Traffic is becoming more and more expensive, how can we still invest in information flow advertising?

There is no need to say that traffic is becoming more and more expensive. I believe that many brands that have placed online advertisements have experienced this deeply.

The following chart (Cost of New Customers in E-commerce in Recent Years) clearly shows how fast traffic prices are rising:

Since 2016, Alibaba's cost of new customers has doubled compared to the previous period, and JD.com's cost of new customers also doubled in 2017.

In 2019, we learned from a mainstream e-commerce promotion department that this year's new customer cost target for information flow advertising (definitely lower than the actual cost) has been relaxed to 300 yuan. It is conceivable that the drastic increase in traffic prices has forced these big sponsors to accept reality.

Some people would say that the e-commerce industry was saturated a few years ago, and now it is a competition in the "existing market", so the competition for new users will become increasingly fierce.

Having said that, as far as the industry's online traffic is concerned, expensive is a major trend : when the cash loan business was booming in early 2017, the cost for cash loan companies to acquire registered users through information flow advertising was only around 2 yuan. By the end of 2017, it had risen to more than ten yuan. By the first half of 2018, the cost of registering users for information flow advertising had exceeded 30 yuan, and it is expected to be a minimum of 35 yuan in 2019.

The cost of the cash loan industry has doubled in just over a year, and similar situations have been repeated in many industries, forcing many brands to accept increasingly expensive online traffic. Especially for some C-end products, such as consumer finance, education, and traditional e-commerce companies, the amount of traffic they introduce will directly affect the company's performance. It can be said that today’s online traffic prices are becoming an increasingly heavy burden for companies.

Traffic is becoming more and more expensive, but brand development also depends on traffic. How should information flow advertising be delivered in 2019?

1. Brands need to understand the reasons

——Why is online traffic becoming more and more expensive?

There are three main reasons.

1. In the stock era, the growth rate of Internet users slowed down, the Internet dividend period faded, and the remaining new traffic was scrambled for

In fact, it is very easy to understand. The more mature an industry is, the more people have become users. The later stage is actually the re-maintenance and competition for existing users. The increase in new users cannot keep up with the demand of existing industry companies. The industry has entered the era of stock, "scarcity makes things valuable", and the price of traffic has risen accordingly.

2. Big money sponsors buy traffic and raise traffic prices

It is said that rich people "buy houses like buying vegetables". In the field of information flow advertising, the same is true for the "wealth" of big sponsors.

For example, a leading e-commerce platform had an 18-year budget of hundreds of millions for just one channel, and half of it was spent on several e-commerce festivals. Every time an e-commerce festival came, it would shout: "Spend, spend, and spend more, it must be spent!"

Other brands that are unable to compete can only get a small piece of the pie at a high price, and the prices go up like this.

3. Information flow platforms raise prices in disguise

The first two reasons are easy to understand, after all, relevant information can be heard from many channels, but the last reason is relatively secretive.

To give a simple example, Toutiao’s information flow advertising took down its OCPC function in mid-2018 and replaced it with OCPM. The biggest difference between the two is that OCPC charges by click, while OCPM charges by exposure.

The disguised price increase is that: in the past, users were charged only when they saw and clicked on the ads, but now they are charged as long as the ads appear on their phones:

Although the price per exposure is certainly not as high as the price per click, the exposure volume is huge. The rising CPM (cost per thousand impressions) is difficult to reverse.

Douyin is a phenomenal product in 2018. Douyin advertising has become the focus of competition for many brands. In less than half a year since its launch, Douyin’s CPM has doubled. For the same 1,000 exposures, the price doubles, which significantly increases the burden for many small and medium-sized brands.

2. How to invest in information flow in 2019?

In 2019, it is a general trend that traffic is becoming more expensive. After all, there is inflation, so how can traffic not be expensive?

It is more desirable to deeply explore the value of each incoming traffic. After all, the scale of online advertising is relatively large, including search advertising and information flow advertising. We can't just stop eating because rice is expensive. There is still a lot of room for information flow advertising.

However, there is still room for discussion on how to place information flow ads.

1. Deeply cultivate major information flow platforms

Many brand owners think that "if the East is dark, the West will be bright", and when the traffic on large platforms becomes expensive, they switch to more numerous and smaller platforms. However, the actual situation will tell business owners that it is not cost-effective.

In addition to the adaptation costs of switching to a new platform, the new platform often has a smaller user base. The brand cost will look good at first, but the traffic ceiling of a small platform is very low, and the cost increases at a rate far exceeding the growth rate of a large platform. In the end, you will find that the costs are almost the same.

A major advantage of large platforms is that products are updated very quickly, and there will be more and more traffic channels to choose from.

Let’s take Toutiao as an example. At the beginning of 2017, Toutiao’s information flow channels only had two apps, Toutiao and Neihan Duanzi. By the middle of 2018, except for the aborted Neihan Duanzi, Toutiao still had several products with DAU of hundreds of millions, including Toutiao, Douyin, Xigua Video, and Huoshan Video, not to mention its alliance product “Pangolin”.

Large platforms have invested heavily in the commercialization of their resources, and will develop more and more new products. In addition, they have mature advertising algorithms and vigorously sponsor mainstream media programs to introduce new users to their products. All these factors make it worthwhile for large information flow platforms to delve deeper.

2. Adapt to new ways of playing information flow advertising

When talking about new ways of playing in information flow advertising, we have to mention the hit product of 2018 - TikTok.

The emergence of TikTok suddenly pushed information flow advertising from "pictures + text" into the era of short videos. In fact, within Toutiao, Xigua Video and Huoshan Video were commercialized earlier, and short video ads have been vigorously promoted, but there has been no progress due to the limited user scale of the two. It was not until Douyin became a phenomenal APP that the commercialization of short video ads began to accelerate across the board.

It goes without saying how popular TikTok is. Many individuals and brands use TikTok videos to quickly stake out territory and grab users. The earlier brand owners enter the market, the more benefits they will gain.

There was news that Douyin would start commercialization in March 2018, and then some brands in some industries began internal testing of advertisements in April and May. By the time these early adopters figured out the "explosive mechanism" behind it, when Douyin advertisements were officially launched in full in the middle of the year, those early adopters had already left other advertising brands far behind. As for brand owners who joined a few months later, they would find that the market had become a red ocean and traffic was too expensive to grab.

Therefore , in 2019, brands must adapt to the new ways of playing in information flow advertising . Whether it is short videos, interactive landing pages, or deeper data docking, the sooner these new features are tried, the more advantages they will have.

3. Maintain an interesting appearance and in-depth and effective content

The first two points mentioned the choice of platform and gameplay, but the real way for users to contact the brand is still through pushed advertisements. Therefore, the “appearance” (display content and form) and “content” (how the page attracts users) of the advertisement are the basis for judging whether it is effective or not.

An interesting appearance , as the name suggests, the content and form of presentation are very important. An advertisement that is not attractive enough will fail the moment it is pushed out.

Being interesting doesn’t just mean the content is interesting; creative form is also an integral part of being interesting . How to make appearance interesting is a commonplace topic, and there are too many ways to do it on the Internet. What is emphasized here is that continuous fun is the most important core of a brand.

A simple statistics was done: in information flow advertising, the shelf life of a picture advertisement is only about 3 months; and the shelf life of a video advertisement is even shorter, only about 1 month. In other words, only by continuously launching interesting advertisements can a brand maintain its advertising effect.

The more expensive the traffic is, the more valuable it is to cherish every bit of traffic that comes in. Don’t waste it, and keep it!

The second is in-depth and effective content. Among the brand owners I have met, many are very concerned about the click price and exposure times of advertisements. It’s not that these clicks and exposures are not important, but that brand owners need to pay more attention to in-depth and effective content.

For example, when a credit card advertisement is promoted, the data that may be obtained include exposure, clicks, phone number, user identity information, work information, etc. Identity information and work information are definitely the most important to banks, and are essential for applying for credit cards. However, many banks use telephone information as the only monitoring point for advertising effectiveness during the promotion process, resulting in advertising optimization actually focusing on "collecting more user numbers", which is irrelevant.

How to be in-depth and effective? This involves the monitoring position of the landing page content and the advertising platform. Simply put, the content has pain points, and the monitoring is more in-depth, so that the expensive traffic that comes in through layers of screening can retain the information that the brand needs most in the in-depth process.

4. Multiple information flow channel combinations

It’s an old story. Many brand owners know that they need to expand their promotion channels. It’s best to try Toutiao, Baidu, WeChat Moments, NetEase, etc. The reason why the combination of multiple information flow channels is mentioned is not because it is novel but because it is important.

Moments is based on the Tencent system, so it is the best choice for promoting public accounts and mini-programs; Baidu search is well-known, and even Baidu information flow advertising has search advantages, which are difficult to match by other platforms; Toutiao's algorithm is outstanding and unique in data tracking and function development; on platforms such as Zhihu , young people's brands that emphasize characteristics, uniqueness, and personality are more suitable.

This diversified channel combination will help alleviate the cost issues caused by rising traffic prices in a single channel.

end

Once brand owners have managed the main information flow platforms and tried various new features and new ways of playing, attracting traffic will not be a big problem.

If the data monitoring and feedback methods of advertising can be further adjusted, the value of traffic can be maximized. I believe that information flow advertising will still be unexpectedly useful in 2019.

Source: Bird Brother's Notes