Tencent Enters US Market With Ad Solutions And Access To Vast Amounts Of User Data

Chinese tourists spent $35 billion dollars in the US in 2016. WeChat parent company Tencent rolled out a suite of advertising tools on Thursday to help US brands reach that spendthrift audience both in China and abroad.

The scale of Tencent’s audience is staggering. WeChat alone has 963 million monthly active users, nearly three times the population of the US. Fifty-five percent of all mobile internet usage in China takes place on Tencent platforms, which also includes Tencent News, Tencent Video, QQ, its instant messaging platform, and Qzone, another social networking site.

“All of these products give us very good coverage and insight into what user behavior looks like on a daily basis,” said Poshu Yeung, VP of international business at Tencent.

The rollout follows six months of beta testing with US partners, including Zillow, luxury fashion designer Rebecca Minkoff and shopping center operator Simon Property Group.

Tencent will initially offer its ad solution as a managed service. A dedicated sales team in Palo Alto will provide support and consulting services to help advertisers spend their budgets most effectively to reach Chinese consumers

If advertiser appetite exists for a self-serve option, Tencent has tentative plans to start building a DIY interface within the next six months.

For now, however, advertisers will be able to work directly with Tencent to set targeting parameters for campaigns based on user data collected from across its offerings, with WeChat being the largest of the crop.

“We look at data from all of our platforms to create audiences,” Yeung said.

In addition to standard demographic targeting options, Tencent will offer more bespoke criteria, including behavioral data and average revenue per user.

If Tencent knows that a user is planning a vacation to the United States in a month’s time, for example, an advertiser can use that information to target campaigns in the weeks leading up to the trip.

Tencent will also offer offline attribution through the WeChat Pay mobile payment service.

“Chinese travelers that come to the US can pay in shops and complete the last mile,” Yeung said. “That will drive ROI for advertisers.”

The ads will appear on WeChat within Moments, the equivalent of Facebook’s news feed.

Although Tencent rakes in an enormous amount of revenue largely due to advertising – online ad revenue jumped 55% in Q2 to 10.15 billion yuan (more than $1.5 billion) thanks to WeChat ads – the T in BAT is happy to take it slow and play it safe.

Tencent only shows one ad per user per day within WeChat’s timeline experience. It’s a slow burn that means WeChat has a lot of runway ahead in terms of monetization.

“But we don’t want to be aggressive,” Yeung said. “We’re running tests to understand what the magic number will be without affecting user behavior.”

Chinese consumers have long been an attractive target for overseas advertisers, but cracking the China market is notoriously challenging.

Tencent wants to be there to hold their hand.

“China is still a mystery to a lot of advertisers,” Yeung said, “and advertisers still need more education on what to do and how.”

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1 Comment

  1. Do we know how to start getting connected with Tencent to run advertisements yet? Their websites are not clear.