Basic information and main features of Toutiao DSP!

There are three participants in an advertising campaign: advertising, users, and scenarios. In Toutiao , the advertising position (the Xth ad on a page), context and other scenarios are all determined by the platform. Advertisers mainly use DSP to set content related to the two entities: advertising and users.

Toutiao's advertising system was launched in mid-2014, supporting Toutiao's advertising sales of 15 billion yuan in 2017, and will support Toutiao's advertising sales of 45 billion to 50 billion yuan in 2018.

There are three participants in an advertising campaign: advertising, users, and scenarios. In Toutiao, the advertising position (the Xth ad on a page), context and other scenarios are all determined by the platform. Advertisers mainly use DSP to set content related to the two entities: advertising and users.

As mentioned in the first article, the entire programmatic advertising involves the division of labor and collaboration among various platforms such as SSP, ADX, DSP, and DMP. The media has connected with multiple ADXs, advertising networks, etc., which is equivalent to handing over the advertising space to them for sale. If the media itself has directly sold brand advertising, it is necessary to estimate the eCPM (estimated value per thousand impressions, which is equal to click-through rate x click value, representing estimated revenue) and select the highest advertisement to display.

This solution is called dynamic allocation, which means dynamic allocation of traffic , and its product form is the supplier platform SSP.

The advertising exchange ADX is responsible for selling media traffic to DSP through bidding. It usually conducts CPM settlement with DSP. The estimated click-through rate is mainly completed by DSP with more docking data, so it is very reasonable to use CPM settlement that does not involve click-through rate.

The product form that is connected to ADX and is responsible for purchasing advertisements using RTB is the demand-side platform DSP, which is the main port for advertising. DSP has multiple settlement methods with advertisers, and mainly makes money from the difference between the settlement with advertisers and the settlement with ADX. Therefore, there are high requirements for bidding and targeting. In terms of bidding, it is necessary to calculate the click-through rate and click value on the advertising side, and to bid within budget constraints.

From the surface functional point of view, Toutiao's DSP (demand-side platform) includes five major modules: business, foundation, data, tools , and tutorials.

• The business module represented by the advertising function is the core;
• The basic module represented by the account financial message system serves the entire system;
• The data module mainly based on various reports provides data support for the business;
• Tool modules focusing on functions such as targeted creative optimization plans provide additional assistance to the business;
• The tutorial module, mainly based on Today’s School, provides guidance for system operation and answers questions.

1. Basic Information

1. Roles

Toutiao DSP, namely Toutiao's demand-side advertising platform (ad.toutiao.com), is the main channel for placing advertisements on Toutiao. Its main users are people who place advertisements - that is, the demand side, including: advertisers, sales, agents, advertising optimizers , etc. Whether sales, agents or advertising optimizers, they all serve advertisers. (PS: Agents and sales will have their own backend to facilitate the management of their customers and advertisements, etc.)

Among them, sales and advertisers directly connect to understand advertisers' needs. Toutiao's sales structure is divided into three parts: KA (Key Account, referring to large customers), LA (Local Account, referring to local large customers) and SMB (Small and Midsize Business, referring to small and medium-sized enterprise customers).

The agency uses Toutiao's advertising products to serve its own clients. Advertising optimizers understand advertising and improve advertising effectiveness by improving delivery plans. Each branch of Toutiao SMB will be assigned 3 to 4 optimizers for each industry to assist clients in backend delivery.

Toutiao hopes to have fewer agents, advertising optimizers and other personnel.

In the early days, agents saved the cost of educating customers and also attracted local customer resources. More than a year later, Toutiao began to terminate contracts with agents and adopt a direct sales model. The repurchase rate of Toutiao advertisements is relatively high, and reducing agents can generate more revenue.

The existence of advertising optimizers is mainly due to the high threshold for professionalism and familiarity with the advertising delivery system. However, Toutiao subsequently enhanced the operability of the advertising delivery system, lowered the threshold for advertising delivery, and improved the effect by improving the algorithm, which greatly increased the renewal rate of old customers and allowed sales personnel who understood the needs to take on the task of advertising delivery. (PS: This shows that advertising optimizers who work for a single media outlet are in an awkward position. Understanding multiple advertising/traffic acquisition platforms is the core competitiveness of advertising optimizers.)

2. Ad location, creative type and payment method

Ad location, material type and payment method are three conditions closely related to the advertising product, which respectively determine the display scenario, display format and billing method of the advertisement.

These three are varied in Internet advertising , and they are mainly manifested in the following ways in Toutiao:

(1) Advertising positions: Information Alliance opening screen, Information Alliance information flow , Toutiao information flow, Toutiao details page, Toutiao opening screen, Neihan Duanzi opening screen, Neihan Duanzi information flow, Huoshan Short Video information flow, Tik Tok information flow , Xigua Video information flow (PS: Say goodbye to Neihan Duanzi~).

(2) Material types: vertical video, horizontal video, vertical large image, horizontal large image, small image, group image, and animated image.

The types of materials supported by different ad slots under bidding ads (the material type is closely related to the ad slot scenario)

(3) Payment methods: CPT, GD, CPC, CPM, CPV.

• CPT: CPT in Toutiao means Cost Per Time, which means charging advertisements by duration, and covers a certain period of time in a certain advertisement slot.
• GD: Guarentee Delivery, guaranteed delivery advertising, priced according to CPM, the media will guarantee a certain amount to the demand side (advertisers, etc.);
• CPV: Cost Per View, which is charged based on the number of effective 10-second playbacks. That is, if a user watches an advertising video for 10 seconds, it will be counted as 1 CPV.

3. Toutiao’s advertising products

The advertising products of Toutiao DSP include: splash screen ads, information flow ads , splash screen syndication, video ads , and information alliance. An advertising product includes advertising location, material format and payment method. Different combinations of advertising location and material format will result in many advertising products, making it difficult for sales and customers to know where to start.

Therefore, we propose to package several distinctive advertising products for sale, which will be particularly helpful for customer communication and understanding after productization.

In fact, at the system level and in the delivery process, there is no essential difference between different advertising products. However, when setting up ad groups, ad plans, and creatives during the delivery process, different settings can combine to create different advertising products.

For example: for the splash screen advertising product, select "Information Alliance" in the "Publication Scope" of the advertising plan, and select "Splash Screen" in the "Creative Material" of the creative.

(1) Splash screen ads

A splash screen ad is an ad format that is loaded when the app is opened and displayed for a fixed time (3 seconds for static, 4 seconds for dynamic, 5 seconds for video). After the display is completed, it automatically closes and the app is directed to the main page.

Advertisement location: mainly includes headline opening screen, joke opening screen, and headline video opening screen.

Sales method: Toutiao opening screen and Toutiao video opening screen support two sales methods: CPT and GD. The joke opening screen supports CPT sales method.

(2) Information flow advertising

Information flow ads are a type of native ads that allow users to read ads like reading advice. If advertising is combined with users and scenarios, better results will be achieved.

Advertising locations: recommended channels, local channels, video channels, and joke information streams.

Material form: large pictures, small pictures, picture sets, videos (within 10 minutes in length).

Promotion purpose: landing page , app download, phone call, headline article, etc.

Payment methods: CPT, GD, CPC, CPM.

(3) Open screen broadcast

By utilizing the resources of the information alliance, advertisers’ ads can be distributed to the opening screens of applications in the information alliance, providing strong exposure and wider coverage, making it suitable for brand placement.

Payment methods: CPT, CPC, CPM.

(4) Video Advertising

Video advertising is presented in the form of a short video. Short videos are more attractive than pictures and texts, but the production cost is higher.

Ad location: opening screen video, information flow video, and detail page video.

Material form: large pictures, small pictures, picture sets, videos (within 10 minutes in length).

Promotion purpose: landing page, app download, phone call, headline article, etc.

Payment methods: CPT, GD, CPC, CPM, CPV.

(5) Information Alliance

Toutiao cooperates with various mobile phone manufacturers and well-known APPs to output advertisements while outputting information content, similar to an advertising alliance . In other words, inserting advertisements into the headline information flow of other apps that cooperate with Toutiao is basically the same as information flow advertising, and is suitable for forming economies of scale.

2. Main features

After introducing the basic information, let’s first summarize several features of Toutiao DSP. These features may not be felt in the subsequent functional product analysis , so they are written in the front.

1. Updates are fast

Toutiao’s DSP was launched in mid-2014 and is updated every five days on average. There are more than 240 update messages in the news, which shows how fast its iteration speed is.

The functions were quickly expanded to five major modules: business, infrastructure, data, tools, and tutorials, and multiple subsystems such as CRM, website building, and DMP were derived. It provides product support for business expansion and improves advertising effectiveness through functions, which is of great help to customer renewal.

In comparison, the iteration of Tencent's social advertising DSP product is very slow. Perhaps it is because integrating the advertising spaces of different business units consumes most of the energy.

However, with the rapid updates and iterations, a problem has also been exposed - chaos.

The interaction design is messy, and the interaction styles of two things in different places are inconsistent. The nouns are confusing, and the same thing has many different names.

The "chaos" problem has been improved a lot after multiple iterations in February and March. Moreover, for 2B products such as advertising products, the most important thing is commercial value such as effects, rather than things like interactive nouns. Its merits outweigh its flaws, and Toutiao DSP is still a very good product that is worth learning from.

2. It’s more about the original intention than the original presentation

Information flow advertising is native advertising in itself, and Toutiao’s information flow advertising, as the leader among them, has brought the display of nativeness and intent to its fullest potential.

(1) Show originality

Only Neihan Duanzi has GIF ads, because GIF ads are very consistent with the tone of Neihan Duanzi. Tik Tok only allows for horizontal and vertical videos, in the hope of not destroying Tik Tok's user experience from the beginning. These two types of videos are also more in line with Tik Tok's tone, and these are exactly the manifestations of the original nature.

(2) Intent Native

Intent native is mainly manifested in Toutiao as crowd targeting technology. The product that carries this technology is DMP (data management platform). The user tags in DMP are all derived from Toutiao’s recommendation system.

Mining user tags based on content analysis is the cornerstone of the recommendation system, and user tags can be applied to DMP. (PS: Toutiao’s ADX and DMP are also linked, so its ADX can output estimated CTR information to the connected DSP.)

DMP is mainly used for crowd calculation, and advertisers can deliver ads to the calculated crowds. In addition to DMP, there is also a simpler target audience setting in the advertising plan settings.

(3) DMP data management platform

DMP includes two functions: crowd management and tag management, covering demand-side data, advertising effectiveness data and media data. In crowd management, crowd packages are created to merge, cross, and exclude crowds.

Crowdpacks come from three sources:

• One is to actively upload the crowd package, encrypting and uploading the IMEI, IDFA, mobile phone number, etc. corresponding to the crowd to the DMP, which is the demand-side data;
• The second is the rule-based crowd package, which sets rules for advertisements, industries, and creatives to find people who are interested in these, and is the advertising effect data;
• The third is to select the tag generation population in tag management. Tags include application targeting tags (people who have installed certain applications), Toutiao fan tags (fans of certain Toutiao accounts), and geographic location tags ( cars , travel, education). These are all mined by Toutiao on its own platform and are media data.

Whether it is the geographic location tags in the DMP, the interest categories and keywords in the advertising plan settings, or various creative word packages, they are all closely related to Toutiao's recommendation system. Toutiao's recommendation system mines user tags based on content analysis, which is the cornerstone of the recommendation system. User tags can be applied to DMP.

(4) Recommendation system

The essence of a recommendation system is to solve the matching between content, users, and scenarios, just like computational advertising, which essentially solves the matching between advertisements, users, and scenarios (the core issue has been discussed in the previous article). Fitting a function of user satisfaction with content requires three dimensions of variables xi: user, xu: scenario, and xc: content, and the function y=F(xi,xu,xc), which is a classic supervised learning problem.

At the model level, the same powerful algorithm recommendation system is used, but the model architecture will be adjusted according to different business scenarios.

At the feature level, there are four main features that affect the recommendation system, namely: relevance features (evaluating whether the attributes of the content match the user), environmental features (geographic location, time, etc.), popularity features (global popularity, category popularity, etc.), and collaborative features (collaborative recommendations for similar users).

Among the various features, there are many that are related to content and user interests. Where do these features come from? Derived from text analysis, video analysis, and image analysis.

There are three main application directions of text analysis: user interest modeling, auxiliary content recommendation and generation of channel content. Text features are mined through text analysis, including explicit semantic label classes and implicit semantic features.

Explicit semantic tags are defined by humans. Each tag has a clear meaning and is used for user profiling , filtering channel content, recommendation recall, and recommendation features. They require full coverage but not high accuracy.

Implicit semantic features include topic features and keyword features.

• The topic feature belongs to the concept system and is a description of the probability distribution of words. It has no clear meaning and is used to filter channel content, tag search, and recommendation recall. It does not require full coverage and is responsible for expressing relatively precise and abstract information.
• Keyword features belong to the entity system and are descriptions based on unified features. There is no clear set and they are also used to filter channel content, tag search, and recommendation recall, as long as they cover the popular entities in each field.

3. Bid for premium traffic, not residual traffic

On Toutiao, whether you use non-programmatic advertising or programmatic advertising, you have the potential to compete for Toutiao's high-quality traffic. Many students may have questions. Toutiao DSP already supports RTB, GD, CPT and other modes. Why do we need to emphasize that each mode is equal? ​​Are these modes generally unequal?

In reality, these types are indeed unequal in most media, and there are priorities between transaction models.

Let me first share with you some knowledge about transaction models. In the first article in the series, I only talked about the various forms of programmatic advertising, including RTB, PA, PDB, PD, etc., without going into detail about the characteristics of each. Let me explain in detail below.

The main differences between the transaction modes of RTB, PA, PDB and PD are whether the quantity is guaranteed and whether the price is guaranteed. Quantity guarantee means guaranteeing the quantity of delivery, and price guarantee means negotiating a fixed price for trading, as shown in the following table:

It can be seen that among these advertising models, the higher the price, the higher the entry threshold for advertisers, the better the quantity and price guarantee benefits for advertisers, the higher the scale and quality of advertisers, and the more brand advertisers. After all, brand advertising follows the marketing plan and is planned half a year or a year in advance. It is impossible to participate in models such as RTB where bidding may not be possible. Ultimately, the only ones participating in RTB are the remaining small amounts.

Toutiao is equivalent to putting high-quality traffic on the market for all kinds of advertising models to bid, and there is no question of giving priority to anyone in terms of traffic. Of course, it is also possible to adjust the algorithm for high priority to make their eCPM slightly higher, thus giving them a small advantage.

4. The main oCPC pricing payment model

When introducing various platforms above, it was specifically emphasized that DSP makes money by the price difference and accurately estimates eCPM. Profit space can be obtained by bidding according to eCPM. In terms of bidding, DSP must calculate the click-through rate and click value of the advertisement, and bid within the budget constraints.

If the advertiser chooses CPC and CPA, the system will convert it into eCPM for bidding:

eCPM=1000XpCTRXCPC=1000XpCTRXpC VR XCPA

pCTR refers to the expected click-through rate ( clicks /impressions), and pCVR refers to the expected conversion rate (conversions/clicks).

What is Toutiao’s oCPC?

It is Optimized Cost Per Click, which is a click-through bidding method optimized with target conversion. The system displays ads to users who are most likely to convert, and finally settles the bill based on clicks.

For advertisers: Compared with CPC, the conversion rate of oCPC is definitely higher under the same pricing method, because CPC does not take subsequent conversions into account. Compared with CPA, which is only open to SMBs (small and medium-sized customers), oCPC, which is open to all advertisers, is obviously more advantageous.

For Toutiao: the more accurate the evaluation, the higher the conversion rate, the better. The most suitable traffic is given to the most suitable advertisements to achieve the optimal platform.

The author of this article @Vency compiled and published by (Qinggua Media). Please indicate the author information and source when reprinting!

Product promotion services: APP promotion services, advertising platform, Longyou Games