World's Biggest Online Community Hoping to Cash in on the Olympics

Chinese web giant Tencent set up its dedicated Olympic Team more than three years ago and has been preparing for the London Olympics ever since, hoping to grab a big chunk of the cake.

Beijing Olympics closing ceremony (Andy Miah)

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经济观察报E.O/Worldcrunch

BEIJING - As the London Olympic Games approach, China’s four major Internet portals are entering the last warm-up phase for the vast advertising dash that will be held during the games.

Tencent is the world’s largest online community with its instant messenger service Tencent QQ and numerous other web platforms including QQ.com. It set up an Olympic Project Team early this year and hopes to become China’s top portal by both traffic flow and number of users during the games.

Tencent has invested heavily -- it bought exclusive access rights to top teams and sports star sponsorships -- and set up their official blogs and microblog sites.

“The flow, influence and ad revenue are the three performance indicators for web portals in the competition”, says Chen Chu Hung, editor in chief of Tencent.

According to informed sources, Tencent’s total revenue at the 2008 Beijing Olympics was around $24 million. But the next Olympics are expected to garner even more revenue. The company set up a dedicated team three years ago, right after the Beijing event, in order to sign up the big-name athletes.   

For 17 days, the Olympics will be top news around the world. Aside from television, which pays astronomical sums for live broadcasting, the Internet is playing an ever larger role in the games, in particular in countries like China, where there’s a major time difference with London, and where the market is huge. For advertisers, the Internet is also much cheaper than television.

A different Olympic Games "user experience"

In 2008, China’s state television CCTV’s total ad revenue was $1.2 billion. Tencent has the largest user base in China. Through its different platforms and with 711 million active user accounts for its instant message service, it hopes to grab a big chunk of the cake during the games.

The Tencent Olympic Project Team includes an editorial task force of more than 450 people, as well as over 100 technical and maintenance operatives, about 100 of which will be stationed in London during the summer.

NetEase, a strong competitor of Tencent is also sending 50 front-line reporters to cover the games directly from London’s stadiums. It will cover events with uninterrupted mobile phone broadcasting 24 hours a day. 

In an era when users’ time and available information are more and more fragmented, it has become increasingly crucial for businesses to learn how to use social media, such as micro-blogs and online video, in targeting customers and finding the optimal marketing strategies.

For instance, “For China’s football fans, using a Twitter-like micro-blog to share their joy with other fans is in itself just as important as watching the broadcast,” the vice editor-in-chief of Tencent Wang Yongzhi points out. “The rise of social networking makes it easier for people to enjoy the fun of an Internet carnival. Web portals competing in the Olympics games are in essence running an integrated marketing race."