Just as small startups are disrupting traditional companies, individual online celebrities are changing the advertising market. It’s not dominated by a big entertainment company who owns thousands of top stars, but an individual with a strong talent can also convince consumers to open their wallets.
Over the past few years, Key Opinion Leaders (KOL, 网红 wǎnghóng in Chinese) or online influencers, have successfully dominated Chinese social media platforms like Weibo, WeChat and live streaming apps. Overseas companies expanding to the Middle Kingdom are now using these KOLs to drive more traffic and raise brand awareness. According to the 2017 Wanghong Career Report (in Chinese) released last month, 54% of the new university graduates polled want to become a KOL.
Overseas brands and companies rely on KOL marketing to enter China market because they are effective. According to Elijah Whaley, CMO of PARKLU, the average engagement results for KOL campaigns are six times higher than brand campaigns, and three times higher than brands’ own sales campaigns. KOLs are paid to create original content and then amplify that content on their own social media accounts.
PARKLU is a technology platform that provides social media tools for brands. After identifying brands’ needs, they suggest 15 or more KOLs to brands through their recommendation engine.
He shared with us three new trends in KOL marketing.
1. Short videos are becoming more important as a format for KOL marketing
PARKLU is a curated, closed platform. Only those who meet their standards can join PARKLU’s KOL pool. To be a KOL on PARKLU, minimum engagement followers of an influencer should be 50,000 followers for Weibo, and 5,000 reads per publication on WeChat.
“We prefer content creators who make original content,” said Whaley. “There’s still Meipai (美拍) and Yizhibo, live-streaming platforms, but Musical.ly and Douyin (抖音 aka Tik Tok in English) are up-coming apps for KOLs.”
In fact, short video platforms showed a dramatic increase last year thanks to younger user groups, while the time spent on live streaming stayed flat. In December 2017, Chinese users spent 6,149 million hours on short videos, while spending 881 million hours on live streaming.
2. KOLs are now building their own brands
“[B]rands don’t have an emotional connection with social media followers. They don’t have strong opinions or feelings. Brands are inhuman. It’s not a human to human interaction,” said Whaley.
For a longterm strategy, KOLs are building brands and are trying to monetize their followers now by selling their product on Weibo or other e-commerce sites. “KOLs are changing the fashion industry by creating brands. That’s also one way they monetize themselves” said Whaley.
An easy option for KOLs to help monetize is their beauty, and their fashion. Elijah and his girlfriend Melilim Fu, who happens to be a top makeup artist started a brand Melilim Fu and launched a makeup product Fayeyelash.
“Last December we broke even in the first couple days of sales. It’s about how you run your brand and connect with your fans,” said Melilim Fu.
Shanghai-based fashion KOLs AVA & NIKKI opened their Taobao clothes shop, selling their apparel on ANUZA on JD.com and Kuiben8. Some KOLs are making their own cosmetic brands, promoting those products on their WeChat Moments and selling those products through WeChat, either one-on-one or through group chat rooms. With the help of “Weishang”—a WeChat feature that allows users to sell goods and services to their contacts—a top KOL can make 600,000 RMB (~$86,000) a month through cosmetic sales. However, Chinese microblogging platform Weibo has been aware of too many commercial activities run by KOLs, and released its rules to regulate KOL advertising on their Weibo accounts.
KOLs also no longer stand solely in the beauty sector. As Chinese dominant smartphone users-post 80s generation and post 90s generation-age, get married and build family, and care more about lifestyle, and travel, key opinion leaders for some other sectors emerged, including parenting, fitness and health, pet, home decoration, lifestyle, and travel.
“As China’s income levels increase, they [consumers] care more about their bodies. Healtchare, fitness, and health KOLs will become more and more popular,” said Whaley.
3. KOLs are educators and entertainers, rather than static media
“One challenge is the lack of expertise and experience of those marketers who work at brands,” said Whaley.
Brands are used to marketing using stagnant media such as TV, newspaper, online search, and “traditional” social media. KOL and influencer marketing is a fairly new concept to them, and these marketers don’t necessarily possess the required skills.
“They think if they invest money into KOL marketing, all they need to do is crank the wheel and more money will come out the other side. This is not programmatic advertising. KOLs are first and foremost people,” he said.
In 2017, successful KOL campaigns had a lot of engagement from the brands themselves, working with KOLs that reflected the brands’ values. After Chinese fashion blogger Mr. Bags’ recent collaboration with Givenchy, he gave his followers access to buy his exclusive Valentine’s Day edition Givenchy “Mini Horizon” handbags. He reported that 80 handbags were sold out in 12 minutes. On top of that, Victoria’s Secret also invited fashion blogger gogoboi to their Victoria’s Secret Fashion Show. The KOL wrote a detailed article about this year’s show, attracting more than 100,000 views.
“Brands commonly have one objective and that’s to sell. But KOLs are not salespeople, they are educators and entertainers that have learned the best way to influence people is to offer value first via content and ask very little in return,” said Whaley. “If brands do not listen to the feedback from the KOLs they are working with, they increase their likelihood of failure. They should not say “do this”, but ask “what should we do”.”