Traffic, is it important?

Internet practitioners are experiencing a cold winter.

There are various reasons for the industry's cold winter: on the one hand, the severe economic situation has made people hold their purse strings tighter, especially the increasingly obvious wait-and-see attitude of capital, making it difficult for companies with weak resistance to survive; on the other hand, the first round of traffic dividend period with central cities as the main body is passing - according to the latest data from the China Internet Network Information Center, the base of Chinese Internet users and mobile Internet users has only increased by 1.6% and 0.5% year-on-year, forcing companies to urgently find new growth engines.

The increasingly weak industry growth has forced practitioners to break away from the inertia of thinking and look for new alternative thinking. In the past, the strength of Internet companies was "land grabbing", and harvesting as much new traffic as possible was the top priority; at present, this idea is obviously unsustainable, and many companies have begun to turn to "user thinking" at the same time.

From traffic thinking to user thinking, from caring about numbers to caring about the real people behind the numbers, this has become the biggest change in digital advertising marketing in the past year.

Can it bring a better user experience to ordinary users? Does it provide advertisers with more satisfactory services? These two “people-oriented” issues are beginning to determine the future development prospects of digital marketing platforms to a large extent.

1. Is the value of traffic overrated?

For a long time, we may have overestimated the value of traffic, and even let the industry fall into the trap of traffic-only theory.

In recent days, news about Weibo celebrities’ “high impressions and zero conversions” has been all over social media. Perhaps it has caused many practitioners to be alert or call out, but in the end it is inevitable that it will be forgotten. The reason for this dilemma is simple: people pay too much attention to the numerical value of traffic but ignore the value of traffic. This cognitive gap has allowed more and more troublemakers to find opportunities to make a fortune through various means such as data falsification and click fraud.

Is this the traffic that advertisers need? The answer is obviously no.

The most well-known manifestation of traffic thinking is the funnel model that is popular in the industry. A funnel with a large entrance and a small exit places all the links of the consumer's decision-making chain inside. The message it conveys is nothing more than two points: to allow as much traffic as possible to flow into the funnel entrance, and to minimize the traffic loss rate in each link.

Essentially, the traffic mindset leads to a one-way transaction of the “one-time deal” type; the end point of this mindset is bound to be the reckless and brutal development of traffic, and similar drawbacks have been constantly highlighted in the past development of digital advertising. Simply put, traffic thinking does not focus on the lifetime value of users. This was not a problem when the industry was developing rapidly; but now, when the honeymoon period of digital advertising is gone, traffic-only thinking is no longer seen as a responsible way of thinking for the industry.

This constitutes the entire logic of the digital advertising industry's shift from traffic to users. For advertising and marketing, paying attention to the people behind the traffic has become an irreversible trend; in other words, advertisers’ demands have never been just the strong exposure brought by traffic - even in the era of traditional media, Wanamaker also raised the question "I know that half of my advertising budget is wasted, but I don’t know which half is wasted."

In fact, what advertisers have always needed is real relationship accumulation and sales conversion. The biggest difference between the current advertising industry and the past is that previous technologies can hardly meet the requirements of advertisers; but as the trend of digitalization of the industry becomes more and more obvious, the most essential requirement of advertisers begins to have an indicator system that can independently evaluate performance.

So to put it simply, traffic thinking is not the end point of advertising marketing, but a relay station; the relationship sedimentation and sales conversion brought by real users are the destination that advertisers most want to reach. Then, as an individual serving advertisers, it is only natural for digital marketing platforms to begin to shift from traffic thinking to user thinking.

Of course, if we carefully break down the user thinking here, we can identify two clues or paths: on the audience side, we need to improve our ability to accurately identify them while ensuring their user experience; on the customer side, we need to help advertisers cope with various challenges in the digital advertising process and improve our service capabilities to customers.

2. Understanding users: accuracy and experience are indispensable

When the Internet was just emerging, there was a famous saying that was widely circulated: "You never know whether the person sitting in front of the computer opposite you is a person or a dog." Now, when we no longer focus on traffic as numbers and begin to extend our perspective to every real person behind the traffic, the first priority is to fully understand the users as individuals.

So you can see that centralization is beginning to become the strategic adjustment direction of almost all giants. In the past few years, Internet companies including Tencent, Alibaba, and JD.com have integrated their scattered resources to varying degrees. Among these, precision has become one of the important directions of the evolution of digital advertising. When the Internet platform has three-dimensional insights into multiple scenarios such as social, information, entertainment, and e-commerce, it can achieve more accurate advertising delivery.

Contrary to popular belief, a certain degree of precision is not only beneficial to advertisers, but also to the audience. The reasoning behind this is simple: an advertisement that matches a user's needs exactly is no longer an advertisement, but a piece of information embedded in the user's life, so it naturally does not disturb the user ; on the contrary, those annoying advertisements are in most cases caused by insufficient distribution accuracy.

If you pay attention to the advertising information that appears in your circle of friends, you will often notice that your friends are densely packed with likes under the advertisements. Just imagine, if it does not meet people’s psychological needs, how can it attract collective likes?

Of course, while pursuing precision, it is also essential to pay attention to user experience. From the perspective of traffic, maximizing the potential for traffic monetization is of course the goal; but from the user's perspective, doing so is tantamount to drinking poison to quench thirst. For the same problem, different ways of thinking will naturally lead to different results.

For example, there are different opinions in the industry about Tencent's advertising monetization strategy. It has huge traffic from WeChat and QQ, but it has always been conservative in advertising monetization. If we look at it from the perspective of user thinking, it is not difficult to discover the underlying logic behind Tencent’s behavior: Do you want to realize the short-term benefits of traffic scale, or do you want to tap into user value in the long term?

In the past year, Tencent has integrated its advertising and marketing resources into a unified Tencent Advertising (AMS) system, but at the same time it has also suppressed the urge to quickly monetize. The answer it gives is obvious: users as people are much more important than traffic as numbers.

The digital advertising industry’s increasing emphasis on precision and experience is actually breaking the mindset limited by the traffic-only theory. In other words, the user experience perspective will bring about sustainable development capabilities for the advertising business, and the returns to be obtained in the future may have a lot of room for growth in the long run.

3. Serving customers and making digital advertising easier

For advertisers, the rapid development of digital advertising is both a good thing and a bad thing.

The good thing is that it allows advertisers to see the possibility of reducing unnecessary consumption and increasing returns on investment; the bad thing is that increasingly complex advertising products have increased advertisers' cognitive costs, and the various hidden rules and "black boxes" will also distract advertisers from focusing on their core business.

In his recently published book "The Advertising Wars," American columnist Ken Auletta mentioned that the advertising and marketing industry is in a stage of frequent concept creation. This is indeed the case. If you observe the advertising and marketing industry deeply enough, you will find that countless advertising concepts, terms or emerging technologies appear every year.

The emergence of so many concepts has even overwhelmed practitioners, let alone advertisers who are not professionals. It is becoming increasingly impossible to expect them to cope with the explosive growth of touchpoints, the rapidly shifting attention of audiences, and the noisy delivery environment on their own. In such circumstances, digital marketing platforms should shoulder more responsibilities and help customers complete their campaigns more easily in complex environments.

From the perspective of the advertising industry chain, advertisers are also users of the platform. At present, platforms can no longer simply rely on DAU, MAU or other similar data to attract investment, and service capabilities have also become an important indicator for B-side users to measure.

After integrating advertising resources into a unified "Tencent Advertising" last year, Tencent Advertising reorganized its business structure at the Tencent Smart Marketing Summit in May this year, forming three major business service teams, including Industry Department 1 that focuses on serving real economy brand customers, Industry Department 2 that mainly serves Internet native customers, and the regional and mid- and long-tail business department. Guided by customer needs, we serve the business growth of customers in different fields.

This organizational structure adjustment shows a clear trend in the future development of digital advertising: advertisers should not be left to deal with the complex product lines within the platform, but should have a unified docking entrance within the platform, which is responsible for helping them coordinate all their advertising resources.

In fact, in the past, platforms often adopted a model in which different teams operated different advertising resources; but now, the trend towards integration is irreversible. Not only that, the integrated Tencent Advertising can further coordinate scenarios, technologies, content IP and full-platform resources to provide a full-link marketing solution based on the Tencent ecosystem, meeting advertisers' differentiated marketing goals such as sales conversion, user sedimentation and operations.

In China, digital advertising has become more mature and rational in the past decade of development. Blind obedience and superstition about numbers are gradually disappearing, and the "traffic-only" view is gradually losing its market. On the audience side, people are beginning to call on the industry to pay more attention to people rather than numbers; on the advertiser side, numbers alone can hardly make companies open their wallets. The joint efforts of both ends have also forced the digital advertising industry to accelerate the abandonment of traffic thinking and turn to long-term user thinking.

More and more practitioners are beginning to understand that traffic corresponds to short-term benefits, while users correspond to long-term benefits . Many platforms that have been eliminated or abandoned in the tide of history often do so because they placed too much emphasis on traffic and eventually led themselves to an unsustainable situation.

No one wants to repeat the same mistakes. So right now, almost all players are accelerating in the direction of user thinking.

Author:WalterK

Source: Advertising Notebook (guanggaoshouzhang)