How China Became Big Business for Twitter

SINGAPORE/BEIJING (Reuters) – China keeps 1.4 billion citizens off Twitter, but local authorities are spending big on global advertising on the site, making it the fastest growing country on the platform It has become a global advertising market and has helped make it one of the largest non-advertising markets. – U.S. Source of Income.

A Reuters review of publicly available government bids, budget documents and promoted tweets from 2020 to 2022 found that local government officials and the Chinese Communist Party’s nationwide city, provincial and even district propaganda offices tweeted ( TWTR.N) to buy ads. .

Promotions, often outsourced by local governments to state media, pitching local attractions and cultural and economic achievements to global audiences were allowed under an exception to Twitter’s ban on advertising in state media. .

The review shows for the first time how important China has become for Twitter at a time when its U.S. business has stalled and investors are under pressure to meet its growth targets. The company, embroiled in a legal battle with Tesla (TSLA.O) chief executive Elon Musk, is withdrawing his unilateral $44 billion offer to buy Twitter.read more

Four sources said Reuters’ business in China will consist of a team dedicated to maximizing sales opportunities and doing business with state-owned enterprises at a time of heightened tensions between Beijing and Washington. This caused internal conflicts with other teams concerned about

Twitter’s deal in China comes after the U.S. Senate Judiciary Committee held a hearing on Tuesday to consider a whistleblower complaint filed by Twitter’s former security chief Peiter “Mudge” Zatko. I went to the front.read more

He referred to this Reuters article when testifying about how the FBI told Twitter that there was a Chinese agent working for the company.

Among other allegations, his 84-page complaint alleges that “Twitter executives knew that accepting Chinese money risked putting Chinese users at risk,” adding, “Mr. Zatko was told Twitter is too reliant on its revenue stream at this point to do anything but try to increase it.” Reuters was unable to independently confirm the allegations.

Twitter has denied the accusations. Zatko, through his attorney, previously declined to comment.

At the hearing, Senator Chuck Grassley said Zatko’s disclosures to the commission allege that the FBI notified Twitter of at least one Chinese agent within the company.

Zatko said at the hearing that the agent was said to be from China’s main spy agency, the Ministry of State Security.

At the hearing, the former executive said Twitter employees had “caused an “internal conundrum” because the platform had received money from entities affiliated with the Chinese government, even though it was banned in China. I was annoyed,” he said.

“The response was that we’re already sleeping. Losing that source of income is going to be a problem, so find a way for people to get comfortable with that,” Zatko told senators.

Two people familiar with the matter said Twitter’s China sales team has moved to local areas of China as part of a global strategy to compete with tech companies such as Alphabet’s Google and Meta’s Facebook for the advertising business. He actively worked with the government.

Chinese gaming, e-commerce and technology companies are also major Twitter customers, according to two sources. Most of them are from these companies.

A person with knowledge of the matter declined to be identified, citing a non-disclosure agreement.

Twitter declined to comment on internal discussions or sales performance in China. A spokesperson said the company has never hidden the fact that it does business with Chinese commercial entities.

“Information Imbalance”

The company banned advertising in political and state media in 2019, August blog announcement That year, it allowed the carve-out of advertising “from (national media) accounts dedicated to entertainment, sports and travel content.” But in March of this year, that exemption was revoked, effectively banning state-owned media companies from advertising on Twitter altogether.

In a blog post on Twitter in March, Sinead McSweeney, the company’s vice president of global public policy, said that governments blocking access to Twitter in states continued to use it for their own communications, calling it “serious.” He said that a “great information imbalance” would occur.

Still, Reuters found that dozens of ads from China’s local governments and state media themselves have appeared on Twitter since March. Twitter, like other platforms, also makes money from advertisers submitting ads through his platform, which is self-service online.

Twitter said it is improving its auto-detection technology aimed at activity that violates the platform’s policies. In a statement, the company said, “This job is rewarding and we know we have more work to do.

The Chinese Communist Party’s top propaganda agency and the central government’s Ministry of Culture and Tourism, both based in Beijing, did not respond to requests for comment.

“life is wonderful”

Twitter’s China region is the world’s fastest-growing region, with an 800-fold increase in revenue since 2014. LinkedIn bio of Alan Lan, Managing Director of Twitter Greater China. According to. The bio was reviewed by Reuters in late August before being taken down.

Twitter declined to comment on figures in the bio and reached out to Mr. Lan, who heads the Singapore-based China sales team, for comment.

A review of 36 publicly available local government bids, budget documents for 2020-2022, and social media accounts shows that Chinese local authorities will continue to operate in foreign countries even after borders are closed due to the COVID-19 pandemic. continued to buy social media ads and content from It wasn’t immediately clear why such an ad was posted when China is effectively on lockdown.

A tweet posted from the @Visit_Wuhan account in July 2021 included a portion of a 2 million yuan ($289,000) government bid.

Another promotional tweet from September 2022, a verified account from Shaanxi, famous for its Terracotta Warriors, called on users to “Hurry up and follow me to visit Shaanxi and feel its charm!” .

Advertising Policy Tested

Some senior Twitter executives, based in Washington, fear that the expansion of its China operations could backfire on the company, prompting the administration of former President Donald Trump to step down as tensions with Beijing worsened in 2020. during a call for a complete curtailment of sales to Chinese government-affiliated accounts, according to two sources.

Twitter declined to comment on internal discussions.

The company’s attempt to set up its first mainland China-based sales office was shut down in 2019 over data security concerns amid internal tensions swirling over the company’s operations in China, according to sources.

Twitter did not respond to questions about the meeting at the office on the mainland.

A Reuters review of more than 300 accounts representing local governments found that, at the time of this article’s publication, Twitter classified fewer than 12 accounts as state media. Publicly available tender documents reviewed by Reuters show that the majority of these accounts are outsourced to state media.

@iChongqing_CIMC, a state-owned business funded by the southwestern metropolis of Chongqing, and @PDChinaLife and @PDChinaSports, verified accounts run by the official People’s Daily of the Communist Party, all continued to advertise on Twitter until just last month. . Both People’s Daily and iChongqing did not respond to requests for comment.

blue tick

As the business grew, local government accounts in China increased demands on the company, asking for blue-tick verification just like any other account, or asking for help with negative activities targeting the account. said two sources.

“Some of the government accounts had previously complained to Twitter’s sales representatives about negative things and bots,” said a person familiar with Twitter’s sales activities in China. It added that Twitter only responded to complaints that spam accounts commented on or engaged local governments in China. account.

Chinese news reports on the trial show that state-owned companies are buying ads on Twitter as they increasingly arrest citizens who find ways to use the platform to criticize authorities. .

Over the past three years, Chinese courts have sentenced dozens of people for using Twitter and other foreign platforms to criticize authorities, according to court records and media articles.

China rarely comment on such incidents, but when it does, it justifies punishment by accusing its critics of trying to overthrow the regime.

($1 = 6.9222 Chinese Yuan)

Reporting by Fanny Potkin of Singapore and Eduardo Baptista and Tony Munro of Beijing.Edited by Kenneth Lee, Kenneth Maxwell and Lisa Shoemaker

Our standards: Thomson Reuters Trust Principles.