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In-depth report | Why are giants competing for information flow advertising?
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There will inevitably be a battle between Toutiao and Baidu. Their target is directly aimed at information flow advertising , which is the most valuable market after search advertising. Should Toutiao be panicking? There is a lot of talk that Baidu is going to acquire its arch-rival Yidian Zixun. Theoretically, if a party that is not good at content acquires a follower in a market, it will not make much difference in the final ranking. This could just be a smokescreen. However, Baidu is indeed eager to enter the content field, and the company has also begun to be wary of Toutiao. Zeng Hua, general manager of Baidu's large customer department, mentioned to 36Kr that it was precisely out of anxiety that Baidu quickly launched information flow advertising at the end of 2016, directly targeting the core position of Toutiao. In June last year, Baidu integrated information flow content into the Sogou App and the homepage of Baidu Browser , and the newly launched information flow ads will be embedded in them. If Baidu's connection method is "people looking for information", then Toutiao, which has risen in content distribution, adopts the reverse path - "information looking for people". But the two companies have the same goal, with a high degree of overlap at both ends. On mobile phones, Toutiao's browsing mode is more popular. Now, information flow and AI are on par with each other and are the two major futures defined by Robin Li . Baidu's recent series of actions have also begun to move in this direction, increasingly showing signs of strategic contraction in other businesses. This kind of competition was unimaginable in 2015. At that year, Toutiao's revenue was only 1.5 billion yuan, while Baidu's annual online marketing revenue exceeded 60 billion yuan. The two were simply incomparable. But what Baidu has to be vigilant about is that its growth has encountered a bottleneck and the growth rate of advertising revenue has shown signs of slowing down. Baidu's online marketing revenue from 2001 to the first three quarters of 2016 In comparison, Toutiao’s advertising revenue grew by more than 300% last year, claiming to have reached 6 billion in the first three quarters, a remarkable growth. Starting information flow advertising early brings first-mover advantage. "Zhang Yiming is right about one thing, which is that the sooner the monetization is realized, the better," said Xu Yujie, director of commercial products at Toutiao. "Now, when larger advertisers mention information flow advertising, they will say that Toutiao is a must-buy. It has already created a cognitive advantage." Information flow advertising is the core of Toutiao’s revenue growth and is also the core of competition among various companies today. This is a new form of advertising that is more suitable for the mobile Internet era after search advertising. Ten years ago, mobile marketing accounted for only 70% of Facebook’s marketing, but thanks to in-feed advertising, this figure has now increased to 98%. Simply put, information flow ads are commercial information embedded between information. If you don’t pay attention to the words “ promotion ” and “advertisement” that appear around them, you may not even realize that this is an advertisement. Moments ads can also be included in this category. This form of advertising, which is already very common abroad, is experiencing a boom in China. Last year, Weibo’s information flow advertising accounted for 53% of its total advertising revenue. "In 2015, in the US market, information flow advertising and traditional display advertising each accounted for half of the market share. After that, the two will see a golden cross, and it is expected that by 2018, the proportion of information flow advertising will reach 65%." Huang Yan, senior director of Baidu's display advertising, said that in 2017 "there will be a growth of nearly 100%." This is also an inevitable result of traffic becoming more expensive and every company starting to claim to be creating content - every company also wants to compete for the content-based advertising dividend. The battle for information flow The core of information flow advertising is that there must be information flow products with sufficient traffic. Products such as Toutiao, Facebook, Weibo, WeChat , and Momo are among the best. As long as users open their products, they can passively enter the ocean of information flow. At this time, whoever has more traffic will have more powerful information flow advertising. The product form of Weibo is a typical information flow. Its third-quarter 2016 financial report showed that Weibo's advertising and marketing revenue increased by 48% year-on-year, reaching a total of US$156.7 million. In the past two years, its revenue growth rate has remained at such a high level, and information flow is the key force driving the increase. Momo has two information flow advertising positions : "Message Board" and "People Nearby". When it launched its native advertising marketing system in the second quarter of 2015, supporting customers to place independent advertisements in information flows, this became a watershed moment for it: in the first quarter of 2015, its mobile marketing revenue accounted for only 23%; by the fourth quarter, the proportion of mobile marketing revenue increased to 39%. Its growth rate is even more impressive. In the third quarter of 2016, it increased 64% year-on-year to $17.7 million. In the fourth quarter of 2014, before the launch of information flow ads, the combined revenue from mobile marketing services and paid emoticons was only US$2.3 million, a year-on-year increase of about 10%. Unfortunately, Baidu did not reap the benefits of this information flow advertising. Most of Baidu's content can only be seen after users actively search for it. This form has created a unique advantage for Baidu's paid ranking ads, but it has also hindered Baidu's progress in developing its own information flow products. Products with information flow functions, such as Baidu's homepage recommendations, Baidu Mobile, Baidu Browser, and Baidu News, have never developed into Baidu's mainstream. As a result, when a large number of social , content and even browser products rose to prominence with the help of information flow advertising, Baidu's own advertising marketing revenue was affected. In the third quarter of 2016, Baidu's marketing revenue even showed a year-on-year decline. Without information flow, there will be no information flow advertising. Information flow is a large amount of content that you don’t need to actively search for. Either you let users produce content through social products like Facebook, Weibo, WeChat, and Momo, or you crawl content, sign copyright agreements with content producers, introduce self-media , and let professionals produce content like Toutiao and major news clients. Robin Li began to understand that search cannot produce content. Multiple independent sources within Baidu confirmed to 36Kr that more and more internal personnel are beginning to migrate to the information flow team. For example, some members of the medical division that was just abolished were transferred to the department responsible for information flow; and in other departments that have been gradually marginalized, more and more employees have applied for transfer. "Once Baidu has set its sights on something, its execution is extremely fast. Frankly speaking, I am amazed at the speed this time." Huang Yan, head of Baidu's information flow advertising product research and development department, said that from products, technology, marketing, sales to operations staff, the team was quickly in place in a very short time. Although content production is Baidu's shortcoming, in its third quarter financial report for 2016, it specifically mentioned that its "content ecosystem construction has achieved phased results" and that the traffic of Baidu mobile information flow increased 20 times in three months. Toutiao is like a catfish put into a pond, and Baidu's comfortable environment has been broken. Is it worth investing in information flow advertising? Aliza Knox, Twitter's vice president for Asia Pacific, frequently travels between cities such as Beijing and Shanghai. She has won a long list of clients for Twitter: Huawei, Baidu, Alibaba , LeTV and Lenovo are among them. They are "very enthusiastic" about placing information feed ads, Knox said, and the number of advertisers in Greater China has achieved an annual growth of 366% since 2015. "Twitter is expected to be profitable this year under US generally accepted accounting principles." Advertisers' enthusiasm is not without reason . Huawei once placed an in-feed ad for its tablet phone Ascend Mate7 on Twitter and embedded an ad trailer video. The final feedback data showed that the average user interaction rate exceeded expectations by 193%, and Twitter followers increased by 3.5%. Baidu Mobile wanted to expand the Baidu Magic Photo App in the North American market and finally chose Twitter's App Cards advertising product. In the end, the number of followers increased by more than 27,000 and the app download rate reached 1%. "Native ads like news feeds have a 220% higher click-through rate than banner ads. In the United States, 58% of millennials say they like news feed ads, which is much higher than banners, subscriptions, pop-ups and other advertising formats," said Knox. Moreover, as a new form, information flow advertising can also replace the shortcomings of search advertising. Xu Yujie, commercial product director of Toutiao, asked 36Kr, "You will search for it only because you know it is a Camry, but what if it is a new car that is eager to establish its brand?" The answer is to adopt an active recommendation model and use information flow to stimulate demand. Xu Yujie clearly felt that there were suddenly more players at the moment: "Now people all over the country are doing information flow advertising. I even saw some companies whose main business has nothing to do with information flow, and they also hope to take some of it in." Obviously, information flow advertising has become a must, but how to do it? "While Weibo has achieved good revenue data, the audience generally reflects that it has not done a good job in balancing the effect and experience, and is even somewhat out of control. The focus of later observations will be on whether it is 'moderate'. If not handled properly, it may cause trouble." An analyst from a third-party consulting company told 36Kr. How to increase traffic is the first priority, and then how to handle user experience and whether to be "restrained" in the product becomes another test. Experience is the 2.0 competition stage This is the main reason why Baidu spent a huge sum of money to invite Li Jing (operator of the public account " Li Jiaoshou "). Before joining Baidu, he conducted research on information flow advertising at Baidu's request. He was deeply impressed by an experiment on information flow advertising related to financial management . The original copy read "Financial management interest rate is as high as 7%", which did not produce ideal results. However, when a half sentence "You no longer need to go to the bank in 2017" was added in front, the click-through rate doubled compared to before, and the conversion rate also increased. The increase in click-through rate means that users think the information is useful to them and have subconsciously recognized its value, so the interference of advertising to users is not as great as imagined. "We are working on 'scientific marketing'," Li Jing told 36Kr. On the one hand, we want to see how artificial intelligence can be implemented in the field of advertising and marketing, and on the other hand, we hope to produce tools that can help small and medium-sized enterprises in their marketing. This is also one of the reasons why Baidu decided to recruit Li Jing. An insider of Baidu revealed that Li Jing's joining was decided by Robin Li himself. At that time, he had already decided to develop information flow and believed that this would become an important source of income. And "scientific marketing" just happens to fit Li Yanhong's idea. Now, Li Jing's workplace has moved from Wangjing SOHO to Baidu Technology Park in Zhongguancun Software Park. His team of more than 20 people is located in a corner on the third floor. Tencent is doing this quietly. A person close to Tencent's social advertising revealed that in order to ensure the high quality of each information flow advertising product, Tencent has poached senior creative talents from the 4A team to monitor the quality of advertisements and provide suggestions. What impressed him was that before Apple launched the WeChat Moments information flow ads, it would often test-run multiple versions on a small scale, and finally confirm the one with the best effect for large-scale launch. "There may be dozens of versions, can you imagine?" he said. Moments advertising is the most typical product of Tencent’s information flow advertising, and is also recognized as the most “restrained” representative. Everyone can feel WeChat's cautious pace in commercialization. After all, as a closed information platform, its social attributes are far greater than its media attributes. External information inserted into the information flow of acquaintances can easily cause users to reject it. Nice, which launched information flow advertising last year, has an attitude similar to WeChat. Zhou Shou, the founder of nice, only accepts advertising from brand clients and does not accept orders from small and medium-sized enterprises in the long-tail market. Even brand clients will be strictly screened, and its first advertiser is Apple Music. This stringency will affect the scale of advertising revenue. "Sometimes I would argue with CEO Zhou about whether he should be less strict, but every time he used reasons like user experience and long-term development, I couldn't argue with him," said Eric, Nice's sales director. "We missed out on several big advertising revenues, and as a startup , we felt really bad about the money." Even with its restraint and caution, the appeal of information flow advertising still forces Tencent to take frequent actions. The earliest minimum investment for WeChat Moments advertising was at least 10 million yuan, and advertisers would also be screened more strictly. Recently, Tencent Social Advertising announced the launch of local promotion ads in Moments based on geographic location. As the channels are lowered, the investment amount has also been reduced to 50 yuan per thousand exposures in some cities, with a minimum daily investment of 300 yuan. So, is it possible to balance user experience and advertising revenue scale? The closest answer to the correct answer is: whether the advertisement, or the information, is accurate and useful. "After all, an advertisement is just a piece of information. There is a fruit store and an electrical appliance store next to my house, which can sometimes be a piece of useful information," said Xu Yujie of Toutiao. His team is currently conducting trials. For example, when Toutiao knows that a reader has read an article about pears and finished reading it, this feedback will continue to strengthen, and eventually it will learn that this person may like pears, and the information flow ads pushed to him will be accompanied by pictures of pears instead of apples. Reducing disturbance to consumers directly depends on the amount of data the platform controls and its technical strength. "In the future, information flow advertising will actually be tested on technical strength." Baidu's Huang Yan gave an example, saying that it is not enough to find out that a person is very interested in traveling. The difference in advertising effect will be "very, very big" if the person is going to travel today or preparing for a trip next month. Therefore, "we will package 2 million intent categories. When there are enough tags, the identification of users will be very precise." Of course, Baidu needs to rely on its own technology, sales capabilities and customer resources to "bridge the time gap between itself and its competitors." It seems that there is still a lot of space in the market, and there are still a large number of advertisers who are enthusiastic about information flow but don’t quite understand it. With half an hour left before the start, the information flow advertising venue of the Baidu MOMENTS Marketing Festival, which can accommodate three to four hundred people, is almost full, and the open space in the venue is as crowded as the ticket hall during the Spring Festival travel rush. The financiers, who were used to a comfortable environment, were prepared to stand and listen to the entire forum. "In fact, no one fully understands what information flow advertising is," a company representative told 36Kr, "but many people started to mention it, so they all wanted to come here to see what it is." Mobile application product promotion service: APP promotion service Qinggua Media advertising This article was compiled and published by @王雷柏、严浩由(Qinggua Media). Please indicate the author information and source when reprinting! |
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