 speakers in the social/digital space and PR/media, including my humble self, to share insights on how the pioneers in this space have been experimenting and starting to figure out what works, how to engage with authentic content and how to monetize.

For my presentation, I shared an analysis of WeChat’s new Mini Program: its strategic role in WeChat’s continuing growth, its relationship with existing product features, and its mostly applicable business scenarios, and a look into the future of WeChat. Most of the presentation was derived from my first medium article, and here’s the slides I used at the conference.

Let my 6 takeaways from the day of sharing and learning:

1. WeChat is NOT (yet) a marketing/advertising platform, it is first-and-foremost a social platform.

Unlike Facebook, which provides a comprehensive ad platform for marketers with a wide range of budgets, WeChat’s advertising channels are highly decentralized. As a brand or a marketer, you can choose to contact specific WeChat public accounts or KOLs(Key Opinion Leaders) for content marketing (rates can vary dramatically); you can buy advertisement through the newly rolled-out “Moments”(Facebook Newsfeed equivalent) advertising; You can launch campaigns through relevant WeChat public accounts or through your own public account. There isn’t a simple back-end system for businesses to monitor marketing activities on WeChat, let alone calculating ROIs.

Advice to business:

  • Businesses have to recognize the complexity of WeChat marketing before devising a plan, because it can be a money-sinking blackhole. Ultimately, WeChat is a social product and its goal will always be end user experience:
“Everything is with user value in mind. The value to the user is the first priority.” — Zhang Xiaolong (WeChat founder)
  • WeChat Moments Ad has seen a dramatic increase since its inception. Ads linked to loyalty programs/membership will remain important, because of the easy integration with WeChat CRM APIs.
  • It’s only a matter of time that new WeChat ad formats will arrive; and if you adapt quickly, early movers usually has a huge advantage.

2. WeChat’s campaigns can be more effective than content management.

Businesses can create interactive webpages (H5 campaigns) within WeChat to promote specific events or products. The campaign can be a simple gamification of a product promotion, or an enticing narrative told through images. 2016 has seen a plethora of innovate WeChat campaigns that converted plenty of onlooking WeChat users into consumers. Here’s a quick example:

The French fashion brand, Yves Saint Laurent, created the “Kissing Habits Survey” campaign on WeChat to coincide with the launch of its lipstick collection. Members are invited to complete a short survey about kissing styles, give out gender and star sign information, after which users receive a kissing habits evaluation and a lipstick recommendation.

Simple. Effective. Easy to Share.

On the side of original content creation, the picture isn’t as pretty. The number of WeChat official account has grown from 1.4 million in 2013 to 14 million in the first quarter of 2017. It means content producers are facing steep competition. Data has already pointed out that average views on WeChat subscription accounts fell from 12% in 2016 to about 5% in Jan 2017.

Advice to business:

  • Compared to consistent content creation (which costs and doesn’t scale well), WeChat campaigns are targeted, interactive, highly viral and relatively cheap (because it’s often one-off).
  • The key for successful campaigns includes adopting the latest ad format, drawing inspiration from traditional cultures, defining clear calls to action, integrating with your CRM infrastructure, etc.
  • Content in official/subscription accounts is going to have diminishing impact. However, quality content is still hard to come by and will be rewarded by consumers.

3. WeChat KOLs are getting expensive and ineffective.

Similar to Instagram’s influencers, WeChat KOLs can be paid to advertise products on their own public accounts and personal newsfeed. However, the information on KOLs’ specific reach, where to find them and pricing structures can be highly opaque.

You can either pay an agency to identify the KOLs for you or go to Sina Weibo (China’s twitter equivalent) to search for people who meet your threshold of a KOL (fan base, post popularity measured by no. of likes and retweets). Within WeChat, unless you subscribe to all the public accounts there are, it’s incredibly difficult to identify the KOL with the right profile.

These days, a typical KOL WeChat post (usually in the form of a soft advertisement where the ad message is disguised in the KOL’s usual narrative style.) can fetch anywhere between 8k and 30k renminbi. Since KOLs’ WeChat posting frequency is usually high, so the ROI for this kind of marketing is diminishing.

Advice to business:

  • For new players with moderate marketing budget, it might be more cost-effective to hire a group of cheaper KOLs for a longer period of time, than to hire a mega KOL for a one-off campaign.
  • Be budget-smart and use social bloggers.

4. WeChat’s Mini Program is not a replacement for the native apps on your phone.

Another speaker and I both spoke about Mini Programs at the conference and we were largely in agreement about the role mini program plays within the WeChat ecosystem: the use for Mini Program is bringing more offline traffic to online; It’s essentially a value-add for offline businesses. The best case example for mini programs is the popular bike sharing company, Mobike. Now, you can scan the QR code attached to each bike with your WeChat and pull up the Mobike mini program directly. You no longer need a full native app for that.

Interface of the Mobike native app
Interface of Mobike Mini App

However, not all companies fit in this business scenario: scan an offline QR code to pull up an immediate online service. Most online/mobile businesses are still fully online, which means a native app is still merited.

Additionally, mini program is only fulfilling a small part of WeChat’s mission: encouraging more offline businesses to join its ecosystem. Take a look at the structural map I drew up below; mini programs is somewhere between a WeChat html page and a phone’s native app; it is not designed to replace native apps entirely.

Despite the early buzz, mini programs are receiving diminishing attention over the first few months after its launch. However, I remain hopeful about this experimentation. With more features and APIs added, this can be an interesting business driver for WeChat. You can see more analysis in my previous article on Mini Programs.

5. WeChat’s improved search function is hinting at a new direction?

WeChat’s continued dominance on mobile user time has spurred rumors about its foray into mobile search, a very credible threat to the search engine giant, Baidu. But the search function in WeChat has never lived up to the promises… until recently.

The search bar now can lead users to search moments(newsfeed) and official accounts. You can search a friend’s moments or a group chat and zero in on specific dates. You can even find the articles that your friends have read.

Main search interface
Search articles/videos read by friends
Search a friend’s Moments by keywords or dates

Is WeChat search going to claim a surprise victory over Baidu, just as its WeChat pay caught up with Alipay rapidly in the past year? My guess is as good as yours. I’m betting on the search function venturing outside of WeChat and posing a real threat to Baidu. Whatever the outcome, it is going to be a fun thing to watch.

6. WeChat’s Data security is a real concern among the tech community.

With the launch of mini program, WeChat is building it’s walled garden and making people love it. Users can directly pull in a mini program within a group chat to live edit data and make consumer decisions. The activities of WeChat vertical communities were previously unknown to WeChat because people leave the app to access other relevant services to complete the last leg of transactions; but with the launch of mini programs and many more such products to follow, more and more consumer behavior will become detectable data to WeChat.

Mini program is just another example for users to complete full transactions within WeChat’s ecosystem, and in turn, WeChat will be able to monitor and track a complete business transaction. [sidenote: WeChat mini program uses .wxml, .json, wxss which gives them unique rights to user data collected through their own coding language]

For marketers, how a user in a vertical community ends up arriving at a choice and completing a transaction is invaluable data. WeChat is the current proprietor of such data and we have no idea how it’s planning to safeguard and utilize this data.

In the next few years, the reliance on WeChat is only going to grow, and the user data collected is going to gain more structure and clarity. The protection of such data will be of paramount importance for Tencent.