CEO, China, Media Division
Brands must understand this evolution to optimize ROI
Social media marketing in China is becoming more complicated in ways that will dramatically affect brand building. Change No. 1 is the division of social media into two distinctive types of platforms that require distinctive brand initiatives. Change No. 2 is the influence of artificial intelligence, specifically on the use of Key Opinion Leaders (KOLs).
In change No. 1, China’s social media platforms have evolved into a new, dual-layer ecosystem. The first layer is fundamental social media. These Core Social Media Platforms aim to strengthen interpersonal relationships. The second layer, Derivative Social Media Platforms, leverage these social media connections and personalize filtered content to drive platform visits.
For effective brand building and maximum social media ROI, it is critical that brands understand how these different types of social media platforms serve different purposes, and then fit them appropriately into brand-building strategies. Investment approaches and evaluation methods differ for each type of platform. Think of the distinction between platforms like this:
Core Social Media Platforms
These are relationship-centric platforms. Brand strategy should focus on building connections with the brand’s customers by embedding the brand’s own products and services into online personal social dialogues. By doing so, the brand could also gather valuable data for its consumer database.
Derivative Social Media Platforms
These platforms are content-driven. Brand strategy should focus more on content to maintain or increase user engagement and thus grow traffic. A new KOL hierarchy has emerged on these platforms. Chinese social media users’ attention is gradually shifting from influencers whose primary appeal is entertainment, to influencers who impart knowledge. Reflecting the evolving sophistication of social media users, KOLs who can provide expertise in a particular field are gaining popularity and marginalizing KOLs who specialize in entertainment.
Artificial intelligence provides brand opportunities
In addition, artificial intelligence (AI) has powered a wave of new users on social media—AI avatars. AI technology can efficiently render highly creative content on social media. The content gets vastly distributed to users thanks to social media algorithms. When a lot of users enjoy the content, its creator (in this case an AI avatar) becomes popular.
AI provides new opportunities for brands to interact with social media users to increase brand affinity and advocacy. While AI is a disruptive factor in the current user relationship, it gives everybody a new starting point on social media investment. The earlier a brand invests in social media AI, the better performance it may achieve. It is also likely that AI technology will change the usual growth path of opinion leaders.
In a related development, AI could also be used to break the “walled garden” approach, in which social media platforms create closed systems that prevent third-party auditable measurement for evaluating performance across platforms. Using blockchain technology, it would be possible to validate and compare KOL performance and authenticity in social media marketing.
In this highly diversified and rapidly-changing Chinese social media environment, influencers and marketers need to work together to promote and develop an industry-wide, third party auditable measurement system that all stakeholders can willingly accept to ensure transparency in social media influences. Only with that transparency can marketers manage KOL/ celebrity price inflation, calculate real influence, and measure return-on-investment scientifically.
Optimizing social media ROI
With such a diverse and rapidly evolving social media landscape, social media investment in China needs strategic thinking. Here are three related actions brands need to take:
- The social media portfolio should include core social media and derivative social media, but their benchmark and optimization approach should be different.
- It is vital for brand owners to have a comprehensive pre-investment analysis before investing in KOLs and celebrities. The composition of which should include three parts: accurate profiling, third-party evaluating technology, and an ROI measurement system.
- Establishing social listening across all social media platforms is the key. This will help a brand have an accurate tracking of its performance online and identify key audience, key platforms, key driving forces, and key timing for campaigns.
There are existing solutions to analyze category buzz and evaluate brand performances. These solutions, such as Kantar’s Cooperator XI, can help brand owners understand consumers’ interests and concerns regarding certain topic or brand to support its brand marketing strategies. Brands can then gain a clear understanding of their social marketing performance to invest better and unlock potentials to reach and engage their target audience more effectively.