How China Became Big Business For Twitter, From Blocking To Blue Checks
By Fanny Botkin, Eduardo Baptista and Tony Munro
SINGAPORE/BEIJING (Reuters) - Even as China blocks 1.4 billion citizens from accessing Twitter, local authorities boast global advertising on the site, helping to make the country the platform's fastest-growing foreign ad market and biggest source of advertising. to make. It comes from overseas to the United States.
A Reuters review of public tenders, budget documents and propaganda tweets from 2020 to 2022 found that local governments and Chinese Communist Party propaganda offices in cities, provinces and even provinces flocked to Twitter to buy ads.
Public media campaigns by local governments often showcase local attractions and cultural and economic achievements to an international audience and are allowed without Twitter's ban on state media advertising.
The overview shows for the first time how important China is to Twitter, which is under pressure from investors to meet growth targets as its US business closes. It comes as the company is embroiled in a legal battle with Tesla CEO Elon Musk, who is trying to withdraw an unsolicited $44 billion bid to buy Twitter.
The China deals have become a source of internal friction between groups interested in expanding sales opportunities and those involved in optics, four sources told Reuters, amid growing tensions between Beijing and Washington over dealings with government agencies.
Twitter's case in China could come to a head on Tuesday when the US Senate Judiciary Committee hears a whistleblower complaint by Twitter's former security chief Peter Zatko.
The 84-page complaint alleges, among other things, that "Twitter executives knew that accepting Chinese financing threatened users in China" and that "Mr. Jatko was told that Twitter was too dependent on revenue streams to do anything else to generate revenue." raising this stage.."." Reuters could not independently confirm the allegations.
Twitter denied the allegations. Jatko declined to comment through his attorney.
China's sales team is actively poaching the country's local governments on Twitter as part of Alphabet's global strategy to compete for ad business with tech rivals such as Google and MetaFacebook, two people familiar with the matter said.
Gambling, e-commerce and technology companies in China are Twitter's main customers, according to two sources. Advertising revenue for Twitter's Chinese clients is estimated at "hundreds of millions of dollars a year" and most of it comes from these companies.
People with knowledge of the matter declined to be identified, citing nondisclosure agreements.
Twitter declined to comment on internal discussions or sales figures in China. A spokesperson for the company said the company has never concealed its dealings with Chinese trading companies.
Information asymmetry
The agency banned political and government media ads in 2019, though in August it banned private ads (from "(state media) accounts) https://blog.twitter.com/en_us/topics/company/2019/advertising_policies_on_state_media" allowed for. Entertainment, sports and travel content. However, this exemption was removed in March this year, completely banning state media companies from advertising on Twitter.
In a Twitter blog post in March, the company's vice president of global public policy, Seanad McSweeney, said a "serious information imbalance" occurs when governments block access to Twitter in their own countries and continue to use Twitter for their communications. use.
However, Reuters has found dozens of ads for China's local governments as well as state media on Twitter since March. Twitter, like other platforms, generates revenue when advertisers post ads through the online self-service platform.
Twitter said it has developed automated detection technology that targets activity that violates the platform's policies. "This is a difficult task, and we know we have more work to do," the company said in a statement.
The Beijing-based Ministry of Culture and Tourism, the main propaganda arm of the Chinese Communist Party and central government, did not respond to requests for comment.
"life is beautiful"
Twitter's China region generated 800 times the fastest growing revenue globally since 2014, according to the now-deleted LinkedIn biography of Twitter Great China managing director Alan Lan. Reuters reviewed the biography in late August before it was removed.
Twitter declined to comment on the figures in the bio, and La, who heads its Singapore-based China sales team, was not available for comment.
China's local governments continue to receive foreign social media ads and content even after the country's borders were closed due to the COVID-19 pandemic, a review of 36 publicly available local government tenders, 2020-2022 budget documents and social media accounts has found brought to light. It was not immediately clear why such ads were blocked for China.
"Life is always so beautiful because we are in Wuhan," he wrote in a 2021 promotional tweet from the visit_wuhan account, part of a two million yuan ($289,000) government tender.
Another circulating tweet from September 2022, a verified account from Shaanxi Province, known for the Terracotta Warriors, urged users to "Hurry up and follow me to Shaanxi to experience its magic!"
Advertising policy reviewed
Some senior Twitter executives in Washington, worried that expansion into China could affect the company, have pushed for a total ban on sales to Chinese government accounts in 2020 under former US President Donald Trump, amid rising tensions with Beijing. Two sources.
Twitter declined to comment on internal discussions.
The company's efforts to set up its first sales office in China in 2019 have stalled due to data security concerns and internal tensions over the company's operations in China, sources said.
Twitter did not respond to questions about talks with the mainland office.
A Reuters review of more than 300 accounts representing local governments found that fewer than a dozen were classified as state media by Twitter at the time this story was published. Public tender documents reviewed by Reuters show that most of these accounts were given to state media.
iChongqing_CIMC, a state organization promoted by the southwestern city of Chongqing, as well as PDChinaLife and PDChinaSports, run by the Communist Party's official People's Daily, have campaigned on Twitter for the past month. The People's Daily and Aichongqing did not respond to requests for comment.
blue strategy
As the company grew, Chinese local government accounts increased their requests for the company, asking for blue-sign verification like accounts elsewhere or to help with negative activity targeting their accounts, two of the sources said.
"In the past, if there were negative things or bots, some government accounts would complain to Twitter sellers," said a person familiar with Twitter sales activity in China, adding that Twitter only responds to spam complaints -accounts added or linked by Chinese. Local. Government accounts
The purchase of Twitter ads by state-linked companies comes as Chinese police increase arrests of citizens who find ways to use the platform to criticize the government, according to Chinese court reports.
Chinese courts have convicted dozens of people over the past three years for using Twitter and other foreign platforms to criticize the government, according to court documents and media reports.
China rarely comments on such cases, but when it does, it justifies punishment by accusing critics of trying to undermine the system.
(Dollar = 6.9222 Chinese Yuan)
(Reporting by Fanny Botkin in Singapore and Eduardo Baptista and Tony Munro in Beijing; Editing by Kenneth Lee and Kenneth Maxwell)
