It only took 3 seconds for the auction to shoot from 217,000 yuan to more than 10 million yuan. By the time the sale closed at 22 million yuan, new media producer Papi set China’s record for the single most expensive video advertisement.
The competition on April 21 drew strong bidders such as Ecovacs and Whaly Technology, but both were outbid by Lily and Beauty.
But the attention the auction generated still paled in comparison to what Papi received in March, when four companies graced the controversial video producer with 12 million yuan in financing.
What 22 Million Yuan Buys
While many commentators were marveling over the sum, new media talk show host Luo Zhenyu explored the question of how Papi could spin her recent celebrity into a long-term business.
Yang Ming, CEO of Papi’s team, pitched a plan that would launch a celebrity website named “Papitube” and provide a 22-million-yuan endowment to her former school, the Central Academy of Drama.
Both idea hinge on Papi’s ability to maintain her momentum.
A lone video advertisement selling for 22 million yuan is completely contrary to the current Chinese market, where annual endorsements from the most popular stars cost only 10 million yuan.
With a final auction price of 22 million yuan, Lily and Beauty blew 10 percent of the company’s annual advertising budget on Papi, Luo said.
Whaly Technology, one of the other top bidders, dropped out when the price reached 18.3 million yuan. A spokesperson for the company said that although new media advertising is important, it is difficult to evaluate Papi’s commercial value.
Its social media poll debating whether or not Whaly Technology should continue its bid drew 2,000 users, which the company said was more than most of its other promotional activities.
Shen Yang, a professor at Tsinghua University, said the Internet celebrity concept is entering a new phase in China as brand communication and marketing unite. The last generation of Internet celebrities such as Feng Jie and Furong Jiejie failed to generate such commercial value.
CEO of iiMedia Research Zhang Yi said investors are paying more attention to Internet celebrities because of their ability to connect with fans to promote brands.
Most Chinese Internet celebrities can be categorized into new media producers, Taobao store operators and chat hosts. All three have great potential to make money.
Zhang Dayi, an advertising model whose Taobao shop has more than 4 million fans on Weibo, achieved more than 10 million yuan in sales in 2015. Some chat hosts have also been able to receive more than 1 million yuan in gifts from their fans.
There’s a lot of reason to think Papi may be at the forefront of a new trend.
The growing popularity of sharable, short videos will play a significant role in network communication, said Lin Chen, assistant professor at China Europe International Business School.
Lending further weight to the theory is Facebook’s recent purchase of several short video companies. In fact, short video advertisements now account for half of all Facebook’s advertising. And where Facebook goes, Chinese social media will follow.
Original works are becoming increasingly important in the Internet celebrity economy. Lin said that are the market matures, original content will be what pushes out celebrities who depend on a pretty face.
Additionally, the Internet celebrity is trending away from individuals and toward small studios. Insiders said that is the main reason Papi was willing to accept investment.
Road to Maturity
But Internet celebrities could find themselves without a platform. Many upload their works to streaming sites such as Youku and Tudou but share their videos through social media. The result has been that video operators are bearing the cost of viral works without getting a share of the virtual gifts and money, which remain locked into Weibo.
Finding a way to ensure that each platform profits from its participating in the industry remains a big problem.
Additionally, many female Internet celebrities rely on indecent tactics to attract male followers. In conservative China, many of their overtly sexual creations conflict with mainstream values and at times may break the law.