The Buzz Feed of China?  China’s New Mega-App? Does it Justify the Hype?

 

What is Toutiao?

Toutiao could well be touted as the ‘Buzz Feed of China’ although there are many fundamental differences in how they operate.

Toutiao is to some degree a ‘news app’ or more specifically a ‘news aggregator’ which now boasts 180 million monthly active users (MAUs) and has been valued at $20 bn.

The key to Toutiao’s success is Personalised Recommendation. Toutiao have even referred to themselves as a ‘Recommendation Engine’.

Toutiao collates Chinese content based on user’s preferences and selected categories to provide a ‘personalized news feed’ for Chinese users.

The App was founded in 2012 and in many ways has become one of the ‘tech unicorns’ in the China market with such a high valuation and strong user base.

 

Why Such a High-Profile App?

Despite only 5 years of activity Toutiao is now the second largest News App (below Tencent News) and above Sina & Sohu News.

Toutiao is growing incredibly fast, this is largely due to the APP being a pure mobile product that taps into China’s tenacity of mobile & mobile optimized content.

The high valuation of the APP at $20 bn has created a huge buzz around the potential of this player in the Chinese market.

Toutiao’s Brand logo is becoming increasingly recognisable in China 

 

An Advertising Shift from ‘Pull to Push’

Active search engine research (PULL Info) will never be redundant on Baidu (China’s Google). Baidu still preside over 75% of the search engine market with a presence here still important in a serious marketing campaign.

However Toutiao & other similar news apps are catering for the demand in China also for PUSH.. that is content pushed to users based on their preferences, selected categories and browsing history.

Toutiao with their algorithm to collate data are at the cutting edge of targeted pushed based content and set a precedent for a stronger demand for this in China.

 

Toutiao News Feed where targeted content is being pushed to readers. 

 

Advertisers Benefit from Targeted ‘Push Content’

News apps such as Toutiao have a wealth of data on users preferences for content, news, articles and conversation topics. Users select specific categories based on preferences.

This is a powerful tool for advertising, simply because your ad can be pushed to a users feed, it also appears in-line with relevant news & entertainment content that is TAILORED to the end user, this results in a more TARGETED ADVERTISING.

What are the main benefits?

  • Pushed Ads to more targeted Users
  • Ads appear in-feed, they are therefore more qualified and newsworthy
  • There is a strong culture of clicking on ads on Toutiao

Ad content can be linked to HTML5 contact forms for lead generation OR be used to drive traffic, it is a flexible opportunity with CPM (Cost Per 1000 Impressions) of between 20-25 RMB.

It’s worth noting here that Toutiao are focusing on developing video ad content for in-feed marketing strategy, this could be interesting in terms of increase Click Through Rates, Engagement & Exposure time. We will keep a close eye on these developments.

 

Image; Ad inserted into the feed based on targeted content for the user

 

Not simply a ‘News App’.. more an ‘Entertainment App’

The key difference between Toutiao and the others is that; 60% of content on the App is entertainment based.

This is not a typical news product, rather a mobile reading & entertainment platform.

This type of content (sometimes called ‘soft content’) can be appealing for brands if their products are in the lifestyle, FMCG or entertainment spheres.

If your content is focused on ‘harder’ or more ‘intellectual/serious’ topics News Apps such as Tencent, Sina or Sohu News may well be a better choice.

Ensure you speak with an expert consultant on the best platforms for your business.

A Highly Engaged User Base for Advertising

The average time spent by each user  on Toutiao is 992 mins per month.  

To put this in context on WeChat users are spending 1192 mins.

Toutiao is therefore the second most engaged with platform in China in terms of time spent by users. More time equates to more exposure to paid content.

For marketing, the regular stream of recurring users, lends itself to maximum exposure to content.

 

Image; A user accessing Toutiao via the App Store

 

Toutiao Embraces the Facebook Model

Toutiao is akin in some ways to Facebook’s news feed and has embraced the Facebook model of advertising. That is exposure to content in line with ads relevant to that content and the users previous preferences/online behaviour.

Like the FB news feed it is more entertainment rich than intellectually focused however this has allowed it to differentiate itself from other players in a very competitive space.

It’s also interesting because the Facebook model has typically not been adopted by Tencent’s WeChat, the largest network in the Middle Kingdom.

 

A More Fragmented Chinese Market

Chinese users don’t have a lot of time to spend on entertainment & news, it is hard to capture attention for a long time in the fast paced, frenetic modern China.

Users now have fragmented time, they engage with apps whilst;

-Early Morning

-Commuting to Work

-Over Lunch/Dinner

-Before bed

Toutiao provide FRAGMENTED reading articles that fits effectively with a user’s daily schedule in China:

A) Format – The format is shorter with short/bitesize chunks of news & entertainment

B) Content – As discussed it is lighter focusing on; celebrities, food, lifestyle, humour.

 

In a more fragmented market is Toutiao encroaching on Baidu’s territory for news & content? 

 

Recommendations are Very Accurate

A USP of Toutiao is that it offers more content and is more accurate than traditional news apps for tailored content to the user (remember this also means tailored ads).

Unlike a platform like buzzfeed content is not curated by an editor, the supply of content is endless and recommended according to your reading history, not by individuals.

It is an addictive process for the Chinese user as over time recommendations on the app become more targeted.

With a user base of 180 million active users the Algorithm has developed becomes more accurate in terms of tailored content, it’s a virtuous cycle with the more users leading to better targeted content.

 

Toutiao Official Accounts

Toutiao has even developed Official Accounts for posting content/articles on the platform. They are reportedly achieving higher read rates than typical WeChat accounts, likely because Toutiao is not a closed network, users don’t have to be connected first to view content from an Official Account.

The added bonus is that Toutiao is not such as competitive arena for content yet (when compared to Weibo or WeChat), this is an advantage for investing in a strong Toutiao reputation with strong evidence of further platform growth.

 

          Toutiao for Android or Iphone/Ipad  

What are the risks for Toutiao & how can they develop?

Toutiao despite growing rapidly over the past 5 years is potentially at risk. The Chinese market is constantly changing so Toutiao will also have to adapt.

Toutiao has not created a whole eco-system around their offering, rather they have a prime function (content distribution) but outside of collecting and presenting content they could be absorbed by a competitor.

In contract the big players BAT (Baidu, Alibaba Tencent) have built whole eco-systems with a range of different user services.

For Toutiao to capitalize on their huge valuation and growing user base they need to develop further dimensions to their level of service such as;

  • Social accounts/social connections
  • Potentially integrate the platform with external services
  • Toutiao plan on investing into Video ad based content 

 

 

The Future for Toutiao and Advertising?

In short, it’s looking bright! With more targeted in-feed ads/DSP opportunities as well as a growing user base Toutiao remains a promising platform for ad budgets.

With a model more akin to Facebook it is logical Toutiao will attempt to develop in this direction with a stronger news feed and monetization via ads (e.g video ad development).

Could Toutiao be the Facebook of China? Well.. There is space in the market for this with WeChat dominating with a very different model.

Investors into Toutiao are certainly banking on the absolute potential of the APP with the $20 bn evaluation. Hype is not meaningless in China though, it often has positive results in terms of user uptake, how else did WeChat grow if not through hype?

  

We are a team of native digital experts based in Shanghai, we have a deep insight into this fascinating market and stay ahead of the curve.

If you have a serious project for the Chinese market you can consider news app ads, contact us for a meeting with one of our consultants.

We also work extensively in the following area’s;

 

  • Baidu SEO/PPC
  • WeChat Development
  • Weibo Marketing
  • Chinese Content
  • PR/Media Exposure
  • Targeted Forums & Blogs (niche markets)
  • Ecommerce set up & branding
  • Lead Generation Services on Multiple Platforms

 

Further Reading:

Digital The Key for Brands to Export to China

20 Tips to Enter the Chinese Market

The Ultimate Guide to ‘Key Opinion Leader’ Marketing in China