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1、International Journal of Marketing Studies; Vol. 8, No. 4; 2016 ISSN 1918-719X E-ISSN 1918-7203 Published by Canadian Center of Science and Education 37 Mobile Marketing in China: Can WeChat Turn Their New Advertising

2、 Strategy into a Sustainable Advantage? Diana B. Kontsevaia1 2016 39 WeChat’s marketing strategy will be successful only if they continue to provide utility to their users. If they are able to continually innovate for

3、their market, then the mobile ads entry is likely to be profitable. 3. Differentiation and Revenue According to Juniper Research, it will be a struggle for mobile messaging companies to sustain revenue, despite growin

4、g traffic (Juniper Research, 2015). Many predictions have been made that argue that just because traffic is going to increase, so will the revenue (e.g., Su-fang et al., 2016). Juniper shows, however, that this is not

5、necessarily the case. According to their research, the revenue generated from each message sent over apps similar to those of WeChat will be less than 1% of what will be generated from SMS and MMS (Juniper Research, 20

6、15). They predict that, despite the doubling of mobile traffic, free-messaging platforms will struggle to turn that traffic into revenue, even for advertising-enabled platforms. In light of possible stagnation of revenu

7、e from mobile messaging platforms, will a mobile marketing strategy hurt WeChat’s revenue by weakening its focus on users? First, let’s examine other companies which have been successful with native advertising, and t

8、heir future strategies. 3.1 Facebook: Why Mobile Needs to Differentiate Facebook started out as a single social website based in the United States and has since expanded its universe to include a variety of apps such

9、as WhatsApp, a text communications app, Instagram, a photo sharing app, and Messenger, Facebook’s own text messaging app. Facebook’s biggest challenge in an immensely competitive space is to ensure that their users sta

10、y engaged with their universe. Acquisition of apps such as WhatsApp and Instagram was a way to ensure that Facebook gets access to a variety of user data, even when users are not directly connected to Facebook (Johnson

11、, 2016). Of course, Facebook needs a lot of data to sustain their main source of revenue: native advertising. Facebook began using native advertising in 2011. While it did not exactly invent the practice, Facebook is t

12、he one that perfected it, by giving businesses access to an unprecedented product—a social-media platform that revolutionized communication, and thus, became ingrained and entrenched in the world’s mind. Facebook ads

13、work on a pay-per-click or pay-per-impression basis, and vary in price, depending on the type of audience being targeted. Many businesses jumped on the opportunity to not only connect with customers using their social

14、profiles or “pages,” but also to directly impress upon a tailored audience. Indeed, Facebook remains one of the platforms with the most detailed targeting options available. Despite Facebook’s using their community as

15、their main product, they have been very successful in remaining the number one social-media platform and have steadily begun their migration to mobile. In 2014, Facebook’s Messenger was the number one messenger accesse

16、d per month in the USA, followed by Google+, then SnapChat, and fourth being Facebook-owned Instagram (Kokalitcheva, 2015). However, there are more changes coming. In the fast world of mobile advertising, it is no long

17、er effective to rely on users simply logging in onto a network. People have to be engaged; otherwise there is no utility for them in using an application. That is why, in recent years, Facebook has put a lot of focus o

18、n developing its messaging platform into an all-around communications platform. Its latest challenge is to integrate services and eventually, payments, to ensure that users can derive continued benefit (Gottfried, 2013

19、). While diversification of its product may seem natural, it also comes at a time when Facebook posted drops in advertising revenues (Johnson, 2016). The revenue drop suggests that monetizing ads might no longer be eno

20、ugh to sustain growth in the long run, and that other business models might be necessary. The drop in revenues and differentiations supports Juniper Research’s findings that user growth does not always equal revenue gr

21、owth, despite the disbelief it has received in the literature. 3.2 Revenue from New Markets Even if Juniper Research is wrong and the text messaging business will continue to grow at the current pace, turning traffic

22、into revenue, it is not apparent how WeChat could replicate the same success as Facebook. Recently, Facebook’s ad revenue came mainly from foreign countries, rather than from inside its “home” country, the United State

23、s (Gottfried, 2013). That is primarily because people in the U.S. have likely become desensitized to social ads, if not leaving the platform altogether. If WeChat’s user base becomes similarly desensitized, expansion i

24、nto foreign markets will prove very difficult, because 93% of its operations is concentrated in the Chinese Mainland. They have a small presence in the U.S., Hong Kong, Europe and other locations, but as noted, these m

25、arkets account for only about 7% of their influence (Marketline, 2013). While WeChat can spend resources at dominating other local markets, it is unlikely that they will be able to replace the competition already withi