KOLs, better known as Key Opinion Leaders, also as Wanghong in Chinese or Influencer in the west, are what consumers are gravitating towards in hopes to filter the clutter that digital advertising has created, which is a mainstay of Chinese media and marketing strategy.
With the growth of the KOL marketing, the costs of the per KOL has a high-speed growth. WeChat KOLs still are the most expensive, in 2019, a top KOL charges about 700 thousand yuan for a WeChat output; the growing platform LRB(Little Red Book) KOLs are currently the cheapest, a top LRB KOL charges 40K-100K for a campaign.
Single KOL publication quote range of different levels in different platform in 2019
Why KOL’s quote is becoming more and more expensive? Is the market demand really such a big driver?
The answer is, besides the growing market demand, the MCN pushes the increase of KOLs quotes.
MCN, Multi-Channel Network, appeared in the US in around 2013 for supporting YouTubers. In China, MCN plays an important role in managing KOLs in all main social media platforms.
According to the “2020 Chinese MCN Industry Development Research White Paper”released by research firm Topklout, there were 14,500 MCNs in China in 2019, an increase of more than 150% compared with 2018, and the number of MCN institutions in 2019 exceeded the sum of 2015-2018. It’s forecasted that, the number of MCN will be up to 28,000 in 2020.
The number of MCN institutions in China is expected to reach 28,000 by 2020
The number of KOLs that MCNs own is polarized, 17.9% of MCNs own less than 10 KOLs, most of these KOLs are top ones focusing on a one or two certain industries. Among 10 top KOLs, nearly 8 of them have joined MCN, the other 2 have their own company. 53.9% of MCNs own more than 100 KOLs, 5.1% of MCNs own more than 1000 KOLs, including KOCs covering several industries.
Changes in the distribution of MCN signed accounts in 2019
Why these KOLs or KOCs join into an MCN? What they can get from the MCNs?
Firstly, for top MCNs, they have capital support from China giant company, like Alibaba, Tecent, Sina, ByteDance. With the well-known company’s capital support, the MCNs can enlarge the scope of services and enhance service quality, since be more reliable for well-known brands and get more opportunities to cooperate with well-known brands, which means, for KOLs, they could directly get a chance from the MCN to work for a well-known brand rather than just making output and wait brands or ad agency to knock the door. This kind of cooperation will greatly increase the KOL’s online reputation and awareness, an astepping-stone to success.
MCN’s platform investment in 2019-2020
Secondly, MCN covers all main social media and industries, including WeChat, Weibo, Douyin, Bilibili, Little Red Book, Kuaishou and so on to provide all-platform-based KOL marketing service. For KOLs, means that, the MCN can help them to build up all-platform accounts, monitor the account performance in terms of follower-base and engagements, manage KOL’s reputation and awareness. Previously, KOLs only focus on no more than 2 platforms due to experience, time and energy limitation.
Average proportion of key operating platforms of MCN institutions
Thirdly, MCN and social media platforms are win-win partner, social media platforms offer specific support for MCN, including advance notice of events, traffic support, ad campaigns support, accounts management support, and so on.
Weibo adopts hierarchical cooperation mechanism to support MCN, divides into the MCN institutions strategic partners, comprehensive partnership and general partners, and has set up a special department to allocate specialist to be responsible for docking MCNs and providing support. In 2019, 34.1% of MCNs revenue is from the social media platforms subsidy.
MCN institutional revenue distribution in 2019
Last but not least, MCNs pack KOLs, teaching KOC how to become a KOL fastly in terms of personal style, TOV, content writing, images and videos shooting, interaction with followers and so on. MCN is an accelerated course for KOCs or people who want to be a KOL. MCNs know the specific features of each platform, know what kind of content is more popular, know how to make your own style to be different from others and attract followers.
What does it mean to marketers?
With all said, does it mean that KOL marketing for SMEs is heading to a dead end? The answer is not a definite no, however the truth is KOL market is getting more complex than ever. Marketers need to be extra careful when selecting KOL for cooperation. An alternative is to seek a reliable partner agency who can help identify suitable KOLs for the brand.
With years of experience in China KOL marketing, we have built up strategic partnerships with a number of MCNs, including top MCNs owning top KOLs, enable us to provide quicker and wider solutions for our clients on KOL marketing, in terms of increasing the brand’s online reputation, China social media account’s followers, campaign pushing, online or offline store revenue conversion. Please feel free to contact us if you need any further information.