While Publicis Groupe and WPP talked about reducing their presence at the Cannes Lions festival, and Facebook and Google seemed less omnipresent this year, Tencent was all in at Cannes as China's internet giant extends its relationships with Western marketers.
SY Lau, who stepped up in March to a new role as chairman of Tencent Advertising and chairman of group marketing and global branding, talked to Ad Age in The Clubhouse, a glass-enclosed airy space that was Tencent's headquarters for the week on the first floor of the Palais overlooking the Croisette. (Tencent hosted China Day at Cannes, organized by the China Advertising Association with sessions featuring top execs like Glory Zhang, chief marketing officer of telecommunications group Huawei).
Educated in the U.S, Lau was one of the first traditional agency execs to be poached to bring advertising and marketing knowhow to an emerging internet business 11 years ago after running BBDO, Publicis and Dentsu Y&R in China. At Cannes, Lau hobnobbed with marketers, lunching with Luis di Como, Unilever's senior VP- global marketing, and dining with Asmity Dubey, chief marketing officer for L'Oreal China and Asia Pacific.
Tencent's Lau is invited to address worldwide boards of major marketers, Pepsi and Nestle have brought their boards of directors to China, and Lau said he is heading to Cincinnati in a few weeks to talk to Procter & Gamble at the invitation of Chief Brand Officer Marc Pritchard. "Everyone is interested in how digital is impacting consumers," he said.
When he talks to marketers, he shares the story of how Tencent came about, and transformed the industry, starting with the huge QQ messaging platform that has 861 million users and China's current hot app WeChat, which the average person in China uses for 90 minutes a day. Tencent is also the world's largest game publisher. It hasn't always been easy. Early on, "We had months of near-death experiences," he said. (Last month, Tencent posted a 47% jump in 2017 first quarter ad revenue to $900 million.)
Here are some points he shares:
In the largest mobile nation in the world, 95% of internet traffic in China happens on a mobile phone, but internet penetration is still only about 52% or 53%, he said.
Tencent and other Chinese internet companies like Alibaba are the world's biggest generators of data. "We'd love to do the same thing outside China," he said. "One way to do that is content. We livestreamed the NBA's 2017 Finals to 175 million people in China through Tencent video."
With numbers comes responsibility, he said. Tencent won its first Cannes Lions this year, a Cyber gold and bronze for "QQ Alert: Hope Never Dies." Similar to an Amber Alert in the U.S., QQ Alert not only tracks missing children—600,000 children are lost in China every year—but a Tencent program developed using Artificial Intelligence, facial recognition and an algorithm predicts what those missing children will look like as they get older, so the search can continue.
"Promote technology with warmth," he said. "If we want to make the world a better place, we need everyone to do a little." Consumers can join hundreds of philanthropic projects through Tencent, post information about them on their WeChat accounts, and see the total amount of money raised. Lau himself participates in funding digital media journals and the maintenance of the Great Wall's artifacts.
Chinese audiences are more positive about targeted advertising. "If we can use an algorithm and send ads to the right people at the right time, 70% [are positive about it], compared to just 15% internationally," he said. "Advertising should be content, and help you feel smart."
Finally, the three key drivers of innovation in China's digital economy will be AI, big data and cloud computing, he said.