China’s internet giant Tencent announced their “ONE TENCENT” plan yesterday at their 10th MIND conference on September 12th at the Shanghai World Expo Center. Celebrating the 10th year of their MIND conference, Tencent puts forward “ONE TENCENT” to integrate content, data, and technology.
This new concept aims to benefit advertisers to best make use of Tencent’s integrated online channels to achieve higher traffic. Online advertising is the main revenue source for Tencent, along with smartphone games and payments. According to Tencent earnings report on Q2 2017, online advertising revenue rose 55 percent to 10.15 billion RMB.
Under “ONE TENCENT”, Tencent will connect the Tencent’s internal resources together, and provide the integrated marketing solution to the customers. Tencent will simplify the marketing process, by integrating content, data, and technology into ONE TENCENT.
The business unit of Tencent that will be responsible for “ONE TENCENT” is OMG (Online Media Group), responsible for the operations and development of Tencent’s online media business, including QQ.com, Tencent Video, Tencent News and other core services.
TechNode interviewed vice president of Tencent, Steven Chang at the MIND conference.
So what is ONE TENCENT and how will advertisers benefit from this?
Ten years ago, Online Media Group was a news portal. That was an online advertising channel for clients and advertisers and it was very straightforward. Over the years, Tencent has developed a lot of products in multiple platforms including Tencent Video, Tencent news portal, games, QQ, and WeChat.
Our users are most interested in three parts: one part is the technology, the second part is the data, the third part is the content. Clients and marketers like to integrate this into what we call our ecosystem. Tencent can function as a sales channel for our clients.
We have a lot of content in different business units, we have been doing the work is to give customers the best solution. It is easy for us to connect the internal resources together, and then provide the integrated solution to the customer. We want to simplify this process and integrate content, data, and technology into ONE TENCENT.
If you have a marketing need, you can partner with us and we can provide marketing solution within the Tencent ecosystem. That way, we can concentrate on the content integration of data usage and the technology for the interaction mechanism together. That’s not restricted to one business group, but it’s all across Tencent business group.
How will Tencent’s technology (A.I., big data for example) help “ONE TENCENT”?
We developed AI lab last year April, and we have a big group of talents. Particularly, we asked Dr. Zhang Tong, a distinguished scientist to lead the team. Their team is focusing on AI, firstly facial recognition technology and secondly, voice recognition technology.
You need to have a scenario to apply AI technology, and we have a lot of use cases. The award winning user case this year was done by QQ. QQ ran a missing children advertising campaign based on facial recognition technology using our database of missing children. Once a child is missing, it’s not easy to find them after 72 hours. We used QQ groups in the different cities and used facial recognition to forecast how will they look like after the 10 years. The accuracy rate is 99.5%. This way, 286 cases of missing children have been pushed on QQ and 176 children have been found through the technology. We also used Tencent Cloud to host a lot of data.
This is how we did community marketing using the data. You can extend this use case into the commercial market. We have the data, cloud and AI technology for different marketing need, including commercial and community marketing.
How do you see China’s online media business to develop in the next 5 years?
Advertising growth in China is under 30% this year. If you look at the figure of every year, it’s been slowing down. In the next three to four years, the advertising revenue [of Tencent] will double. This speed is the highest in the market. What is contributing? It’s the usage of our media group. In Tencent video, we are getting better and more relevant content. Traffic on Tencent Video and Tencent News portal will grow. Advertising revenue will go up contributed by our users.
There are a lot of applications to provide the relevant content for the users. By analyzing user’s interest, we fit in the right content for them. Online business is related to marketing and advertising capability. We are working on AI to feed the relevant and interesting content for the user, and how advertisers can slot into the media to send out valid marketing messages.
On the other hand, on technology usage, Chinese users love interaction. Technology is helping them on enhancing the experience and interaction. Chinese are using the QR code and loves to scan them, but it is said QR code usage is declining in the Western world. Thanks to the popularity of WeChat, users love scanning QR code and use “Shake Shake” function, and it easily helps business interaction and enhance the interaction rate.
What will be the next content for Tencent, after text, image, and video?
Three buzzwords for last year in China were AR, VR and AI. AR and VR is a matter of the experience. It needs to be sophisticated and improved on time. We are the biggest game developer in the world, and we are studying these a lot.
Tencent has been using AR for client’s marketing solutions. For example, when a user scans a picture attached to a McDonald’s hamburger, AR holograms will appear just like how Snapchat works. As Chinese people love to try out these and share it. This AR technology is rather easy to apply.
As you need VR headset [to enjoy VR], it’s not so popular now. In terms of VR, we worked with BMW on launching a live concert. We try to meet different client needs and 360 broadcast events through our channels. Using the gear 3D all angle, we are applying VR to commercial solutions already. For example, for a fan who loves to watch NBA game on VR headset, relevant advertisement message and content will appear. Say, Nike products will appear on the newsfeed. These technologies are still popular. It will get some time to get sophisticated.
Does OMG have any plans to invest in another media company to develop Tencent’s online media business, just like how Alibaba purchased SCMP?
My understanding is that it depends on the market. We are pretty much interested in technology startup, game startup and instant messenger.