China KOL Market Analysis - An R3 Report

China KOL Market

Analysis Report

An R3 Report in Association with WBY

Preface As the overall market for content marketing has hit a plateau, factors including platform differentiation, integrated marketing strategy, and marketing performance metrics are still based on a brand’s differentiated market positioning, its next market goal, and its target audience. In today’s market, content marketing not only relies on the quality of content, but also increasingly relies on traffic. When relevant content, marketing and sales, online traffic, communication, and entertainment have all been integrated into a “self-media” to which everyone is connected, the great power of such media is self-evident.

Echoing this is the development of multiple KOLs that consist of large and small businesses. When the market has passed the initial rapid growth, how do these individuals or companies continue to reign supreme in the industry?

As an independent consultancy with KOL audit qualification, R3 has found that while marketers have been increasing their content marketing budgets and investment, there are several significant challenges that remain unresolved. These issues lead to wasteful and sub-optimal investment.

Together with one of the industry’s leading content delivery platforms, WBY, R3 has developed a 2021 China KOL Market Analysis Report. This report aims to organize these factors, which tend to evade generalization. In addition, we attempt to include general placement strategies and marketing approaches for different platforms to analyze common problems and to suggest solutions to solve these challenges. We hope this report will help marketers to optimize their marketing competitiveness and improve the efficiency of their marketing investments.

ZERO-BASED BUDGETING

Table of Contents 1. KOL Marketing Investment Trends Summary of KOL Market Investment for Marketers TOP KOL PLATFORM BUSINESS TRENDS KOL MARKETING OVERVIEW OF MAJOR SOCIAL MEDIA PLATFORMS • •

KOL Strategies and Commercialization Chain of Major Social Platforms Features of Major Social Platforms for KOL Marketing

KOL Classification & Evaluation • Multi-dimensional KOL Evaluation to Achieve Effective Advertising • KOL Strategic Classification • Overview of Typical KOL Marketing Roadmap by Tiers Adopted by Mature Brands

2. KOL Marketing Flow, Value Chain and Management • • • • •

KOL Effectiveness Management & Buying Efficiency – How Did We Get Here?

Typical Issues in KOL Marketing Effectiveness Management Case Study: Precise Targeting via Catering Various Platform Characteristics Case Study: Empower Pre-buying Management Through Comprehensive Data Optimization + Benchmarking Case Study: Establish Comprehensive KOL Management Scheme to Increase Buying Effectiveness & Efficiency

3. KOL Effectiveness Management and Evaluation • • • • • • •

Comprehensive Evaluation of KOL to Increase Marketing Effectiveness Complete Strategic Flow and Effectiveness Measurement Scheme for KOL Marketing Case Study: Communicating with Different Social Circles Through Customized Content Case Study: Cooperating with KOLs with Different Attributes Based on Livestreaming Goals Case Study: Burberry Builds Product Seeding Through Multiple Layers of Social Circles Case Study: Tiffany & Co. Creates Viral Marketing Through Core Events Case Study: Enhance End-to-End Buying Management from Pre-buying Check + Post-buying Audit

DRIVING TRANSFORMATION FOR MARKETERS & THEIR AGENCIES

All Categories Are Focusing on KOL Marketing while Beauty and CPG BRANDS LEAD IN SPEND Although the number of brands in the beauty and cosmetics industry investing in KOLs is comparable to other industries, the investment in KOLs in beauty and cosmetics far exceeds that of other industries, reflecting greater consumer demand and spending power for beauty and cosmetics among users of new media platforms. The current market environment has prompted more industries offering premium-priced products, such as automotive and education industries, to try and maintain brand enthusiasm through KOL social media placement. To a certain degree, this trend reflects KOLs’ wideranging adaptability to different industries. As product livestreaming becomes increasingly prevalent, a KOL not only serves as a channel to display products, but also a long-term source of output for high-end brands to enhance brand identity.

Top 10 Categories for Ad Placements 2019 vs 2020

+8%

Top 5 Categories of Placements 1. Beauty & Cosmetics

2. 3c Digital

3. 3c Digital

4. Mother and Childcare

5. IT

+171%

Beauty & Cosmetics

3c Digital

Food & Beverage

Mother and Childcare

IT

2019

Automotive

+43%

Household appliances

+20%

Clothing, Luggage, and Handbags

Medical Care

2020

Main Categories of Product Placement in 2020 20%

17%

Other

Beauty & Cosmetics

5%

12%

Education & Training

Food & Beverage

6%

Mother & Childcare

10%

6%

IT

3c Digital

7%

Clothing, Luggage, & Handbags

7%

Automotive Source: WBY 2020 KOL Social Media Advertising Placement Analysis Report

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10%

Household Appliances

Finance

China KOL Market Analysis Report

Traffic VARIES ON Different Platforms, Investment Varies Greatly on Leading Platforms

Change -14%

Change -12%

Change +52%

Weibo relies on its large base of users, which includes a younger demographic group, and open interaction, which is conducive to sparking innovative ideas and creating marketing opportunities.

WeChat’s official accounts are mainly in the form of graphics and texts, with a trend of decreasing budget allocation from marketers.

Short-form video content has set off a market boom. Influencer advertising revenue is growing rapidly, making it a key target for advertisers. Red, a lifestyle sharing platform, is increasingly popular among advertisers for its fan value.

Change +119%

Change +141%

Red, as a lifestyle sharing platform, the fan value of the platform is increasingly being recognized by advertisers.

Bilibili has gained popularity from advertisers for its two core strategies – refined and IP-based content. The platform also boasts high involvement and viewer loyalty. *Change compared to 2019

Overall, the advantages of WeChat and Sina Weibo are gradually diminishing, with a more pronounced decline for Weibo, which has seen reduced investment by a majority of advertisers. On a deeper level, this phenomenon is a clear reflection of the redistribution of traffic on social platforms and the imbalance of social dynamics. With Weibo’s gradual decline in popularity, this trend has been accompanied by the rise of more segmented and relatively niche social platforms such as Red and Bilibili.

Source: WBY 2020 KOL Social Media Advertising Placement Analysis Report

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China KOL Market Analysis Report

Features of Major Social Platforms for KOL Marketing In terms of content, each platform has different user reach and content forms depending on its content positioning, user characteristics and history, therefore the final commercialization approaches are vastly different. For marketers, accurate insight and the appropriate combination of platform touch-points are essential to creating a full-chain strategy.

• • •

Platform Features Younger users Strong content distribution High interaction

User Touchpoints

• Ad spots • Hot search, discovery page, and comment section topics

• News feed ads • Search box default terms Platform Content

• Celebrity endorsement • Brand account • KOL placement

Conversions

• •

Brand account followers/community Brand external links

• • •

Platform Features

• • •

Network of acquaintances Precise follower targeting Wide range of content

User Touchpoints

• Targeted promotional articles to followers • Moment sharing • Public accounts placement • Ads on public accounts

Platform Content

• Brand public accounts /channels • KOL public accounts/channels

Conversions

• Brand account followers/community • Brand mini programs and stores • External links

Platform Features More female users Strong sharing attribute Endorsement

User Touchpoints

• News feed ads • Splash ads • Search ads • Hot topics • Featured topics • Keyword search

Platform content

• Notes, images, videos • Celebrity PUGC, KOL/ KOC, UGC,corporate brand account

Notes sharing Product review Community interaction Live streaming

Conversions

• Brand stores • Physical stores • External links • Brand account followers/community

• • •

Platform Features High user loyalty Large user base Strong content distribution

User Touchpoints

• Splash ads • News feed ads • Traffic tools • DOU+

• • •

Platform Features

User Touchpoints

• Splash ads • News feed ads • Traffic tools • Kuaishou challenge

Platform Content • Short video • Live streaming • Brand channel • Brand homepage

Platform Content

Conversions

Conversions

• Douyin stores • External links

• • •

Strong entertaining attributes Multiple content forms Strong content distribution

• Short video • Live streaming • Brand channel • Brand homepage • Kuaishou stores • External links

Platform Features Young users Pop-up comment Wide range of content

User Touchpoints

• • •

Browse ads In-stream ads Community interactive ads

Platform Content

• • •

PUGV content co-creation Brand channel Official OGV content cooperation

Platform Features

•

New product day (online new product release)

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DRIVING TRANSFORMATION FOR MARKETERS & THEIR AGENCIES

KOL Strategic Classification The term KOL is usually divided into Top Tier, Vertical and KOC users for easier understanding and management. The increasing complexity of the market and social media requires marketers to produce a more refined KOL marketing strategy. Therefore, marketers can choose suitable opinion leaders for cooperation according to their own communication purposes, based on the different identities, affiliations, and labels of each platform’s opinion leaders.

Identity Celebrities

Top Tier Large following and the ability to attract enormous attention and traffic, such as celebrities, socialites, and famous bloggers

Socialites

Famous bloggers

Promotion goal Brand building

Sales growth

Affiliation Vertical KOLs

Individual

Highly influential in specific fields and more loyal followers

MCN

Tags

In-depth Users (KOC) Smaller audience, more authentic content; most content is about product trials and evaluations

Beauty

Automotive

Daily life

Video games

Food

Other

Platforms E-commerce platforms

Social platforms

Live streaming

OVERVIEW OF TYPICAL KOL MARKETING ROADMAP BY TIERS ADOPTED

BY MATURE BRANDS Based on strategic classification, marketers are adopting a more strategic combination of KOL placements to generate different levels of brand influence, product recommendation and commercial conversion power for different placements.

KOL Strength by Category

Overview of Mature Brands’ KOL Portfolio Placement Model by Category Matrix

Influence

Follower accuracy

Marketing campaign key milestone (Big Day)

Influence

Deepen awareness at the middle tier

Building awareness at the top tier

Top tier KOL

Cost-effectiveness

Professionalism

Top+Mid tier KOL

KOC

1

2

3

4

5

6

Test the effectiveness of seeds

Leverage the channels in the top to build brand influence

Deeper seeding by influencers

Middle KOL user reviews build wordof-mouth reputation

Further develop word-of-mouth strategy

Encourage usergenerated review to enhance results

Source: WBY

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Trigger conversion at the bottom tier

China KOL Market Analysis Report

Number of Commercialized KOLs In terms of the number of commercializable accounts, Douyin, Weibo and WeChat have far more commercializable account data than the other three platforms.

KOL Tier: Define the KOL level based on the number of followers on each platform

Number of Potential Commercialized Accounts by Platform 238,435

Douyin

Weibo Tier 1: ≥5,000,000 Tier 2: ≥1,000,000, <5,000,000 Tier 3: ≥100,000, <1,000,000

195,458

Weibo

144,926

WeChat

WeChat Tier 1: ≥2,000,000 Tier 2: ≥500,000, <2,000,000 Tier 3: ≥30,000, <500,000

64,337 Kuaishou

24,603

Red Tier 1: ≥500,000 Tier 2: ≥50,000, <500,000 Tier 3: ≥10,000, <50,000

Douyin/Kuaishou Tier 1: ≥5,000,000 Tier 2: ≥1,000,000, <5,000,000 Tier 3: ≥100,000, <1,000,000

Red

Bilibili

9,788

Source: WBY KOL Database for Weibo and WeChat

Bilibili Tier 1: ≥1,000,000 Tier 2: ≥100,000, <1,000,000 Tier 3: ≥30,000, <100,000

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China KOL Market Analysis Report

KOL Marketing Value Chain is Seeing Further Complexity With the diversification of social media content and platforms, the continued explosive growth of the online influencer economy, the gradual rise of commercialized platforms and the enrichment of business chains have led to more diversified players in each link of the capital chain. Therefore, the marketing spending capital chain has also produced more diversified scenarios, and the players in each link are also accelerating cross-border competition.

Typical Modes for Agents to Place Orders Buyer

Intermediaries

Trading platform Institutional KOL negotiation and purchase (no commercialized platforms or weak commercialized platforms)

Marketing Agents

Marketer

Place orders

Institutional KOL negotiation and purchase (commercialized and mature platforms)

Individual KOL purchase (commercialized and mature platforms)

KOL Buying Platform

KOC negotiation and purchase

Content provider

Non-reported content

MCN

Institutional KOL

Reported content

Social Media Commercialization Platform

Order placement and control

Non-reported content

Channel companies

Individual KOLs place orders and payment

Non-reported content

KOL agency

Management and settlement

Individual KOL Intermediary negotiation channel company and payment

Recruiting, communication and payment

KOC

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China KOL Market Analysis Report

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ABOUT US R3’s KOL Consultancy Helping Marketers With Industry Challenges As a unique independent marketing consultancy in China, R3 was established in China in 2003.

We have been assisting marketers across 10+ industries to improve the effectiveness of their marketing investments and have spent 15+ years, accumulating deep experience and rich firsthand data.

Marketing Focus

Challenge

?

Strategy

?

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Execution

?

Key Focus Compliance

?

Resources

?

Purchasing

R3 CONSULTANCY

‘Am I working with the right influencers?’

‘How am I doing compared to my competitors?’

PERFORMANCE 1 KOL BENCHMARKING

‘Did I pay a competitive fee?

‘Did I get a fair price?’

2 KOL COST BENCHMARKING

‘Did I get what I paid for?’

‘How about KOL performance quality?’

3 KPI VERIFICATION

‘Did the agency handle my finances appropriately?’

BUYING & FINANCIAL 4 KOL COMPLIANCE AUDIT

‘Was the working process efficient and effective?’

‘Are the agencies properly managed to minimize risks?’

MODEL AND PROCESS 5 BUYING CONSULTANCY

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DRIVING TRANSFORMATION FOR MARKETERS & THEIR AGENCIES

WBY - Data-driven Short Video KOL Advertising Platform Provide Marketers End-to-end KOL Advertising Services Relying on Big Data

Before

During

Industry and User Analysis

Product Positioning

Brand Data

Purchase Intention Analysis

Precise Selection

Personalization

Follower Data

Product Attributes Analysis

Audience Features Filtering

Customized Tagging

KOL Interaction Data

Brand Image Analysis

Account Type Filtering

Account Precise Tagging

Advertising Transaction Data

Marketing Environment Analysis

Content Keywords Filtering

Statistics of Performance

Platform Data

Marketing Topic Analysis

Hotness Filtering

Account Usage Reference

Data and IT-based KOL Account Selection

Strategy Development and Budget Efficiency Improvement

Target analysis based on different marketing objectives, such as exposure, endorsement, and conversion.

Select the most effective delivery model.

After Systematic Rapid Triggering

Optimization

Platform portfolio strategy

Flash order placing

Effectiveness Analysis

Resource integration strategy

Standardized and efficient communication

Attribution of the Effectiveness

Content strategy

Order progress inquiry

Data mining and strategy optimization

Communication strategy

Confirmation of results (manual and systematic)

Input of Database

Effectiveness Data

Industry Placement Analysis

50% mobile subscriber coverage

1 million+ social media KOL pool

1000+ brands

Industry-leading data mining capabilities and marketing data application scenarios

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15000+ industry data tags

10+ e-commerce conversion correlation data

150 million+ accumulated views on short video from KOLs

KOL precise matching exceeds the industry average by 3 times

Placement strategy model polished through 6 million project placements under mainstream demand

Improve placement success rate and reduce inefficient placement by more than 50%

Standardized Over 90% positive process and feedback from optimization users system with leading international brands

Average time to placement cut by more than 80%

30% of customer budget is regularly analyzed and optimized

China KOL Market Analysis Report

contact US

Data-driven short video KOL trading platform. With the mission of ‘Technology makes the communication of new media easier’, relying on the Taiwan’s data and AI intelligent marketing technology solve the difficult and accurate delivery of social media and short video for advertisers. Problems such as difficulty, efficiency, ROI, etc., provide one-stop KOL resource purchasing services, social data services, and social media Communication strategy service. Previously, the platform hosted more than 1 million celebrity KOLs, covering Douyin, Kuaishou, Bilibili, Red, 25+ mainstream social platforms such as Weibo, WeChat, WeChat Video, Zhihu, and YiLive. Services include Procter & Gamble, Estee Lauder, 2000+ domestic and international brands such as JD.com, Mengniu, Yili, etc., help FIT8, Genki Forest, HFP, Bananai, Little Dream Garden and other 500+ new consumer brands to achieve explosive creation. www.weiboyi.com

Since R3 was established ,we’ve worked with more than one hundred companies on global, regional and local assignments to drive efficiency and effectiveness. We have talent based in the US, Asia Pacific and Europe and partners in LATAM and Africa. Through global work for Samsung, Coca-Cola, Johnson & Johnson, Visa, Unilever, and others, we have developed robust benchmarks and process targets for more than 70 countries. www.three.com

North America

Latin America

Europe

New York

São Paulo

London

79 Madison Ave 8th Floor New York, NY 10016 T +1 646 416 8088

Rua Jerônimo da Veiga 428 – conjunto 21 São Paulo, Brazil T +55 11 3071 0678

Fora 35-41 Folgate Street E1 6BX London W1W 7FA T +44 20 7998 9588

Velazquez 24 3 izd Madrid 28001 T +34 91 702 1113

Beijing

Shanghai

Hong Kong

Singapore

A 1801, Chaowai SOHO No.6 B Chaowai Street Chaoyang District Beijing 100020, China T +8610 5900 4733 F +8610 5900 4732

2E, Apollo Building 1440 Yan’an Road Jing An District Shanghai 200040, China T +8621 6212 2310

23/F, One Island East 18 Westlands Road Hong Kong T +852 3750 7980

1 Keong Saik Road Singapore 089109 T +65 6805 4050

Madrid

Asia Pacific

Sydney Level 26, 1 Bligh Street Sydney, NSW 2000

Social Media facebook.com/r3worldwide Facebook

weibo.com/r3china Weibo

twitter.com/R3WW Twitter

linkedin.com/company/r3 LinkedIn

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