China emerges as a new advertising source for social networking sites in US

Twitter logo Photo: Reuters

Video advertisements by Chinese companies eyeing overseas markets have emerged as a new profit point for American Internet giants such as Twitter and Facebook, amid the popularity of video content among Internet users.

Despite being blocked on the Chinese mainland, Twitter, a US online news and social networking service, will be a desirable online arena, where Chinese companies can deliver advertisements in the form of short video and live video to reach out to potential overseas clients, Leslie Berland, chief marketing officer of Twitter, said at a brand marketing summit recently held in Beijing,

Twitter is ramping up investment in its video platform, through which cooperation with global advertisers including those from China can be easily made, said Alan Lan, general manager of the Greater China region at Twitter, citing data showing that the views of video content published on Twitter have doubled over the past year.

Currently, Twitter is one of the biggest delivery platforms of information flow advertisement on the Chinese mainland, where the company does not yet have an office. Twitter now operates two offices in Singapore and Hong Kong respectively which oversee the businesses in the Greater China region.

Chinese companies engaged in game, e-commerce and consumer electronics appear to have had greater inclination to advertise on Twitter because their potential clients are mainly people called the "millennials" (referring to those born in 1984-2000), who see Twitter as a major online community to voice their views, Maya Hari, Twitter's Asia-Pacific vice president, said in an interview with Caixin.

Twitter is also facing competition from domestic short video apps in attracting advertisers. Douyin, a popular short video app affiliated to news aggregator Today's Headlines, surpassed Facebook to become the app with the most downloads in Apple's App Store in the first quarter of 2018. When browsing the front page of Douyin, users frequently see advertisements mainly placed by online game developers and travel agencies.

However, Berland does not see Douyin as a big threat to Twitter, which she believes is ahead of the Chinese short video app in attracting distinguished personages, online celebrities, famous reporters and of course ordinary users from around world, thus offering a channel for users from all walks of life to express views about global trending topics.

In the fourth quarter of 2017, Twitter's revenue from advertisements grew 1 percent year-on-year to $644 million, accounting for 88 percent of its total revenue, said the company. Advertisements from the Chinese mainland mainly come from the sectors of game, e-commerce, technology and tourism.

However, Twitter's figure cannot be compared with rivals Facebook and Google. According to a report published in the Financial Times in December 2017, Facebook and Google grasped 84 percent of the global online advertising market in 2017.

Since leaving China in 2010 in defiance of the country's strict censorship rules, Google has kept an advertisement sales team intact, with a focus on Chinese companies wanting to go global.

Facebook, which is also banned on the Chinese mainland, has run advertisement business in the country for a long period of time, with its founder Mark Zuckerberg going out of his way to enter the world's largest Internet market. But recently, Facebook's integrity was damaged in a data scandal, in which the US social media platform is charged with selling private data of tens of millions of users to a third-party research firm Cambridge Analytica. The research firm reportedly used the user data to deliver directional political advertisements that helped Donald Trump win the presidential election in 2016.

In this aspect, Twitter has stolen a march. In October 2017, Twitter announced plans to adopt an advertisement transparency policy, which allows users to know the information about advertisers, details of advertisements such as duration and related marketing activities and what directional advertisements they will receive.

In March, Twitter added a new cryptocurrency advertisement policy, under which the advertisements of Initial Coin Offerings and token sales will be globally removed from its platform in order to ensure the "safety of the Twitter community".

Moreover, American business and employment-centric service LinkedIn has also shifted focus to the video advertisement business in expectation of growth in video advertising. A research report by LinkedIn showed that 62 percent of marketers surveyed in Ireland and the United Kingdom believed video advertisements would account for a large proportion of all kinds of advertisements in 2018. One fourth of business-to-business marketers surveyed predicted that their companies would spend more than 300,000 pounds separately in video advertisements in the year, according to the report.

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