What is Toutiao?
Toutiao could well be touted as the ‘Buzz Feed of China’ although there are many fundamental differences in how they operate. Toutiao is to some degree a ‘news app’ or more specifically a ‘news aggregator’ which now boasts 260 million monthly active users (MAUs) and has been valued at $20 bn. It is owned by ByteDance that acts as a news aggregator. With and content receiving 4.2 billion views every day, it is considered the # 1 platform for content delivery.
Toutiao is therefore an excellent database of consumer information and one of the best Chinese apps for targeted advertising.
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The key to Toutiao’s success is Personalized Recommendation. Toutiao has even referred to itself as a ‘Recommendation Engine’. Its particularity is that it is integrated with artificial intelligence and machine learning software, which create a personalized newsfeed for each user. In this way, everyone sees what best suits the content they have interacted with in the past.
The App was founded in 2012 and in many ways has become one of the ‘tech unicorns’ in the China market with such a high valuation and strong user base.
Who uses this App?
- 85% of users are under 35;
- They have attended university and are graduated;
- They come from 1st and 2nd tier cities;
- They are richer than most of the Chinese.
Opportunities for brands
- Private publishers, official media, brands, and blog;
- Advertising revenue is shared with the creator of the content;
- No need to follow an account to see its contents: there are excellent exposure potential;
- Toutiao launched a new channel called Q&A, an open discussion community. Registered users can share their experiences and opinions in specific fields under questions and interact with other users. Toutiao then recommends answers to users in its news feed and Q&A channel.
- There are no distractions (no messages or social features)
Why such a high profile app?
Despite only 8 years of activity, Toutiao is growing incredibly fast, this is largely due to the APP being a pure mobile product that taps into China’s tenacity of mobile & mobile-optimized content.
The high valuation of the APP at $20 bn has created a huge buzz around the potential of this player in the Chinese market.
An advertising shift from “pull to push”
Active search engine research (PULL Info) will never be redundant on Baidu (China’s Google). Baidu still presides over 70% of the search engine market with a presence here still important in a serious marketing campaign.
However, Toutiao & other similar news apps are catering to the demand in China also for PUSH, which means content pushed to users based on their preferences, selected categories, and browsing history.
Toutiao with its algorithm to collate data is at the cutting edge of targeted pushed-based content and sets a precedent for stronger demand for this in China.
Advertisers benefit from targeted “push content”
News apps such as Toutiao have a wealth of data on users’ preferences for content, news, articles, and conversation topics. Users select specific categories based on preferences.
This is a powerful tool for advertising, simply because your ad can be pushed to a user’s feed, it also appears in-line with relevant news & entertainment content that is TAILORED to the end-user, this results in a more TARGETED ADVERTISING.
What are the main benefits?
- Pushed Ads to more targeted Users;
- Ads appear in-feed, they are therefore more qualified and newsworthy;
- There is a strong culture of clicking on ads on Toutiao
Ad content can be linked-to HTML5 contact forms for lead generation OR be used to drive traffic; it is a flexible opportunity with CPM (Cost Per 1000 Impressions) of between 20-25 RMB.
It is worth noting here that Toutiao is focusing on developing video ad content for in-feed marketing strategy, this could be interesting in terms of increase Click Through Rates, Engagement & Exposure time.
Not simply a news app, it is more an entertainment app
The key difference between Toutiao and the other Apps is that: 60% of content on the App is entertainment-based.
This is not a typical news product, rather a mobile reading & entertainment platform. These types of content (sometimes called ‘soft content’) can be appealing for brands if their products are in the lifestyle, FMCG, or entertainment spheres.
If your content is focused on ‘harder’ or more ‘intellectual/serious’ topics News Apps such as Tencent, Sina or Sohu News may well be a better choice.
Ensure you speak with an expert consultant on the best platforms for your business.
The highest engaged users base for advertising
Users of news aggregator Toutiao spent an average of 73.4 minutes on the app every day. Super app WeChat, known as Weixin on the mainland, engaged its users by a daily average of 60.6 minutes
Toutiao, therefore, engaged Chinese consumers longer than Tencent’s WeChat. More time equates to more exposure to paid content.
For marketing, the regular stream of recurring users lends itself to maximum exposure to content.
Toutiao embraces the Facebook model
Toutiao is akin in some ways to Facebook’s news feed and has embraced the Facebook model of advertising. That means exposure to content in line with ads and relevant to that content and to the users’ previous preferences/online behavior.
As for the FB news feed, it is more entertainingly rich than intellectually focused, however, this has allowed Toutiao to differentiate itself from other players in a very competitive space.
It is also interesting because Tencent’s WeChat, the largest network in the Middle Kingdom, has not adopted the Facebook model.
China is a fragmented market
Chinese users do not have a lot of time to spend on entertainment & news, it is hard to capture attention for a long time in the fast-paced, frenetic China.
Users now have fragmented time, they engage with apps while:
- Early Morning
- Commuting to Work
- Over Lunch/Dinner
- Before bed
Toutiao provides FRAGMENTED reading articles that fits effectively with a user’s daily schedule in China:
- A) Format – The format is shorter with short/bitesize chunks of news & entertainment
- B) Content – As discussed it is lighter focusing on; celebrities, food, lifestyle, humor.
Recommendations are very accurate
A USP of Toutiao is that it offers more content and is more accurate than traditional news apps for tailored content to the user (remember this also means tailored ads).
Even if an editor does not curate a platform like BuzzFeed content, the supply of content is endless and recommended according to your reading history, not by individuals.
It is an addictive process for the Chinese user as over time recommendations on the app become more targeted. The Algorithm has become more accurate in terms of tailored content, it’s a virtuous cycle with more users leading to better-targeted content.
Toutiao Offical Accounts
Toutiao has even developed Official Accounts for posting content/articles on the platform. They are reportedly achieving higher read rates than typical WeChat accounts, likely because Toutiao is not a closed network, users do not have to be connected first to view content from an Official Account.
The added bonus is that Toutiao is not a competitive arena for content yet (when compared to Weibo or WeChat).
This is an advantage for investing in a strong Toutiao reputation with strong evidence of further platform growth.
Besides the most common CPM (it is good to stimulate the brand awareness and brand engagement) and CPC (cost for click, it is good to stimulate conversions), Toutiao provides 4 innovative ways for the advertiser:
- oCPC(Optimized Cost per Click) is the same as CPC with paying per click, yet it additionally introduces an estimated conversion ratio based on audience behavior into its bidding model. The way advertisers benefit from it is that they can achieve the same conversion goal with less cost.
- oCPM(Optimized Cost per Millennium) runs on the same mechanism.
- CPA(Cost Per Acquisition) means advertisers pay only when the conversion(set by advertiser) is completed.
- CPV (Cost Per View) only supports video ads. It counts a view when the video ad has played for 10 seconds.
What is the future for Toutiao and advertising?
In short, it’s looking bright! With more targeted in-feed ads/DSP opportunities as well as a growing user base Toutiao remains a promising platform for ad budgets.
With a model more akin to Facebook it is logical that Toutiao will attempt to develop in this direction with a stronger news feed and monetization via ads (e.g video ad development).
Do you want to develop your strategy on Toutiao? Contact Gma.
We are a team of native digital experts based in Shanghai, we have a deep insight into this fascinating market and stay ahead of the curve. If you have a serious project for the Chinese market you can consider news app ads, contact us for a meeting with one of our consultants. We also work extensively in the following area’s;
- Baidu SEO/PPC
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