Analysys Insight:
In 2016 Q3, China’s social media recorded an advertising and marketing revenue of RMB6.38 billion, up 17.7% quarter on quarter, shows the Quarterly Monitoring Report on China’s Social Media Advertising and Marketing Market 2016 Q3 published by Analysys.
In the overall market, Tencent and Weibo seized a market share of 53.4% and 29.6% respectively, totaling more than 80% in China’s social media advertising and marketing market and took the leading position with absolute advantages over rivals. Momo closely followed them, realized continuous growth of user base and viscosity through the live video service and still has the potential to further increase the market share. Baby Tree, and other vertical social media platforms strengthened the production of user generated contents to retain users and closely cooperated with e-commerce websites to strengthen the capacity to convert the user stream into cash. 

In the opinion of Analysis, the social media market should attract attention in the following areas in 2016 Q3:
I.  The Internet advertising supervision grew increasingly stringent, and the long tail market expanded at a faster speed
In September 2016, the State Administration for Industry and Commerce put in formal implementation the Interim Measures Regarding the Administration of Internet Advertising, which defines contents and extensions of Internet advertising and regulates legitimate rights and interests of consumers of Internet advertising activities. After the new policy came out, social media platforms must explicitly mark display advertisements, original advertisements and other promotion messages. Analysis thinks that in the short run, social media platforms will have to spend more money on the management of advertisement review, production, operation, launch and other activities, but in the long run, the long-term implementation will further improve the user experience and enhance values of platforms.
When it comes to advertising and marketing products, in August 2016, Tencent integrated its social advertising product resources, fused them with medium and long tail resources of China Post nationwide, and relied on the big data advantage of Tencent Social Ads to realize joint marketing and develop the market space. Besides, Tencent successively launched the original promotion page advertising and local promotion advertising. The former brings users with unique immersive watch experience with the information communication advantage of mobile terminal advertising, and the latter helps offline physical merchants to contact target users within service areas, thereby realizing the online steam diversion to the offshore cannel and satisfy merchants’ need to obtain users. In the opinion of Analysys, Tencent, as the bellwether in China’s social media advertising and marketing area, has continuously expanded advertising resources and forms, and provided more spaces of information communication with Wechat and other social platforms with large streams for brand owners. For another, it has cooperated with powerful channels with its advantages in Internet technologies and propel extensive penetration of Internet advertisements in the long-tail advertising market and discrete local market. 
II.   The social media market experienced natural selection, and vendors must adapt to changes and explore development patterns as the optimal choice
At the end of July 2016,, an old social website, was acquired by Sunwin Intelligent, which engages in game as the principal operation. went on the new third board in 2015, but was reduced to an ST company due to continuous loss. According to the 2016 interim report, the operating revenue of declined 9.73% in January to June 2016, and the 2016 Q2 financial report shows that had 35 million independent users in June 2016 compared to 45 million one year ago.
In the opinion of Analysys, the failure to go mobile in time and inadequate product innovation are the major reasons for user drainage and performance decline of social media platforms represented by, and In the context of the decline of the demographic dividend and quick diversion of user attention, social media platforms must continuously adapt to market changes, identify user demands to enlarge user scenarios and actively explore diverse business patterns. For example,, a typical representative of Chinese knowledge sharing platforms, maintained robust growth and shaped a powerful brand influence during the transition from the webpage end to the mobile end. Analysys’ monitoring data show that in September 2016, had 9,244,400 active users who used the website for 61,176,000 hours.
In December 2010, launched the webpage edition and adopted the invitational registration mechanism; in September 2011, released the mobile phone version; in March 2013, it opened public registration; in May 2013, it relied on continuous valuable contents of the platform to publish the information application Zhihu Daily; in 2014, it launched the page display advertising service; in October 2015, it launched the Dudu Daily, a content application; and in November 2015, received round C financing led by Tencent. In 2016, had more than 60 million registered users, and successfully launched Zhihu Live, Zhihu, Zhihu Bookstore, institution account and other new functions.
Analysys has found that has built access barriers in multiple aspects: First, it strictly controlled user quality at the early stage to focus on core seed users, maintained continuous generation of high-quality user generated contents on the basis of high-quality user groups and good discussion style in the forums, thereby shaping a unique brand image; Second, it continuously segmented content demands of different users and seized the social trend in time. It successively launched several mobile application products shaping a mighty product matrix, and enriched communication channels of community contents; Third, it took progressive steps as to the realization of commercial values. In 2014, it launched the display advertising service. In 2015, it introduced user-generated advertising service, integrated its attributes and demands of brand owners, and displayed valuable advertising contents to users through the Round Table, institution account and other service channels. At the same time, in the tide of knowledge payment, it has explored content values in depth and helped content producers to obtain corresponding incomes through knowledge sharing and thus achieve a win-win result.  
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