Analysis of Tencent Advertising’s Bidding Mechanism

With the development of Internet technology, more and more companies choose to do online promotion on Tencent. However, there may be many friends who don’t know much about the bidding mechanism of Tencent Advertising . So today, we will introduce the bidding mechanism of Tencent Advertising in detail to help everyone have a deeper understanding of Tencent’s bidding advertising!

1. Detailed explanation of Tencent bidding ads

First of all, we need to understand the difference between brand advertising and performance advertising and the corresponding evaluation indicators; let’s talk about brand advertising first. Brand advertising is mainly used to enhance consumers’ awareness of the brand and help companies build their brand image, and the evaluation indicators of brand advertising are generally CPM (cost of 1,000 impressions), CPC (cost generated by netizens clicking on the ad once), and CTR (click-through rate, i.e. clicks/impressions); while performance advertising mainly uses advertising formats and advertising creativity to attract netizens to click, and ultimately promotes ordering behavior. There are also many evaluation indicators for performance advertising, mainly ROI (return on investment, i.e. total advertising output revenue/total advertising investment cost), CVR (conversion rate, i.e. the efficiency from seeing the ad to generating an order), CPL (cost per lead), and CPD (download cost, i.e. the cost generated each time the APP is downloaded); whether it is brand advertising or performance advertising, advertisers usually use evaluation indicators to judge the effectiveness of advertising.

Secondly, let’s take a look at the two states of bidding advertising: eCPM and oCPM/oCPC. Among them, eCPM is only a parameter used to reflect the conversion ability of the website and cannot represent the actual income of the advertiser. The platform determines which advertiser's ad should be played by the user through the eCPM ranking. Therefore, the higher the eCPM value, the easier it is for the advertiser's ad to be displayed. Smart bidding oCPM and oCPC optimize the cost of a single conversion target. Under different promotion goals of WeChat ads, advertisers can choose different optimization targets.

2. Influencing factors and optimization techniques of Tencent bidding ads

Now that we have learned about Tencent bidding ads, let’s talk in detail about the factors that influence Tencent bidding ads and the corresponding optimization techniques. First, we can understand the influencing factors of each generation based on the eCPM bidding ranking formula, and then optimize and adjust accordingly;

eCPM value calculation formula:

Conventional bidding: eCPM = bid * estimated CTR * n

Smart bidding: eCPM = bid * estimated CTR * estimated CVR * n

In conventional bidding, when the bid has reached the industry recommended bid, we need to optimize CTR. There are three main factors that affect CTR: crowd targeting, creative materials, and outer advertising style. Crowd targeting: We can choose to target all crowds, not any targeted tags, to obtain maximum conversions nationwide; or choose industry optimization, that is, Tencent side operations dig out industry crowds and push them to the advertising delivery end; or the advertiser's own conversion data within the past three months, which is used for the system to learn the attribution model and find crowds with similar conversion data; set interest/behavior targeting, and select the target netizens' interest tags and search, browsing, visit and other behavior tags according to the promotion goals;

For creative materials, we need to analyze products and users, start from the interests and pain points of consumers, fully explore consumers' needs and preferences, motivations and pain points, as well as their decision-making habits, and dig out the rational and emotional selling points of products, promotional discounts, etc. For the outer style of advertisements, we can choose as many ad slots as possible with high average click-through rates in the industry;

In smart bidding, there is one more CVR than regular bidding. Therefore, its corresponding optimization has one more conversion rate. The two main factors affecting the conversion rate are landing page design and conversion link. First of all, for the design of the landing page, we can choose as many component tools as possible that are helpful for the conversion effect according to the delivery goal. This can help us maximize the number of conversions. We can use the platform's landing page tool to design the landing page, which is simple, convenient and easy to operate. The second is the creativity of the landing page. We need to reasonably sort the landing page tools. For example, put the direct conversion target tool on the first screen. The landing page material design should also be reasonably arranged, focusing on highlighting the features of the product, how the product solves the user's pain points and the benefits the product brings to consumers.

The second is the optimization of the conversion link. First, the choice of landing page style. If the brand builds its own landing page, it must first do a good job of data feedback, otherwise the system will not be able to obtain the brand conversion population and thus optimize the advertisement. For WeChat native promotion pages, the WeChat delivery end directly creates and generates landing pages similar to H5 formats, which automatically return conversion data and do not need to use API. Then there is the conversion path. The most efficient conversion path only requires two steps, i.e. click on the ad-order completion. However, data feedback must be done well, otherwise the system will not be able to obtain conversion data and will not be able to optimize the population. In addition, we should note that the shorter the conversion link, the lower the user behavior cost, the lower the user churn rate, the higher the conversion efficiency, and the better the advertising effect;

3. How to increase the volume of Tencent bidding ads

Well, after talking about the factors affecting Tencent bidding ads and optimization techniques, let’s take a closer look at how Tencent bidding ads can be used to increase volume. First, let’s take a look at the tools and methods that help smart bidding increase volume. Four types of volume-increasing tools: automatic volume expansion, product advertising, one-click volume increase, and creative optimization. Three methods of volume increase: targeting, bidding, and materials.

Automatic expansion: Automatic expansion means that the backend learns the target population of the advertisement based on the historical conversion data accumulated during the advertising, and expands the target population. If the advertiser has already sent back the deep conversion data, then the automatic expansion will pay more attention to learning the deep conversion population, making the population after automatic expansion higher quality.

Product advertising: Product advertising is different from regular advertising. Before advertising, you need to select the products to be advertised. Note that you must first create a new product in the product library in the advertising system backend. Combined with Tencent big data, based on the rich information of product advertising, optimize the data model to improve the overall advertising effect;

One-click volume increase: One-click volume increase can help customers quickly spend their budgets in the early stages of advertising, aggressively explore, help new ads quickly obtain conversions, or quickly determine ad failures; however, each ad can only be used once, so it is best to choose one-click volume increase in the early stages of creating a new ad;

Creative optimization: Creative optimization refers to intelligent optimization of advertising ideas, intelligent selection of the best ideas, copying the best ideas to generate new ads, and the survival of the fittest to increase advertising exposure opportunities;

Targeting: Interest behavior targeting refers to the method of defining marketing groups based on smart bidding. However, when specifying and selecting interest behavior tags, you should pay attention to the expected maximum daily exposure displayed on the right side of the delivery terminal. You should select interest behavior tags reasonably, otherwise the ads will become narrower and affect the advertising volume. We need to continuously accumulate the target groups targeting tags of each industry.

Bidding: During the three cycles of smart bidding, we need to use the correct bidding and price adjustment methods to quickly increase the exposure of ads and ultimately achieve a stable conversion cost. However, please note that in order to prevent advertising costs from fluctuating too much, when adjusting bids, we try to keep the adjustment range between 3% and 7%, and in principle no more than 10%.

Materials: The diversity of materials helps to improve the diversity and quality of creativity. When placing advertisements, we should constantly update new materials, which will help improve the competitiveness of the advertising account and help the advertisements to quickly increase in volume. In the oCPM bidding environment, the bid for videos should be higher than that for pictures. If there are too many video materials in the plan, the conversion cost of the account will be raised. Therefore, we recommend that the ratio of videos to pictures should be: number of videos: number of pictures = 2:8, or number of videos: number of pictures = 4:6.