WeChat ads: how does it work and why it changes everything

In a move who surprised many, WeChat introduced ads to their public platforms. How does it work and why is it such an innovative move?

WeChat ads: how does it work?

Public accounts on WeChat are similar to very advanced “Facebook pages”: accounts operated by medias or companies for promotion or service purpose.

There are two kind of public accounts which are concerned by WeChat ads:
– Public accounts which have been verified (usually company accounts) can buy ads to be displayed on other accounts
– Public accounts which exceed 100,000 followers can display ads

So advertisers get to see a funnel view of how their ads perform:

And ad “displayers” see a little message appear at the bottom of each of their posts:

That’s the first way in which WeChat ads differ from other (and Western) social networks: You must opt-in before WeChat starts displaying ads on your account. So you won’t see ads pop up everywhere in your WeChat profile anytime soon.

But why would people choose to have ads displayed on their acounts? That’s where the second major innovation lies: public accounts are also paid for displaying ads.

So if your page is popular and generates a lot of clicks, you will also benefit from this popularity by earning part of the revenue invested by advertisers. It is unclear at this stage how the money will be split between Tencent and the account displaying the ad.

Why is it smart?

This strategy is smart in several ways:
– It still preserves the user “moments” page: unlike Facebook, you will not see ads displayed directly around your friend personal updates.
– Tencent makes it look like a pro-active decision from accounts rather than something being enforced to generate more profit.
– Distributing part of the revenue to the accounts displaying the ads will create a virtuous circle of generating more quality content and thus making WeChat more attractive as a platform

What does it say about WeChat?

This move also says a lot about the next steps of WeChat in terms of business model. At a time when many people are unclear about Tencent’s exact plans to generate money from its most popular platform, we can see a lot of interesting experiments happening: e-commerce, electronic wallet, advertising, etc…

All of these tactical moves show WeChat’s interest in trying new approaches in a way which is often highly innovative. Yet the platform remains consistent and the amount of features far from overwhelming for users.

All in all, WeChat approach to advertising is rather reassuring for the future of the company: it remains perfectly in line with its commitment to innovation, preserving user experience, and aiming at a higher profitability