US app ads help fund Chinese mobile ‘propaganda’

A US House of Representatives intelligence committee may be trying to block two Chinese mobile makers from entering the US but, over in the Far East, a US mobile company has struck a cordial and profitable trade agreement with an unlikely Chinese ally.

Redmond, WA-based mobile advertising firm Red Loop Media says it won a contract to power mobile ads for China’s state news network.

China Xinhua News Corporation (CNC) is part of the country’s official Xinhua News Agency, which reports to the Communist Party, and began broadcasting in 2010. CNC recently launched mobile apps, like this for iPhone, offering live and on-demand video news.

Red Loop says it will serve ads in to the apps and provide targeting and analytics. It is a follow-up to a deal the firm announced in June to power mobile ads for China National Radio’s apps.

Western tech companies generally have a hard time trying to break China. Amongst large players, Facebook still has not broken through and Google has had to balance commerce with censorship, while local outfits are creatively building their own services on the back of Silicon Valley software. The prospects for smaller vendors might, therefore, have appeared even more remote.

But Red Loop’s success there appears to come because the Redmond firm also operates a distinct Chinese subsidiary. Earlier this year, the Chinese version of Newsweek selected the firm to power its mobile and tablet app ads. The company uses MWave, an advertising firm staffed by former Chinese ad agency sales execs, in its efforts there.

If this mixing of Chinese propaganda and US-style techno-capitalism blends like oil and water, recall, too, that the People’s Daily newspaper, an organ of China’s ruling Communist Part, took its online news operation public in April to raise around 1.55 billion yuan ($245.45 million) to finance improvements to its mobile news service. The publisher, which takes a quarter of its content from Xinhua, wants to retain its influence by catering to a younger generation of citizen that is rapidly adopting mobile and social platforms.

China’s smartphone segment is booming, with many internet users now going straight to phone, leapfrogging landline connections, and the country is seeing a creative explosion in Android tinkering.

Xinhua reports to the Propaganda and Public Information Department in China.