Why Tencent’s deals with Publicis and WPP are good for global advertisers

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The recent partnerships between Publicis, WPP and Tencent shows the Chinese internet giant is serious about moving into the global spotlight and maintaining a qualitative approach to its advertising offerings.

Earlier this month, Tencent and Publicis Groupe announced a strategic partnership at Viva Technology Paris.

The deal is being pitched as a first-of-its-kind collaboration between a global advertising group and Tencent’s entire stable of products, which includes China’s most popular social commerce app, WeChat (with 762 million monthly active users). It is also the first partnership to incorporate Publicis Groupe’s three solution hubs, Publicis Media, Publicis Communications and Publicis.Sapient.

The deal is important because it puts Tencent on the global stage and gives Publicis clients premium access to the Chinese conglomerate’s bountiful cache of consumer data.

There are three pillars to the deal:

  • Drugstore: An incubation hub to curate, invest in and cultivate start-ups of the future, especially around data, adtech and VR and AR enabled platforms.
  • Data: Tencent will give Publicis Groupe priority access to its vast and rich online behavioral data.This will be implemented by establishing data verification and connection practices between Tencent DMP to Publicis Groupe DMP and insights platform enabling a richer view of consumers. This in turn will benefit Publicis Groupe clients with improved programmatic offerings, cross-screen planning capabilities and conversion performance.
  • Content: Partnering for the co-creation and co-investment of web native content for new content opportunities and content models.

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*Image: Maurice Lévy, chairman and chief executive officer, Publicis Groupe and SY Lau, senior executive vice president, Tencent and president, Online Media Group, scanning a WeChat QR code to officially mark the partnership. (Tencent / Publicis Groupe)

Thomas Graziani, co-founder, WalktheChat, says the deal is part of Tencent’s ongoing strategy for a very qualitative approach to targeted marketing.

He compares Tencent with Facebook. The Silicon Valley tech giant drives more than 80% of its revenue from mobile ads, while for Tencent, it is less than 20%. Facebook boasts around 2 million advertisers against a few hundred on WeChat Moments.

He says Tencent is culturally different from Facebook. “Tencent’s target has always been to drive money from services rather than ads, and it is very careful in the way it advertises to users,” Graziani says.

Facebook on the other hand is more sophisticated in its use of retargeting and lookalike targeting. The Publicis deal allows Tencent to continue its very qualitative approach to advertising, while benefitting from Publicis’ industry knowledge.

“It will help it to get closer to Facebook in terms of ad efficiency while preserving user experience,” says Graziani.

The Publicis deal follows an MoU between Tencent and WPP for a ‘China Social Marketing Lab’ announced at Cannes Lions in June. The aim is to share technology, analytics and creative input to build social ideas and campaigns for Tencent’s QQ and WeChat platforms.

Mark Tanner, managing director, China Skinny, says the deals are good wins for all parties involved, but the devil will be in the detail.

“Tencent has barely scratched the surface with the marketing potential of WeChat – both in how it utilizes big data and the omnipresent nature of the app. Tencent is primarily a tech company, so both WPP and Publicis could bring some heavy-hitting marketing nous to WeChat, which could lead to further world-leading innovations on the platform, particularly in the advertising space,” he says.

Tencent is traditionally very strategic in the way it launches new advertising models – often beginning with large MNC’s, as it did when it piloted ads on WeChat Moments feeds in January 2015. This type of strategy goes hand in hand with WPP’s and Publicis’ client base, says Tanner.

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“As most global brands are looking to create smarter, more targeted marketing in China, WPP and Publicis really need to see what they can do with WeChat as it is one of the, (if not the) most influential communication channels in the market,” he adds.

Tencent was number 11 on Millward Brown’s 2016 BrandZ Top 100 Most Valuable Global Brands ranking report, and a centerpiece of Mary Meeker’s 2016 Internet Trends Report. However it remains relatively unknown outside of China. These deals with Publicis and WPP have the potential to introduce Tencent’s assets to a much wider global community of brands.

“This collaboration will give brands and organizations around the world a better understanding of China’s unique and dynamic mobile internet development, while creating huge business opportunities associated with this new market,” said SY Lau, senior executive vice president, Tencent and president, Online Media Group in a press release.

His comments were echoed by Maurice Lévy, chairman and chief executive officer, Publicis Groupe.

“China continues to lead the world in advertising growth especially in digital and mobile and we increasingly see new ideas and technology that leapfrog the West,” Lévy said.

*Do you want to learn more about Tencent, and the advertising and marketing opportunities for brands on WeChat? Join us at ClickZ Live Shanghai on September 19,20 & 21 to have all your queries addressed. See you there!

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