Analysis of advertising monetization process!

This article analyzes the advertising monetization process from the aspects of product advertising space, advertising sources, value estimation, advertising launch, data tracking and iteration.

In the Internet winter, the first question that almost all Internet products have to answer is "How can we realize monetization quickly?" Perhaps every product has its own monetization direction at the beginning of its creation, but among all the monetization methods, advertising monetization is the simplest and most direct. You can realize advertising monetization as long as you have users.

The Internet has a formula: users = traffic = money

Advertising monetization is one of the most common ways to monetize traffic. Simply put, advertising monetization is to add other people's advertisements to your own products to make a profit. So as a product manager, what is the process of advertising monetization? What should we pay attention to during the advertising monetization process? Let’s discuss it together today.

1. Advertising space definition and management

Advertisement positions are mainly divided into standard operation positions and non-standard operation positions.

• The standard operation position can be understood as the main fixed operation position, such as a fixed entrance for list activities, an icon at a fixed position, a floating layer or page at a fixed position, etc.
• Non-standard operating positions include opening screen, pop-up windows, floating icons, banners, etc. Many apps have also developed many innovative advertising entrances, which are also non-standard operating positions. For example, the ads in the pull-down refresh function of Meituan Takeout, and the interactive ads of the delivery guy icon in Meituan orders.

Depending on the size of the APP and the location of each location, there can be different pricing methods.

The pricing methods include: CPC (cost per click), CPM (cost per impression), CPS (cost per sales), CPT (cost per time period), and CPA (cost per performance).

• Many positions of top-traffic apps such as iQiyi and Youku are sold based on CPT.
• Generally, the common advertising space for apps with low traffic is sold based on CPC and CPM.
• CPA and CPS are generally rejected by the media.

You need to understand the ad spaces on your platform that can be used for monetization, manage and monitor them, and adjust strategies at any time based on changes in functionality. After all, advertising affects user experience, so it is necessary to weigh the benefits and experience.

2. Advertising Sources

After you have the ad space, the next thing you need to consider is the source of the ads.

If the platform is not large enough or human resources are insufficient, you can choose a third-party advertising platform, such as Tencent Guangdiantong and Toutiao Pangolin. These third-party platforms have abundant advertising resources to meet the needs of various advertising formats.

If the platform has reached a certain scale and has sufficient human resources, it can build its own advertising platform in parallel while also connecting to third-party platforms. This way, it can compare monetization effects and continuously optimize revenue.

The third-party platform here is not just a simple web page, but also a constantly iterating system, including DSP+SSP+DMP, etc. It requires a lot of manpower, financial and material resources to maintain. Often, building a platform is beyond the scope of a product manager’s responsibilities, but as a product manager, you need to understand how to continuously optimize revenue.

There are also many points to note when connecting to third-party advertising platforms:

• Advertiser review: Because the connected advertisements are provided by a third-party platform, the advertisers of the partners need to be reviewed in advance. Because there may be competing advertisements or illegal advertisements.
• Quotation commitment: In order to ensure the profitability of the product, we can cooperate with multiple third-party platforms and make comprehensive considerations based on the quotations based on advertising source commitments and services.
• Customer complaint handling: Generally, some advertisers that violate regulations (involving pornography, gambling, P2P, etc.) will give very high bids when bidding on the advertising platform. The result is user complaints. Therefore, another test for third-party platforms is their ability to quickly handle complaints about advertisements.

3. Value Estimation

When connecting to multiple third-party platforms, each platform will give a value estimate for each advertising space of the product. Through third-party platforms, you can understand the value of all your advertising spaces. However, the quotations from third-party platforms are usually inflated. Usually there is a grayscale testing phase before the official launch, and the testing content includes server stress testing, advertising value estimation, advertiser review, etc.

Through grayscale test value estimation, you can understand the revenue status of your platform. However, when considering the benefits, we also need to consider the user experience. Only advertisements that suit users' tastes can reduce the impact on user experience. Therefore, product managers should note that the revenue considerations here are not necessarily the higher the better. Because every platform certainly does not want to just look at the short term, what the platform wants is real sustainable development.

Points to note when estimating value: quotations need to be verified - all third-party platforms want to sign more media, so constant verification and supervision are required.

4. Advertising Online

Generally speaking, third-party platforms will have docking documents. It usually only takes a few days from signing the contract to officially launching the product, and some advertising platforms even promise to launch the product in one day.

After the platform goes online, advertising spaces need to be monitored at all times. The monitoring here is mainly stability. Generally, platforms have their own traffic peaks every day or every week. Pay attention to third-party advertising spaces during traffic peaks. If the third-party server is not adequately configured, it is very likely to crash and lose advertising sources, so product managers must consider plan B in advance.

Points to note when launching an ad:

• Third-party system stability: The third party may crash at any time, so you need to make sure the switches are in place in the background and have a plan B.
• Advertiser review: There is an advertiser agreement in the instant contract, but there are many third-party advertising platforms that skirt the rules and easily secretly set locations and times to place illegal advertisements. Supervision is required at all times, such as changing geographical locations, changing uncommon time periods, etc.

5. Data tracking and continuous iterative optimization

After the advertising system is launched, the data of each advertising position must be tracked for a period of time. The data here includes advertising type analysis, UV, PV, value, conversion rate, etc.

The purpose of data tracking is not only to check advertising revenue, but also to continuously optimize advertising positions. With the data foundation, you can fill in different ad types and change different positions to try to optimize monetization efficiency.

Assuming the ad space and ad content remain unchanged, all ad values ​​(single UV value) are almost on a downward trend. Only by analyzing data and finding the key reasons can we continuously optimize advertising.

VI. Conclusion

The key point of advertising monetization is still user experience. If you ask me how to deal with advertising monetization and user experience. I can't tell you the answer directly.

Advertising monetization has now developed into a science. Product managers need to constantly try, learn, and collide to perhaps find ideas. A truly good product must be able to balance good monetization and user experience. The above are just some of the experiences and thoughts on advertising monetization. I hope this article will be of some help to you.

Author: Water Puppet

Source: Water Puppet