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Find here the Daxue Talks episode 28. Olivier Verot tackles the issue of running a very effective marketing campaign on Douyin. A lots of things need to be taken into consideration like the advertising method, the level of commission, negotiations KOLs in China, etc.

Full transcript below:

Oliver Verot: I’m Oliver Verot, the founder of Gentleman Marketing Agency (GMA). We are a digital marketing agency focused on performance and based in Shanghai.

Interviewer: Would you mind telling us more about CPS (cost per sales) on Douyin?

Oliver Verot: Today, Douyin is offering brands CPS campaign. CPS campaign is very interesting for brands because they can buy some traffic and can be paid by sales, so it could be between 6% to 10% of sales. Every time they make a sale, 6% to 10% will be directly given to Douyin. It means that in the past you had the cost per click, so you buy traffic, but you never know if your product video to sell, but with CPS, you buy it and you are sure that it works. If it doesn’t work, it means the campaign isn’t running. Today, not all the brands can do this, the requirement is very strict so I think only 80 brands per category, for example, cosmetic is 1 category, food is 1 category, so they are very selective. They want the brand are still used and quite known and they want the brand that has a Chinese business license and then they can run the company for them and basically pay them by cost per sales.

Interviewer: Is the level of commission standard or is it determined during the negotiations?

Oliver Verot: It’s a negotiation, it depends on the cost of the product and the category, so basically the more the brand is famous the more their power negotiation the more the commission can be lower, because for example, basically if you direct a lot of traffic to L’Oreal, L’Oreal is already famous so the conversion won’t be high, so L’Oreal will have the power to negotiate to make it lower but if it’s a new brand, basically they have almost no power of negotiation so the commission will be higher.

Interviewer: Do you have negotiations directly with KOLs or with Douyin?

Oliver Verot: Jointly with Douyin because Douyin has developed a loop band so it’s basically like a Facebook business manager and it’s an external platform for that either, so this is the place you upload the product you’re running your campaign, so by category and things they can give you the estimation of the cost per sales at the percentage. It’s actually very depends because after running a certain range of campaign you can then come back and renegotiate with Douyin to have something cheaper because your product convert very well and it’s a top sales, so they can give you better conditions of if not they will just delete your product and your category because they estimate that your product is not suitable for people.

Interviewer: Do you have anything else to share that may be new on Douyin or interesting to learn?

Oliver Verot: For me, what’s very interesting in Douyin is basically one of the smartest platform that I never see. So it’s roofing is beyond high and they really have the capacity to know your audience based not only about what you like and what you don’t like by the time you spend on the video and also according to the time and hour. So it’s really learning platforms and what’s good with this kind of platform is that they can identify to which people  point of interest, so the point of interest is for example, these guys and those guys, he likes sports, he likes food but they only like it on the weekend. They put a lot of stuff like this, so they correct kind of local audience and after when you advertise your products, you only advertise a product to the right people at the right time. I will give you a concrete example, I’m a Douyin user, so I can use Douyin when I was in the taxi and they will show me football things, something that I like. But when I’m at weekend with my kids, they will mainly show me video for kids like something funny, some cartoons, etc., and in the middle of that, they are able to target me toys for my kids, so I have to admit I’m extremely impressed as a marketer, so they are able to know what time I am, what kind of videos I like when I’m with my kinds and watching Douyin and show me this kind of game and if the game is very good like this in one cake that I can just buy it on Taobao and it costs like 30RMB, 50RMB, 70RMB, I’ll just pay because I think it’s cool and I’ll make and enjoy it. It’s an extremely powerful and advanced platform for me and I believe that it would be extremely powerful in the future.

Daxue Talks is a show powered by daxue consulting, a china-based strategic market research company founded in 2010! With Daxue Talks, you will stay up to date with all the latest business updates in China.