How to make money by creating content? 3 profit models for vertical community operations!

Three profit models of vertical communities: content implantation into products; fan economy, influencers promoting products; content diversion and advertising monetization.

Xiaohongshu, Taobao, Dianping, Hema... With the arrival of the second half of the Internet, more and more "e-commerce platforms" have begun to become content-oriented. A successful content community can bring hundreds of benefits: good content attracts a large amount of traffic, greatly improves user stickiness, effectively promotes brand reputation, and so on.

It can be said that in this era where traffic is precious, content communities are the most powerful trump card for low-frequency e-commerce platforms to compete for user attention.

However, in the process of e-commerce platforms' transformation into content-based platforms, they often face the problem of profit balance - after all, compared with free content, direct sales bring higher GMV. When the original “Guess You Like” module on Dianping.com’s homepage initially attempted to switch from recommending group purchases to recommending content, the order volume also experienced a short-term decline.

Even so, major e-commerce platforms are still continuing to "contentize" because vertical content communities have a lot of room for imagination in terms of profit models.

1. Product placement in content

This practice is the first step that many vertical communities usually take when attracting traffic for e-commerce. That is: link the platform content with the products and use the content as the entrance to the products.

Related products at the bottom of the Xiaohongshu content details page

First, attract users with high-quality and interesting content. After users enter the content details page, provide a quick product entrance, allowing users to complete the closed loop from planting grass (browsing content) to pulling grass (placing orders for consumption) - this consumption scenario is seamless and reasonable.

Some e-commerce platforms often use machine learning, manual association and other means to associate content in the community that does not have its own products with related products, which is called "content structuring."

However, this profit-making approach is essentially about making content serve e-commerce . Content is just an entry point to attract users into e-commerce.

Normally, the directions of content and e-commerce are consistent; but when they are inconsistent, a series of problems will arise.

For example, in a vertical community, if some content does not have a connection point that can be linked to e-commerce, does that mean that the content has no value? For example, there are many recipe posts in Xiaohongshu, but there are no recipes in Xiaohongshu’s e-commerce system; should this part of the content be suppressed or blocked?

In fact, for vertical communities, content has its own value. Although the above consumption path is reasonable, if it damages the vitality of the vertical community in order to divert traffic to e-commerce (for example, forcibly removing high-quality content that is not related to e-commerce but is in line with the community's temperament), it would be putting the cart before the horse.

2. Fan Economy, Experts Bring Goods

The best way for internet celebrities to sell products is through Taobao Live.

According to data disclosed by Taobao, there are more than 1,200 anchors with more than one million fans, and more than 1,000 people following closely behind, with an average of more than 500,000 fans. These anchors are called "head anchors" and "mid-level anchors".

In fact, even if you are not a mid-level anchor, as long as you have more than 100,000 fans and less than 100,000 viewers for each live broadcast, you can still sell two to three thousand pieces of clothing each time. During the peak period at the end of the year, you can even sell 6,000 pieces. (Source: WeChat article "Stories of female anchors on Taobao, from pennilessness to financial freedom").

Taobao Live

This model is similar to the above-mentioned one of content implantation in products in terms of presentation form. The main difference between the two is that in the fan economy, users follow people rather than content.

After Taobao anchors or Weibo celebrities have accumulated a large number of fans through their personal charm, high-quality content, and early publicity, they can recommend products to their fans. Fans will pay for it because they recognize the content producers themselves.

Therefore, in this profit model, relying on the platform to mechanically link content and products (the so-called "content structuring") will not work.

The platform, influencers, and fans form a three-party relationship - the platform provides influencers with a good creative environment and distribution channels, influencers are responsible for content creation and commercial monetization, and fans only need to appreciate and pay.

Weibo celebrity Yang Yufan and her Taobao store

Xixi: The operating cost of fan economy is very high.

Currently on the market, only Weibo and WeChat can engage in fan economy.

Fans of vertical communities are relatively worthless - even for the popular Tik Tok and Xiaohongshu, it is not the people who attract users, but the interesting content itself.

In this type of community, users do not follow people, but follow content. The initial ecological origin of Taobao Live is also closely related to the cooperation with Weibo: Weibo Live and Taobao Live are connected to each other, and items can be added to the shopping cart and purchased and paid directly in the Weibo live broadcast room.

Among Taobao’s top 10 annual sales anchors, 9 are Weibo e-commerce experts.

3. Content diversion and advertising monetization

The most direct, main and most promising way for vertical communities to make profits is to sell advertising.

Inserting advertisements into community feeds is a common method for monetizing various content products. Toutiao, Douyin, WeChat Moments, Xiaohongshu...all well-known content products are no exception.

If advertising is well placed, it can not only be perfectly integrated with the company's own content, but some brand advertisements may even attract some traffic due to their excellent production and accurate delivery.

For example, advertisements on WeChat Moments use a format similar to original content from friends. Once posted, they often trigger a large number of likes and comments from friends.

WeChat Moments Advertisement (Image source: Internet)

When it comes to building a vertical community, the value of content is to bring in traffic - whether by attracting new users or increasing the stickiness of existing low-frequency e-commerce users. Only with the attention of high-quality users will there be room for various advertising forms such as CPC, CPT, CPM, and the value of each advertising space can be continuously improved.

How can content bring in a steady and continuously growing flow of traffic? The key is to provide long-term, core value to users. The long-term value positioning of vertical communities is another topic.

Chao Chao: During my time working at Dianping, I participated in the content transformation of Dianping’s homepage in the capacity of recommending products to the C-end users. At that time, as user products, I and some of my classmates encountered many problems, such as: whether the distribution end needs to support experts; whether content unrelated to POI should be recommended in the community; the value and priority of content structure...

These seem to be problems faced by user products, but in essence, they are all caused by a lack of thorough and unclear understanding of the business model. Therefore, when facing a product, even if it is a user product, you should find out how your product plans to make a profit - after all, only by grasping the lifeline of the business can you grasp the key to the product's sustainable survival.

Author: Chao Chao, authorized to be published by Qinggua Media .

Source: ZhaosTALK