China’s WeChat App Scripts Plan to Become Ad Hub

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By Kalyan Kumar | July 17, 2014 1:36 PM EST

The new trend of popular messaging apps trying to position themselves as advertising platforms is catching up. WeChat, the popular messaging app in China is making such an effort by exploring way to become an advertising platform, reports Wall Street Journal.

New Service

Recently Tencent Holdings, promoter of WeChat, launched a new service in China for companies to place ads on the official pages of member companies. But the Ad hosting company must have more than 100,000 followers. The fees to be paid by the advertising companies will be shared by Tencent and the companies hosting the ads. WeChat claims 400 million active users in China. With the new advertising services, Tencent is hoping to make some good money.

Business Models

Messaging apps such as WeChat, WhatsApp and Japan's Line are also showing up the potency to become major advertising platforms such as Facebook and Google.

We Chat Service

In the case of WeChat, the service is slightly different and ads are not distributed as instant messages. They are made to appear at the bottom of corporate pages and Advertisers get the option to plan their target viewers based on gender, age and location. Acting on these parameters, Tencent's back-end will match advertisers and decide the corporate pages to which the ads can be hosted.

Disruption of Personal Space

But here the challenge is that consumers are required to follow corporate accounts and view their pages on WeChat. Forrester Research analyst Thomas Husson expresses the concern that the scope for marketing through messaging apps can be limited. People will not let brands to invade on their intimate turf. The priority will be for personal interactions and connecting with brands is no urgent thing out there.

Tools for Communication

However, WeChat and other messaging apps are keen on monetizing over the high traffic by integrating ads into tools that augment intimate, uninterrupted communications.

Revenue Streams

That Ads are going to be the route of revenue for app makers is becoming clear. Already WeChat, Line and Kakao have integrated mobile games in their services.

Forrester analyst Husson is categorical that Messaging apps are not going to be mere free ways to communicate. In the long run, many of these apps may turn into portals with games and location-based services including online shopping in a single platform.

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