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Tencent Says It Understands Social Media Better Than Facebook – The Rise of Social Media Advertising is Still Just Talk

Even though social media advertising is still in its adolescence, one underlying message of an interview released today by TechWeb was that Tencent believes it understands the market better than its competitors.

Conducted in Guangzhou with one of Tencent’s Product Managers Liu Yao, the interview put a particular emphasis on the way that social media advertising is perceived today.

While he does not discount the potential of social media, Mr.Liu suggested that most outlets have prematurely heralded the rise of online advertising. “Social media advertising is just like Internet advertising ten years ago, which was basically a gimmick. Marketing at the moment is full of ideals and people put more weight on the platform than on its actual effects,” said Mr. Liu.

Using General Motors as a major example, Liu Yao reminded readers that three days before Facebook went public in May, the car manufacturer announced that they would be retracting their $10 million dollar Facebook advertising budget based on disappointing results. This undermined confidence in the platform just before its big day. Facebook has since seen its stock price fall by thirty percent since it came to market (though recent developments have shown that GM and Facebook are still talking).

Liu Yao then went on to his second, though perhaps rather vague, point. “Social media marketing is highly sensitive to privacy,” he explained. “Before 2006, the Internet was largely a platform for documents and websites, nothing more,” he exclaimed. “Since the 2006-2008 period, the Internet has become a network of people; that is, the interaction between people has become the greatest source of traffic.”

“Any action can be a matter of privacy now. You can roughly imagine that the entire Internet is now private and intimate. This situation is rather unprecedented, whether it is for users, governments, media, or marketers. No one knows how to manage it,” said Mr.Liu.

And privacy relates to conversion rates, he explained. Tencent’s QQ popup windows definitely increase “exposure,” but whether this helps conversion rates is still up in the air. According to his assessment of earlier data, 80% of online advertising has had no effect whatsoever on conversion rates. People just love the idea of advertising online, he admitted. Still, he did not necessarily explain how this was sensitive to privacy.

Recent Developments

Tencent recently announced a prelude to its new “social marketing platform” at a summit in Beijing earlier this week. According to this announcement, they will be fusing all of their social media and networking platforms more integrally “to enhance social value.”

Liu Yao had one last plug to make, explaining that Tencent would soon begin to provide advertisers with more user characteristics, including mass amounts of data that would help to “accurately classify info” and make advertising more precise.

According to Tencent’s estimates, QQ’s advertising already reaches a community of more than a billion, with more than 700 million active users on QQ Messenger and 550 million users on QQ Space.

It should be interesting to see how this will pan out.

Source: Guangzhou Daily (TechWeb)

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