9 thoughts behind private domain traffic, fission, and sinking market

The topic of private domain traffic has become increasingly popular these days, and many friends around me have asked me what I think:

So here is a brief discussion:

1) What exactly is private domain traffic? Should we get involved?

2) What’s the common logic behind the concepts of fission, sinking market and retention?

01

First of all, private domain traffic is an assembled concept . It originated from the fact that e-commerce practitioners considered Taobao to be public domain traffic (search traffic does not belong to their own traffic), while WeChat is a conceptual distinction between private domain traffic (traffic can be played by oneself). Later, more and more scenarios were called private domain traffic, such as the aggregation of offline traffic, adding personal accounts online, etc.

There are 4 premises behind its popularity

• Capital perspective: It is difficult for small and medium-sized enterprises to raise funds in the secondary market
• Platform perspective: Supporting measures such as payment and marketing functions are becoming more and more mature
• From the perspective of enterprises: Offline enterprises are further connected to the Internet, and online enterprises attach importance to refined operations
• User perspective: With the explosion of social e-commerce, people have become accustomed to personal marketing.

To launch a concept into the market, it generally requires the combination of several elements. For example, short videos were technically mature in 2010, but they did not explode until 2017 due to the migration of user habits and the further reduction of 4G charges.

02

When it comes to private domains, you don’t have to worry about the concepts; ultimately it all comes down to the results . A great man once said: It doesn’t matter whether the cat is black or white, as long as it catches mice, it is a good cat. Just like my previous logic for judging growth hackers, not only those who can fission are called growth hackers. If you can gain hundreds of thousands or millions of followers just by writing articles, you are a top growth hacker.

For to c companies:

Revenue = Traffic * Conversion Rate * Average Order Value * Repurchase Rate

The private domain we are currently discussing is actually centered around the optimization of three factors: conversion rate, average order value, and repurchase rate, that is, improving user LTV.

Here is a simple example of how private domain optimizes these three elements:

1) Improve conversion rate:

The traditional conversion rate is a funnel model. The core of improving the conversion rate is the setting of the conversion path, that is, allowing users to complete the established path and finally convert.

Figure: Visual User Story Map, September 2018, by "Advanced Operations"

For the same product, the logic and effect may be completely different if you first convert the community to a personal account and then create a group, or first convert it to a personal account and then create a group.

The former is mostly used for community fission, relying on the community to increase volume and light on conversion. The latter is mostly used for transaction numbers, which lengthens the cycle and cultivates user trust.

This year is a big year for communities. Many products have begun to be converted within communities , especially products with high decision-making costs, such as education and insurance products. By setting up a script in the community (starting with the lecture - setting off in the group - private chat language - cooperation with friends circle, etc.), the conversion rate is very high.

2) Increase the average order value

In order to increase the average order value, in addition to the product itself, there is another important logic, which is to transform demand traffic into trust traffic . How to understand it? For example, when it comes to items worth tens of dollars or less than 100 dollars, many people actually make impulse purchases. However, when it comes to items worth hundreds or thousands of dollars, they need to think about it. The logic behind the purchase is that they must first trust the company or person.

Picture: From marketing Lao Wang’s article “The world has suffered from traffic for a long time! 》

It comes from belief that selling anything is feasible. This year, cross-border course selling between the education field and WeChat business is very popular. The core logic is that many WeChat business communities have been nurtured for many years and have a natural sense of trust. The only difference is that the physical objects have been replaced by courses in terms of product categories.

3) Increase repurchase rate

A major differentiating point between private domain traffic and public domain traffic is the separation of usage rights and ownership rights . In the public domain system, it costs money every time you reach a user. For example, search traffic. But in the private domain, as long as it is your own traffic, it can be reached N times, which means increasing the repurchase rate.

Figure: Product marketing evaluation in WeChat

03

Private domain traffic is not equal to WeChat traffic pool . From the perspective of conversion, as long as users can be retained on the platform and conversion can be completed independently, it is a good platform.

QQ is a very good conversion pool because of its perfect group management system. The financial management platform Changtou Academy has been thriving on it by attracting traffic with its 9-yuan courses.

The short video platform Kuaishou has recently exceeded 200 million daily active users. For an APP with a market cap of 200 million, Kuaishou has long since gotten rid of its previous low-level logic, and last year 15 million users made money on Kuaishou.

For Douyin, thanks to the addition of the shopping cart at the end of last year, merchants' monetization capabilities have been rapidly released, but the threshold for monetization on Douyin is relatively high and requires solid content.

This year is the explosive year of live streaming e-commerce. The logic of users buying things on Douyin and Kuaishou is a bit like visiting street stalls before. It is not about searching for scenarios, but about awakening needs , and then buying while shopping.

The amount of browsing brings far more than the amount of searching, which can be compared to the logic of information flow and search. The former has much greater room for imagination.

For Xiaohongshu, the core logic of its community focuses on shopping, and its users are high-quality and have a strong desire to buy. Unlike HFB (a cosmetics brand, currently ranked in the top ten in Tmall categories), which has been frantically advertising on WeChat official accounts, Perfect Diary has achieved a second explosion on Xiaohongshu.

In fact, from another perspective, APP is the largest private domain. Companies that do well on WeChat, such as Kaishu Telling Stories and Baby Playing English, also have launches in the app market. For example, "Dui Zhuang Jade", a company that sells jade, is doing live broadcasts on its app and selling through private messages to customer service, with very good results.

04

Products with high unit prices and high decision-making costs are naturally suitable for private domain traffic . For media products, the logic of advertising based on CPM is not suitable for private domains.

The key to evaluating whether an enterprise needs to develop private domain core is to look at the input-output ratio. For example, if it is finally implemented on a personal account, it will undoubtedly require more manpower support. Generally speaking, for an OTO account (where transactions are conducted directly), one person can operate about three accounts (about 3,000 people). Enterprises need to make batch layouts in advance to complete industrialized operations. Batch replication is one of the difficulties.

05

In fact, the largest traffic is still in the public domain, and the private domain only accounts for a very small part of the overall traffic. The 618 season is approaching, and it is time for major businesses to start advertising.

There are also great opportunities in public domain traffic. For example, the POI function on Douyin can bring a lot of traffic to local businesses. The homestay industry has already been disrupted on Douyin.

06

How to play with private domain traffic? For offline companies, it means bringing offline data online and combining it with online gameplay. For example, many online companies say that community fission is difficult to achieve. A friend of mine works at a training institution in a small county and easily attracted more than 10,000 people in one event.

In addition, WeChat is increasingly empowering offline businesses, and it is said that the function of allowing merchants’ personal accounts to join groups will be opened in the future.

For online companies, traffic needs to be "drip-irrigated" and utilized to the maximum.

Official accounts have also been taking some actions this year, including live broadcasts. Xiao Xiao Bao Mama sold 2 million goods in one night, which is undoubtedly good for mid-level accounts.

Regarding the gameplay on public accounts, service accounts actually have a small wave of bonuses. You can observe Pinduoduo's service account. Basically, there is no advanced mass messaging, and it can make unlimited use of user behavior to trigger 48-hour customer service messages + template messages for push.

When it comes to the gameplay of a personal account, the core is to create a personal character . The one who is most proficient in this area is the previous "tea girl". The key here lies in the details. For example, the conversion rate of the same content in different presentation forms may be very different. for example:

Selfie > 1 sentence + 1 picture > 1 sentence + several pictures > 1 picture = 1 sentence > Long paragraph + 1 picture > Long paragraph + several pictures > 1 sentence > Long paragraph > 1 sentence + forwarding > forwarding > advertisement

Photo: by Guo Liangliang

07

Continuing to return to the revenue formula, the emergence of private domains proves that everyone attaches importance to the last three items, but what they are most concerned about is the first item, traffic, in other words, cheap traffic.

In order to find cheap traffic again, this year everyone has repeatedly mentioned the "downstream market", because the downstream market has a large number of new installations or replacements, and these users are less shielded from some common marketing tactics.

Masayoshi Son, the founder of SoftBank, once proposed the concept of a "time machine ," which means that the development time of the IT industry in different countries varies. Therefore, there is still a lot of room for overseas traffic to sink, especially in the Middle East and Indonesia. Previously, Chen Danian revealed that the number of users increased by 12 million in 12 hours was an Internet tool in Indonesia. In addition to the previous tool-type overseas expansion, various types of lending and consulting applications have also emerged.

Of course, the time machine also applies to China. China's first-, second-, third- and fourth-tier cities can actually be understood as segmented economies, and mobile Internet applications or gameplay are gradually penetrating.

Qutoutiao’s gold coin gameplay, including the recent popularity of the Octopus Input Method, is based on the same routine copied to different product lines.

In fact , the sinking market is not a new term . Weibo’s new round of growth 15 years later also relies on young people sinking to the lower levels.

Why has the sinking market been always underestimated? To borrow the understanding of Pinduoduo founder Huang Zheng, the media circle used to be people within the Fifth Ring Road, and their perspective was more focused on Beijing, Shanghai, Guangzhou and Shenzhen. Now looking back, these "silent majority" are bursting with tremendous vitality.

08

The other end of cheap traffic is through fission. The tricks of "like, compete, earn points, send and earn" have been proven to be effective. From the mathematical formula, fission is an exponential function, which is consistent with what we often say, "great force works miracles." After all, every boss has a dream of "getting XXX million fans at 0 cost" in his heart.

Figure: Virus fission formula

It's not that fission is impossible at present, but it has entered the deep water area . First of all, it is very dangerous for novice players to come in. For example, many students who do the task treasure in March will find that more and more people are consuming wool, which reminds them to migrate from consuming P2P cash to consuming physical objects. If there is no screening mechanism, they will suffer heavy losses.

The second trend is that fission pays more attention to enterprises designing their own products. Previously, they could use third parties, but the effectiveness was getting worse and worse, and enterprises needed to customize them according to their own circumstances. For example, the combination of Zebra English app and service account has a very good effect.

09

Enterprises can generally rely on fission to complete the accumulation of early and mid-term, but cannot support the entire cycle . If it is a single business (without changing the product form)

Fission cores are limited by two things:

• The circle that can be broken through by fission itself is limited, that is, "sharing exhaustion"
• The rules of the platform are limited, that is, WeChat cracks down on actions such as induced sharing and three-level distribution.

From the first point of view, the k value of the check-in fission that was previously banned is also declining. As for the second point, the logic of the platform is very simple. If everyone goes for the cheapest traffic, who would invest in Guangdiantong?

No matter how powerful a product is, as long as it is on WeChat, if you want to expand its scale safely and on a large scale, you need to use its commercial product.

We can observe a company that recently went public. It used social network fission to quickly increase its volume in the early days, but now it still relies on more investment to support the market. E-commerce companies can refer to Pinduoduo. In 2016, the cost of acquiring new users for Pinduoduo was 10 yuan per person, and in 2017 it was 17 yuan per person. In 2018, after Pinduoduo launched Guangdiantong and other advertising platforms, its customer acquisition cost soared to 102 yuan per person.

There are generally two types of fission batons, returning to sticky growth or investment growth.

The former is more common in building brands, relying on brands to enter the minds of users, triggering word of mouth, and creating low-cost communication. The recent rise of many domestic brands is actually aimed at awakening users' awareness of old brands in new scenarios.

Image: NetEase Cloud Music and Sanqiang jointly launched underwear

What matters more in investment is the understanding of cost and scale, whether you can take advantage of the dividends of a specific platform and go all in at the right time.

In 2012 and 2013, when mobile Internet was just beginning, it was very cheap whether buying pre-installed or downloading. There were actually two people who seized this window of opportunity and bought a large amount of shares at that time. One was Wang Xing and the other was Zhang Yiming.

Qu Kai of Chapter 42 said: I used to think that a complete cycle was from growth to destruction. Recently, I suddenly realized that many times the tail of a cycle is not necessarily heading towards destruction, but towards stability and a stock market. ”

Twitter, which recently regained the top spot in social media, proved that although the MAU of the broader market did not increase, the increase in its MDAU (monetizable daily active users) brought a new round of growth momentum to the company.

Twitter's daily active users and time spent by American users by Pan Luan "Twitter is back from the dead"

Therefore, whether it is private domain, fission or sinking market, there is no need to stick to a single concept. The growth of enterprises in 2019 has shifted from the single focus on scale in the past to the focus on quality growth now . This is actually a good thing for the big market to return to rationality.

Related reading:

1. Product operation and promotion: How to compete for traffic?

2. Community Operation丨The essence and gameplay of "private domain traffic" in 2019!

3. Product operation: 2 major ways to get started to accurately capture private domain traffic!

4. Promotion and marketing: A brief discussion on vlog’s brand marketing and traffic monetization!

5. User operation: user growth in the post-traffic era!

6. Online marketing promotion: How to spend big money? Fine-tuned operation of large traffic!

Author: Huo Huo

Source: Dragon Fire