Why is WeChat far less profitable than Facebook?
|
An interesting data is that in the third quarter of 2016, Tencent's performance advertising accounted for nearly 60% of its advertising revenue. However, although Tencent’s performance advertising increased by 83% year-on-year, it declined month-on-month (from 46% in Q2 to 20% in Q3). Considering the 10-second short videos recently updated on WeChat and the feature that allows users to share videos in their photo albums in Moments, it can be seen that the graphic information flow and the public account promotion at the bottom of WeChat alone can no longer support Tencent's demand for high growth in advertising revenue. Facebook, which started testing 15-second video ads as early as 2013, had 97% of its revenue in the third quarter come from advertising. In comparison, Tencent still has great potential. So what problems does WeChat face in commercialization, and how can it learn from Facebook? This article may provide some insight. The launch of WeChat’s 10-second short video function has made many people exclaim that “mobile video advertising is about to reach an explosion point”, as if the 10-second “big video” was not created for users, but for advertisers and self-media . In fact, among the mainstream media platforms at home and abroad, WeChat can be said to be the most restrained in introducing short videos (in the words of WeChat product manager : imagine that the circle of friends is occupied by various girls’ selfies). However, the great success of Facebook, Instagram and others in video advertising finally allowed Tencent to overcome its timid concerns about user experience. WeChat's "gold-digging" ability is far from Facebook's. As many people have noticed, advertising accounts for an increasingly important portion of Tencent's revenue, jumping from 12.16% in the first quarter of 2015 to 18.44% in the third quarter of 2016. The rapid growth of Tencent’s advertising revenue is mainly due to the “closing of the net” of WeChat commercialization. This can be seen from the outstanding performance of performance-based advertising ( friend circle advertising , public account advertising): in the first quarter of 2015, performance-based advertising was still blank, but a year later it had exceeded the revenue of brand advertising. By the third quarter of 2016, performance-based advertising had accounted for nearly 60% of advertising revenue. However, although Tencent’s performance advertising increased by 83% year-on-year, it declined month-on-month (from 46% in Q2 to 20% in Q3). However, compared with Facebook, whose 97% of revenue in the third quarter came from advertising, WeChat advertising 's gold-digging ability still has considerable room for improvement. Also in the third quarter of 2016, Facebook's revenue has increased by more than 50% year-on-year for four consecutive quarters, with advertising revenue reaching 6.816 billion yuan. What is even more enviable in the industry is that Facebook's AR PU in North America exceeds US$14. In comparison, foreign media estimate that WeChat's ARPU is only US$7, which not only includes the contribution of advertising, but also the "one app rules all" model, with payment, life services, and social games flourishing in multiple areas. Judging from the number of advertisers, Facebook already has more than 4 million active advertisers worldwide, most of whom are long-tail, local advertisers with advertising spending of nearly a few hundred dollars. This shows that Facebook has created an advertising ecosystem that has grown from small pieces of sand into a tower. WeChat only launched local advertising in Moments in September. According to data revealed by WeChat, more than one thousand restaurant brands have placed local promotional ads in more than two months. In addition, the advertising in Moments is still dominated by big brands. In terms of the long tail and sophistication of advertisers, there is still a considerable gap between WeChat and Facebook. Without optimized information flow, it is difficult for Moments ads to be a big success. Facebook's advertising business has two major growth engines - native ads in Newsfeed and mobile video ads (in March this year, Facebook abandoned its DSP bidding product and focused more on native and video ads). As the inventor of Feed Ads, Facebook has been constantly exploring information flow ads . By constantly improving Edgerank (the name given to Facebook Newsfeed's fresh news ranking algorithm), it has enhanced user stickiness and gradually improved the "nativeness" of information flow ads (reducing the sense of disobedience). For this reason, Facebook "brazenly" disrupted users' timelines as early as 2012, despite the joint opposition of users. In contrast, although the "signal-to-noise ratio" of the Moments is constantly declining and information overload is overwhelming users, WeChat has still done nothing to optimize the information flow. It has not even started to prioritize dynamic displays based on friends' intimacy and interaction rate, let alone push content that users care about based on user behaviors such as likes, comments, and shares. This year's "hot articles in circle of friends" seem too cautious because they are too deeply hidden. If this continues, the "stickiness" of the circle of friends will inevitably continue to decrease, and the effectiveness of information flow advertising will be difficult to guarantee. The difference in the "control" of information flow between Facebook and WeChat Moments is related to the fact that one is an open personal homepage and the other is a private message box. Facebook can legitimately reduce the exposure frequency of Instant articles (by giving priority to personal updates). Apart from cracking down on public accounts that induce sharing, WeChat has no right to interfere with the "screen-flooding articles" that annoy many people, because these come from users' personal sharing. Compared to WeChat, Weibo, which is similar to Facebook, has already made changes to its information flow. While increasing user stickiness and usage time, it is also paving the way for information flow advertising. The "difficult birth" of mutual selection advertising shows that it is difficult for WeChat to control the "monetization" of self-media. In March this year, Facebook unexpectedly stopped the DSP bidding advertising project that it had been testing for half a year. It was said that due to the astonishing number of false advertisements and robot traffic, the invalid traffic was as high as 75%. After WeChat cleaned up and rectified the "brushing" activities of public accounts at the end of September, it quietly tried out mutual selection advertising in October, giving advertisers and self-media the opportunity to be frank and accurately select each other in addition to Guangdiantong . Before this, big brands that wanted accurate and high-quality advertising and large self-media accounts that had a say and were willing to actively select advertisers could only choose third-party platforms such as Weibo and Xinbang for mutual selection. Big WeChat accounts such as Yitiao, Zhanhao, and Shidian Reading were thus "recruited" into WeChat's advertising system. Some people joked that WeChat mutual-selection ads are the "savior of those who don't know how to write twist ads", which inadvertently revealed a message - the mutual-selection ads that appear in the form of banners under public account articles are not native ads (Wikipedia's definition of native ads is: advertisers catch the user's attention by providing valuable content. It is a form of Internet advertising that "is a paid advertisement but tries to look like normal content") . Although the previous DSP model of Guangdiantong claimed to be native advertising, until the upgraded version of mutual selection advertising, it was still far from native advertising. The articles in the official account are not relevant to the advertisements below, and the advertisements are not effective information for users. The click-through rate and conversion rate cannot be guaranteed. (In fact, advertisers can only make requirements on the exposure of self-media articles and settle accounts based on the achievement of the promised exposure). This form of CPM advertising should be considered as brand advertising rather than performance advertising because it only promises exposure, not results. In contrast, advertisers would rather have Yitiao, Xiaogu Chatting about Painting, Liushenleilei and others "tailor-make" original content (such as the magical twist) for them. In fact, the first batch of apps selected by WeChat for internal testing, such as Zhanhao, FitTime, and Yitiao, only released Mercedes-Benz mutual selection ads on that day, and no mutual selection ads have appeared since then. Mutual selection advertising has not yet been officially launched. Perhaps WeChat has still not figured out how to balance user experience and advertising effectiveness in official accounts and realize true native advertising. The advertising strategy of Facebook Instant Articles, which is accused of imitating WeChat official accounts, can be used as a reference - the media can embed customized ads and obtain 100% of the advertising revenue, or they can embed ads through the Facebook platform and pay commissions. Well-known media such as Business Insider and The VOX have chosen to keep important advertisers in their own hands, give them priority, and then hand over the remaining advertising space to Facebook. Compared with the public account system that "parasitizes" on the WeChat "local area network", Instant Article is just a "shell" created by Facebook for external news websites. However, Facebook’s control over Instant Articles exceeds WeChat’s control over public accounts. In June this year, Facebook announced that it would push more content posted by family and friends and lower the priority of News Feed. The traffic directed by Facebook to news media showed a double-digit decline, with The New York Times falling by 25% and Business Insider falling by 28%. This is Facebook's conscious "de-mediation" and return to its social roots. Because in the first half of 2015, while the number of daily active users continued to increase, the number of personal updates posted by Facebook users fell by 21%. According to Weibo CEO Wang Gaofei's estimate: on Facebook's timeline, media content accounted for 5%-10% two years ago, but now it has reached 30%. WeChat also faces the problem of its Moments being flooded with self-media articles, which are competing for attention with information flow ads. Since these articles are actively shared by users, WeChat has no right to reduce their weight. WeChat also has no right to interfere with those "human forwarders" that cause trouble to friends. The circle of friends has gradually fallen into a spiral of silence - the active ones become more active, and the silent ones become more silent. As for the commercialization of WeChat, the monetization method of this part of traffic is in the hands of the public account operators , who prefer e-commerce , paid knowledge communities , native advertising and other revenue methods (after all, self-media is not bound by journalistic ethics like the New York Times). Therefore, WeChat public accounts are "traffic black holes" in the circle of friends, squeezing out the traffic of personal status and information flow advertisements. In addition to cracking down on induced sharing and exposure of fake reading volume, it is difficult for WeChat to manage this part of the traffic and incorporate it all into Tencent's social advertising system. If short videos want to explode, WeChat must be more open. Last month, Zuckerberg reiterated his "video first" strategy to investors and "borrowed" new weapons from Snapchat's video arsenal, including masks and video filters. WeChat, on the other hand, has been much slower in moving forward, having only just provided photo editing functionality to its users. Facebook officially opened the Facebook Live feature to ordinary users in April this year, marking live video as the core of Facebook's video strategy. At the fourth quarter earnings conference earlier this year, Zuckerberg revealed that users watch more than 100 million hours of videos on Facebook every day, and half of the 1 billion users who log in to Facebook every day will see videos. This is thanks to active video publishers such as media, celebrities and brand companies. In contrast, WeChat only recently allowed the uploading of 10-second videos in the background, and the live broadcast function that everyone speculated about has not yet been launched. WeChat’s positioning for short videos is short video + live broadcast (pull down to shoot, record the beautiful moments of life, close to live broadcast). The vague positioning and the limitations on length and editing have meant that the Moments are not dominated by short videos. More importantly, the main video producers such as media, celebrities, and institutions have no way to achieve large-scale dissemination beyond a closed circle of friends. In the absence of professional video producers and video dissemination chains, it is no wonder that short videos have not become popular in the circle of friends. Weibo has become the biggest beneficiary of the video and live broadcast dividends thanks to its open communication mechanism, fan and interest aggregation effects, and the increasing priority of video in information flow optimization, thus making a strong comeback this year. Although WeChat has begun to elevate videos to a strategic level and is about to introduce a video forwarding mechanism. However, the main force behind the WeChat short video craze today is still self-media, and their short videos have to be packaged in public accounts, making it difficult to play them directly in the information flow like Facebook. The previous H5 trend was actually everyone trying to break through the "shell" of the official account, but direct playback was still not possible and still required a jump. With the launch of 10-second short videos, WeChat Moments ads will quickly become "video-based", and the upcoming mini-programs will also help media, organizations, and businesses break through the limitations of public accounts and achieve direct presentation and more effective dissemination in WeChat Moments. However, once short videos in Moments can be forwarded, it will break through the product boundaries of WeChat, and the private Moments will become a more open square. WeChat will certainly be extremely cautious when taking this step. However, in order not to fall behind in the era of video and live streaming, and to take advertising revenue to a higher level, WeChat has little time left to weigh the pros and cons. Mobile application product promotion service: APP promotion service Qinggua Media advertising The author of this article @张远 is compiled and published by (Qinggua Media). Please indicate the author information and source when reprinting! |
>>: UN to allocate $9 million to Lebanon (full text)
Recommend
Growth activity promotion matrix for online education!
Online education has developed rapidly in 2020 an...
How does Kuaishou Store analyze material data? Where to analyze?
Let me introduce to you the part about material d...
The most comprehensive and in-depth Zhihu traffic marketing encyclopedia
Did you know: What kind of brands are suitable fo...
Practical operation! How to promote APP and acquire users?
Everyone who works in the Internet industry needs...
How to gain millions of followers? These 9 Douyin Blue V big account operation secrets are revealed
When TikTok becomes a standard for corporate mark...
Adidas vs. Tencent Games, which one is better in fancy marketing?
The daily life of an internet person: when I open...
Tips for attracting new users on Pinduoduo APP!
This article is an analysis of Pinduoduo's ca...
Marketing promotion methods | How to create private domain traffic?
Friends from different industries asked them how ...
Baidu Mini Program data, how to view traffic data of Baidu Smart Mini Program?
Smart Mini Program developers can use the data in...
How to adjust the high cost of bidding ocpc? Done in 4 steps!
How to adjust the high cost of bidding ocpc? When...
HR Practical Analysis Member Baidu Cloud Download
Human Resources Practical Analysis Member Resourc...
What are the functions of Foshan Nail Salon WeChat Mini Program? How to make a manicure appointment app?
The love of beauty has existed since ancient times...
Analysis of competitive products of short video products
With the development of the Internet, the short v...
How to make birthday greetings for African children?
Videos of African children holding up signs to se...
How much does it cost to customize a dance school mini program in Huainan?
The main factors affecting the price of mini prog...