Massive Engine Interactive Advertising System

1. The shift in growth strategy in the stock gaming market

In 2021, one of the important keywords for China’s Internet will be “stock competition”.

This is not sensational. According to data from Questmobile, the growth rates of the three key indicators of China's mobile Internet monthly active scale, average usage time per person, and average number of APP openings per person in 2020 were 1.7%, 4.9%, and 2.8% respectively.

Note: This data was achieved against the backdrop of the epidemic driving the entire population online.

Yes, the era of extensive and barbaric growth is over.

Welcome to the era of intensive farming.

Under the growth strategy of stock game, every player is refining their own growth strategy, and "growth hacker", "private domain traffic", "downstream market", "going global" and other popular words in the industry.

That’s right, every participant in the stock game is gaining competitive advantage through its own differentiated way. Among the many differentiated growth strategies, advertising is the most steadfast ballast because it is certain enough, predictable enough, large enough, and has enough room for optimization.

Advertising is essentially an investment. Operating advertising is like operating a fund, and the advertising trader is the fund manager. Every choice of action must bring returns and results.

In the past, when the market was rising, you could get good returns by buying any stock, but the magnitude of the returns varied. However, the industry is facing a difficult problem today - the market is not rising, and this is when fund managers' ability to select stocks in a refined manner comes into play.

Every player is refining its own advertising investment portfolio and at the same time placing very high demands on advertising efficiency, which in turn will have a reverse impact on the decision-making of advertising platforms. Today's advertising platforms must adapt to advertisers' ultimate pursuit of efficiency.

As ByteDance's marketing service brand, Massive Engine is a leading advertising platform in China. Against the backdrop of today's advertisers increasingly pursuing ultimate efficiency, it has made many brilliant innovations in systems, recommendation mechanisms, advertising styles, operating models and other aspects.

Today, we will take interactive advertising , a new form of advertising launched by Bytedance, as an example to see how Bytedance thinks about the underlying logic of a commercial product.

Before explaining the underlying logic of this interactive advertising, let’s first give an intuitive introduction to the interactive advertising of Massive Engine:

The newly launched interactive ads by ByteDance are interactive video ads. The ad interface presents the interactive elements that advertisers want to present (such as pre-experience app, participating in trial games, functional experience, testing and obtaining rewards, etc.), allowing users to gain real experience while watching the ads, thereby stimulating them to further download, register or pay.

This interactivity between users and ads allows users to truly feel that this is an ad that is "related to me", further enhancing user participation and thereby increasing ad click-through rate or conversion rate.

2. The Past and Present of Interactive Advertising

Strictly speaking, interactive advertising is not new, it has a long history.

Before understanding the underlying logic of interactive advertising, we need to sort out the past and present of interactive advertising.

Interactive advertising can be traced back to the two advertising formats launched by Google in December 2015:

(Trial Run Ads) allows users to experience the app for 60 seconds in the ad and then decide whether to download the app;

Interactive Interstitial Ads (IIAs) use HTML5 technology to create interactive web interfaces for ads. They are not only applicable to game applications, but also to other application forms such as e-commerce and information.

At the 2018 Google Game Developers Conference, Google Play Store launched Google Play Instant, taking the industry one step further. It provides an underlying framework. Games developed according to this framework can be played by users in the Google Play Store without downloading. Of course, this form is limited to Google's own store.

In December 2018, Facebook launched playable ads in its News feed for the first time. After that, Unity, Applovin, and Ironsource also launched playable ads for the gaming industry.

According to App Growing, 12.56% of Ironsource’s ads are playable, while Applovin’s is 19.42%.

Unlike in foreign countries, traditional interactive advertising in China was first launched by some third-party companies as lottery-type interactive advertising. This type of advertising is different from direct interaction with users on the advertising interface. It is implemented on the landing page of the advertisement in forms such as a big turntable, smashing golden eggs, and drawing blind boxes.

This type of interactive advertising generally provides advertising information to users in the form of coupons, and is generally used to pay for long-tail traffic such as completion pages.

According to public information, ByteDance first developed trial ads in early 2019, and was the first to launch the "incentive video + trial ads" model on the Pangolin platform under ByteDance. In 2020, it directly brought interactive trial ads to multiple traffic systems such as Douyin, Toutiao, and Xigua Video.

After reviewing the history of interactive advertising, we can clearly see:

Although the implementation methods are different, both at home and abroad, the general judgment that advertising forms will become more direct and immersive has become a consensus. In fact, this is also the core evolution direction of future advertising forms at the front-end display level.

3. The evolutionary logic from “watching ads”, “clicking ads” to “playing ads”

The essence of Tik Tok interactive advertising is actually composed of three parts:

1. Pictures and short videos are used to introduce the core selling points of the app;

2. Interactive interface, used to experience immersive functions or experiences, and enhance positive feedback and sense of achievement;

3. The conversion button is used to facilitate users to download or place orders conveniently. These three parts are progressive and form a complete and unified experience process.

Interactive advertising reduces the operating cost of user experience functions in terms of steps, allowing users to "play" with ads without any precautions or pressure.

This is essentially a form of hypnosis, which allows users to let down their guard while providing instant feedback, making the entire experience seamless. This immersive experience is consistent with Douyin's own product concept.

In the evolution from traditional advertising to the Internet, I think two revolutions have taken place:

The first revolution is the "precision revolution". It is easy to understand that Internet advertising can be tailored to each individual.

The second revolution is the "interactive revolution", which is an improvement from the one-way "watch ads" era of traditional advertising to the two-way "click ads" era of the early Internet. However, clicking is too simple after all. The multi-touch screens of today's mobile phones are not designed for clicking, but for multiple interactions.

So with the birth of interactive advertising, the industry has finally entered the era of "playing advertising".

It is a more advanced form of native advertising that seamlessly connects advertising methods and goals, shortens the experience path in an era of scarce attention, and is an objective experience upgrade for both advertisers and audiences.

Of course, the ultimate goal of advertising is efficiency, and innovation in style must ultimately be implemented to improve performance data. So, how does interactive advertising effectively improve the efficiency and effectiveness of advertisers’ advertising?

We look at this from two aspects:

1. Delivery efficiency: We know that PVR = CTR * CVR, which is an important indicator to measure the advertising plan's ability to run volume; interactive advertising drives the improvement of PVR by increasing CTR and CVR, thus improving the advertiser's overall ability to run volume.

2. Delivery effect: Interactive advertising helps advertisers acquire more paying users by attracting core players, and the data also verifies the improvement of payment rate and ROI data.

Another important meaning of interactive advertising to advertisers is that it can provide multi-dimensional in-depth interactive information and data.

Whether users participate in the interaction, how long they participate, and to what stage they participate, these detailed indicators provide advertisers with a lot of valuable information for optimizing materials, thereby effectively guiding optimization and improving overall ROI.

4. How does interactive advertising reshape the advertising ecosystem?

Interactive advertising is essentially a form of in-depth communication that can convey specific and immediate information more clearly. It can put the application experience in the forefront, allowing users to experience the core gameplay of the product without downloading the application, reducing the user's psychological cost and thus improving the overall conversion rate.

Therefore, it is suitable for industries with short decision-making chains and strong content orientation, such as games, social networking, information and other industries.

Let’s talk about the game industry first. The total scale of the mobile game industry in 2020 reached 233.5 billion, with a growth rate of over 30%. It is the absolute largest track in the entertainment industry. The two key indicators of the number of players and the amount of payment support the industry’s long-term growth logic.

The epidemic has further accelerated the penetration rate of online entertainment, which on the one hand has brought high growth to the industry, and on the other hand has intensified the already fierce competition.

Another important trend in the gaming industry in 2020 is that the solid position of traditional distribution channels has gradually begun to shake, and buying volume has replaced joint operations as the key variable in the growth of the gaming industry, and interactive advertising has undoubtedly given the gaming industry a shot in the arm for buying volume.

The gaming industry is naturally the home of interactive advertising. Whether it is a large-scale game or a casual game, a trial game that can be directly operated will bring more experience improvement than watching the picture through the screen.

Jane McGonigal particularly emphasized in her book "Games Change the World" that "instant feedback" is the most core way to motivate users in game development. Today, interactive advertising has extended the concept of "instant feedback" from the pre-game development to game promotion, which is a brand new experience for both game players and game developers.

The effect in the gaming industry is extremely obvious: during the mass-promotion stage of many tens of millions-level game manufacturers, the consumption of trial ads exceeded 60%. Taking the Three Kingdoms real-time battle game as an example, its PVR increased by 23.9%, the payment rate increased by 39.7%, and the average planned consumption increased by 39.2%.

In daily advertising scenarios, advertisers have a very high degree of recognition for interactive advertising. This recognition stems from the actual improvement in the effect - compared with ordinary advertising, the PVR of trial ads increased by 20%, and the increase in payment rate led to a 18%-25% decrease in overall payment costs.

The ultimate core indicator for measuring the ability to buy traffic is ROI, and the ultimate ROI in the gaming industry = single-user lifetime value/single-user acquisition cost. On the one hand, interactive advertising can effectively increase the attractiveness to high-intent users and improve LTV. At the same time, it will also reduce the acquisition cost of a single user by increasing the conversion rate, thereby improving the overall ROI of the game.

As for the social and information industries, these two industries are also facing extremely fierce competition. According to data from Questmobile, under the squeeze of the overall market, the increase in users and time spent in mobile social and mobile information are not at the forefront of the entire industry landscape.

This means that every player in these two industries will control customer acquisition costs more finely and work harder to optimize ROI, retention and monetization efficiency. Interactive advertising undoubtedly provides a unique opportunity for the social and information industries, which allows industry players to demonstrate their advantages in a "multi-category aggregation" manner.

What's the meaning?

Taking information applications as an example, when an information APP has multiple core categories, traditional single advertising materials usually cannot display each category one by one.

By using interactive advertising, categories can be converted into a slidable and selectable interface, and users can directly operate the interactive interface. Compared with downloading, this is essentially a pre-experience, and the effect of the delivery is very significant.

In fact, there is still a lot of potential to be explored in the interactive advertising scenario. It can essentially magnify the original advantages of advertisers. In the early days of the development of the e-commerce industry, there was a concept called the "Ten-meter Project", which said that the ideal length of an e-commerce details page should be more than 10 meters in order to fully display the advantages of the product.

Today, we have a new way of presentation: "pictures & videos + interactive advertising". Compared with the traditional "ten-meter project", it adds an important dimension - interactivity. This new dimension is worth every advertiser's full exploration based on their own characteristics.

Any new thing has a bonus period when it first emerges, but the reality is that only some players, not all players, can enjoy the excess returns during the bonus period. The decisive factors lie in judgment and action.

For interactive advertising, an "advanced productive force" with extremely obvious advantages, hesitation and waiting are by no means advantageous strategies. Players with a keen sense of smell have already conducted detailed research and entered the game.

5. What is under the iceberg? Construction of interactive advertising service system

Any mature commercial product is actually an iceberg. We can see a simple and cool interface above the water, but there is actually a larger supporting system hidden deep below the water.

Behind interactive advertising is a well-structured service system that integrates the work of pitchers, optimizers, creative producers on the advertiser side and sales, operations, and technology on the platform side into an assembly line. The smooth operation of this assembly line depends largely on the efficiency of refined operations.

Indeed, while interactive advertising improves convenience and complexity on the front end, it also increases costs on the back end. A typical cost is the cost of producing the material.

There are generally two ways to implement interactive materials: the first is HTML5 web page implementation, and the other is interactive video. Both methods have a certain degree of production complexity.

Complexity means threshold, so how to solve the threshold problem?

Massive Engine has adopted two strategies:

First, develop a universal production platform and provide standard and diverse templates. ByteDance has developed the Rubeex platform, which follows the design concept of "modular fill-in-the-blanks" and allows advertisers to quickly and intuitively build their own materials by directly uploading corresponding materials based on the provided templates.

For example, in the gaming industry, the Rubeex platform breaks down templates designed for different game themes and styles into each frame. Advertisers only need to upload pictures and videos, and the rest is left to the platform.

Second, we established a third-party service system, screened high-quality suppliers, and provided a basic trading platform to support advertisers in placing orders, allowing professional teams to do professional things. At the same time, we also exported advertisers' self-made production links and provided guidance for advertisers to build their own material teams.

The product and service system is not a static system. It is also evolving, and its subsequent evolution direction is:

First, Bytedance will continue to upgrade its display methods, and will add a new interactive method of "light interaction" to short videos in the future; second, it will further lower the production threshold and introduce more creative production suppliers to join this system; finally, it will present detailed data of interactive materials in a more refined manner, and provide feedback on optimization directions to advertisers and platforms;

China's Internet advertising has long entered the deep water zone. Extensive growth and monetization are gone forever. If we want to achieve healthy growth, both platforms and advertisers need to change their thinking and work hard in every link that can be optimized.

"Seeking growth through refinement" will become the most important theme of China's Internet advertising industry for quite some time to come.

To summarize briefly:

Interactive advertising is a beneficial exploration of the diversification of future advertising media by the content consumption business center of ByteDance against the backdrop of accelerated 5G coverage and the emergence of cloud gaming.

This forward-looking exploration will eventually translate into actual returns for the platform and customers through continuous optimization.

Author: Wei Xi

Source: Weixizhibei