The profit margin of Internet traffic is becoming narrow

Poor advertising effect

It’s not good. It’s so bad that you basically can’t invest in small companies. This is the truth.

People in charge of Internet finance companies often ask, what promotional resources are available?

Answer: Baidu, Toutiao , Guangdiantong , DSP, and Wangmeng . . . . The other party immediately replied: It doesn’t work.

Another answer: There are plenty of third-party online lenders. . . The other party replied: No way.

Another answer: Wait, there are also self-media and internet celebrities . . . The other party replied: It still doesn’t work.

So, we can’t invest online at all? We can’t even invest in this kind of cheap advertising, let alone expensive brand resources. Needless to say, offline, users’ attention is lost and it is extremely expensive.

If you ask me to summarize the reasons, in one sentence, there is no huge profit margin in this matter.

This sentence can be applied to almost all business matters.

For example, last year many people funded Internet finance companies and made a fortune every day. But not this year. There were also people who used the webmaster's resources to attract traffic when Jiedaibao was being promoted, and made commissions of millions. But after this period, it also disappeared.

I have a friend whose boss opened a training institution, invested more than 100,000 yuan, made 500,000 yuan in a year, and then opened four branches. The boss is a woman with no academic qualifications, no special skills, and very few resources and money at her disposal. Why was she able to succeed in such a short period of time? Generally speaking, if a loser wants to succeed, even if it means suffering, it is difficult to do so in a short period of time. For example, if you, a loser working in the Internet industry, want to open a successful restaurant, you need to first set up a stall in a science and technology park and sell hot dry noodles. After you have figured it out and made some money, you can consider opening a small store. Once that is done, you can open a larger, formal store.

The key to the success of Diaosi in a short period of time is that this business has huge profit margins, a true blue ocean, the market is in rapid growth, but the competition is not fierce. It just so happened that the training industry segment that this boss was in met this requirement, and some of her competitors who opened businesses at the same time as hers were also doing very well.

When something is in a huge profit margin, almost all participants will enjoy the dividends.

If the advertising effect is not good, the traffic will decline from the bonus.

Whether it is a big brand, a small brand, or a product without a brand, the effect of investing in Internet advertising in the early stages is very good.

But now, no brand is definitely not okay, small brands are not okay either, big brands are okay.

Why? When there is no huge profit margin in this matter, losers can't do it, but the tall, rich and handsome people can.

Business is essentially a competitive relationship. When the profit margin is large and the market environment is good, all participants will make a profit. This is called the first batch of people to try it out. Of course, the second batch may also be very happy. When the profit margin is small and the market environment is bad, most participants will suffer losses or will be unable to continue participating. A few competitive players will continue to make profits but will also be affected by the overall environment.

Applied to advertising, small brands cannot invest in Baidu or self-media. Big brands can rely on brand traffic and brand conversion power for support. What's more, big brands have higher commercialization capabilities and can tolerate higher advertising costs. You can't afford to spend 1,000 yuan to acquire a customer, but Taobao says that I can make my investment back by spending 2,000 yuan to bring in one user.

This also explains why small brands say that they cannot invest in Internet advertising, but the unit price of Internet traffic has not dropped, because the traffic that you are not buying is being received by big brands. What's more, there are more new apps entering the market, and after they get financing, they will drive up the price of traffic.

So I want to say that the profit margins of Internet traffic are becoming narrower. If the loser players who originally made profits through Internet traffic have not yet grown into tall, rich and handsome men, then they need to shift their positions. At least you need to change to other routines, such as social marketing and content marketing .

The role of traffic in the Internet industry

Internet traffic represents the users' online attention, which is the foundation of Internet business. Without the users' online attention, there will be no prosperity of Internet business.

But the disappearance of the traffic dividend does not mean that Internet traffic will not grow, it will just slow down.

In some areas where the Internet is not widely used, there will be dividends from segmented traffic, and there will be huge profit margins. As long as you participate, you will basically make a profit.

This is what is called the general trend. If you follow the trend, you will achieve great things.

In fact, there has never been a standard definition of whether the price of traffic is expensive or not. Whether in the early days or now, all kinds of media have a high degree of fraud, whether it is a search engine or news media, including various DSPs now, they will use machines to brush clicks, and the degree of fraud is generally above 30%. But this does not mean that these media cannot be invested in. From a moral point of view, this is dishonest and is also the tragedy of vicious competition in the industry. But from a commercial point of view, as long as there is a huge profit margin, it is a mistake not to participate in this feast in time.

From another perspective, when profit margins become narrow, improving core competitiveness is the key.

Back to the issue of advertising, maybe you can listen to my suggestions:

1. Brand comes first. The era of quick and easy land grabbing is over. It is time to build the ability to compete sustainably, and that is brand.

2. The key to improving user monetization is operational capability. If a user's contribution value increases from 500 to 1000, then you can invest heavily when others cannot afford it.

3. Improve team professionalism. In the past, the market always looked at data, ROI, CAC, CTR, etc., but promotion, business, and activities should all start from brand and marketing. Therefore, for a professional team, promotion, business, activities, PR, and data should all radiate around the marketing manager as the center. As your team becomes more and more professional, the efficiency will be higher. To do the same thing, the cost for others may be unbearable, but you can do it with ease.

4. Look for places with large profit margins. There will always be some value gaps, just like the rise of self-media and live streaming . There will also be new places. If you dare to be the first to try, you will have the opportunity to find places with large profit margins.

5. Skills are essential, and in fact it is also a question of professionalism. For example, in periods of high conversion rates, increasing investment will have much better results; for example, when competitors are all on the decline, you can make a concerted effort to attack them all at once; another example is to focus on a regional market or group and attack them thoroughly, just like Evergrande is accustomed to single-point blasting in the market, and attack them hard in a relatively short period of time. This is like a boxing fight, with one person punching one punch, and the process is brutal and endless. If you seize the opportunity and throw a combination of punches, you will win. Of course, everything is based on data, so it is crucial to have detailed data.

There is no need to complain. In the face of the general trend, professionalism is never useful.

Just like you understand Baidu's rules and techniques, you can choose the best and most long-tail words, your click-through rate is well optimized, and your materials are beautiful, but your costs are still very high. Because your brand is not good. In other words, no matter how good your traffic is, it is not as good as an excellent promotion because a promotion can capture the two key factors of traffic and conversion at the same time.

Go with the flow and don't expect any low-cost customer acquisition channels. Only by establishing strong market competitiveness can you acquire customers at low cost. If your maximum customer acquisition cost is 1,000 and your competitor's is 500, the actual industry customer acquisition cost is 700, which is unaffordable for your competitors but very cheap for you.

To build this capability, we must either improve user monetization capabilities, reduce CAC, or find areas with greater profit margins, and all of these depend on the team's capabilities. Haha, it seems like I'm talking nonsense again, but unfortunately, this is the competitive nature of business.

Mobile application product promotion service: APP promotion service Qinggua Media advertising

The author of this article @刘渝民 is compiled and published by (APP Top Promotion). Please indicate the author information and source when reprinting!