Editor’s note: This was contributed by Steve Yang, co-founder and Marketing Director for Grizzly Panda Media, a digital marketing agency helping foreign companies establish themselves in China.

According to Forbes, 53% of marketers intend to adopt AI over the next two years. The big data trend is allowing companies to have access to huge amounts of customer data, giving their marketing teams a better, smarter ways to touch their customer base.

In China, this trend is led by AI news app called Jinri Toutiao and it has already built quite a reputation for itself in just under 5 years.

What exactly is Jinri Toutiao?

Toutiao (头条), or Jinri Toutiao (今日头条), literally translates to “Today’s Headlines.” It is a news aggregation app in China founded and operated by Beijing ByteDance Technology in 2012. With its 80 million daily active users, Toutiao has rapidly become the most widely-used news aggregator in China and even one of the most widely-used mobile apps in China right up there with WeChat and Sina Weibo.

Naturally, the rapid adoption of this news aggregation app drew the attention of many investors. During Toutiao’s recent fundraising round, investors such as Sequoia Capital China and CCB International have valued the company at a whopping $20 billion.

On the surface, a valuation of $20 billion for a company just approaching it’s 5th year in operation might seem outrageous but with a close look, it actually seems quite reasonable.

Last year, research analyst company based in Shanghai had estimated Toutiao’s earning has reached RMB 6 billion ($869 million), with the majority of that coming from advertising. More significantly, this 6 billion yuan revenue last year was more than 5 times the earning of the previous year.

While Toutiao has not turned a profit yet, but in my mind, there are more than enough signs and signals for businesses and brands all across China to really start paying attention to this new app.

How users behave on Toutiao

“No two users’ feed lists are alike,” said Toutiao’s vice president Tina Zhao in an interview.

What makes Toutiao unique is that it has zero staff writers or editors. All of its content is curated with its complex AI algorithms. Unlike traditional news apps, Toutiao doesn’t just show the latest news. The app uses the latest machine learning technique to figure out what users are interested in, what they like to read, and then to find the most relevant content from all across the internet.

By the end of 2016, Toutiao’s 80 million daily active users spent an average of 76 minutes a day reading content and watching videos on its app, whereas Facebook reported an average of 50 minutes a day.

Image credit: Grizzly Panda Marketing
Image credit: Grizzly Panda Marketing

This makes Toutiao’s users extremely loyal. As any tech startup with just enough experience would understand, it isn’t about how many users you can get to signup for your platform; it is about how many of them you can keep and make them come back for more.

How will Toutiao affect your business in China

In the West, businesses and advertisers have recently started to shift their advertising dollars towards social media channels such as Instagram, Facebook, and Twitter.

The main reason behind this is that many of the social media channels have proven to drive better results at a cheaper cost. The trick, however, is that you must know your target audience fairly well, and truly create compelling advertisements for your target market.

One of the most popular trend this year is actually advertising on Facebook. What makes Facebook unique is its news feed, which in some way acts very much like Toutiao’s AI-enabled news feed.

The reason why advertisers and even many small businesses have begun to start paying for Facebook ads is that Facebook offers a wide variety of ad placement options and, most importantly, an extremely rich and powerful audience targeting function.

Image credit: Statista
Image credit: Statista

This is not to say that Toutiao is a cheap alternative. In fact, the minimum requirement to advertise on Toutiao is not low. However, because of its machine learning algorithm and the nature of the platform, Toutiao is able to offer a richer, more powerful audience targeting functionality similar to that of Facebook.

Currently, advertisers on Toutiao are able to target audience based on Audience gender, Audience age, Audience interest, Keywords, City/region, Time of day, Weather, Occupation, Phone carrier, Phone system, Phone brand, and Internet providers.

On top of that, Toutiao also offers 3 ways to purchase ads and 11 different ad formats, ranging from paying for the entire day all the way to application download.

Predictive Analytics

As a bonus, with AI and machine learning algorithms, businesses, brands, and marketers in China can use its large amount of data to determine future events with predictive analytics.

For those businesses that aren’t familiar with Predictive Analytics, it is an advanced way to use “big data” and analytics to make predictions of market trends and market behaviors. It uses a combination of machine learning, AI, statistical models, and the best human brains on the planet to find data correlations and process large data sets within minutes.

Many marketing leaders in large brands have already adopted AI in their marketing routine to be able to deliver the right message, via the right channel, to the right people, and at the right time.

News on Toutiao today can help marketers do more accurate predictions and identify a quality market, opportunities, and event potential leads for B2B businesses to ensure stronger brand positioning.

The Future

Toutiao is still in its infancy, with the underlying AI technology at the core of the app. There are still many uncertainties as competition in China gets fierce for AI news aggregation. Popular news websites such as Sina Weibo and 163.com are now building their own machine learning algorithms to curate content for their users based on browsing history.

But for now, we believe that Toutiao will and should play a strong role in any digital marketing strategies in China to reach their target audiences.

TechNode Guest Editors represent the best our community has to offer: insight and perspective on how technology is affecting business and culture in China

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