Three information models for advertising planning!

In an advertising company, you will always encounter many new clients, new businesses, and new industries. For example, in a new business pitch, you are usually only given a month or even two weeks to make a proposal, and before that you may know nothing about the client or the industry it is in.

Therefore, you need to quickly understand the industry and customers in a very short period of time, and make your own judgments, form strategies, make detailed plans, and provide specific ideas and works. This is a very challenging thing, but also what I think is the greatest fun in the advertising industry.

Before working on strategies and ideas, quickly understanding the industry and client business is undoubtedly the most basic work. Fortunately, we have the Internet today, and we can quickly collect a lot of information on the Internet with just a few clicks. But the reality is that every time I get involved in a new business and listen to my colleagues share the information they have collected, after listening to an hour or two of presentations with hundreds of pages of PPT, I still feel confused and unable to grasp the main point. I don’t know what the customer’s business model and core issues are.

This is because many people simply cut and save information from the Internet when collecting information. They neither organize and analyze the information systematically, nor form their own opinions, views and judgments about the industry based on the information.

When it comes to making plans, I have always emphasized a point that “collecting data is not equal to analysis, analysis is not equal to strategy, and strategy is not equal to creativity.”

Organizing the collected information, finding the key, and forming your own judgment is called analysis. Finding the problem through analysis and formulating feasible solutions is called strategy. Creativity is the creative transformation of strategies to create valuable content from the perspective of consumers.

In fact, speaking of industry research and analysis, when everyone is faced with the topic of "understanding an industry in a week", the first reaction is definitely to search the Internet; and, thanks to the development of the Internet today, you can definitely get a lot of information.

So what I mean is that what many people lack is not the ability to collect information, but the ability to organize information, that is, the ability to classify, compare, summarize and refine information. Collecting information may be done with just a click of the mouse, but organizing information requires you to have a clear thinking pattern and information model in your mind.

The first thing I want to share with you in this article is the information model of how to analyze an industry and what information to collect.

First of all, the most basic information model for an industry is called “ 6 major background analysis ” (I’m too lazy to give it a name, so let’s just call it that).

The so-called six major are product analysis, consumer analysis, competition analysis, company analysis, market analysis, and industry analysis. It includes 3 dimensions and 6 aspects, product analysis and company analysis, consumer analysis and market analysis, competition analysis and industry analysis. It is integrated, one dimension, the only difference is between micro and macro.

These six analyses are mainly applicable to the field of marketing and are intended to analyze a company's market strategy and brand building. In fact, to be more precise, this is not even an information model, but just a directional guide for organizing information into categories. The main issues of each analysis are as follows:

1-1 Product Analysis

What is the main functional selling point of the product?

Product line planning and price range distribution for corporate customers?

1-2 Company Analysis

What are the key technologies and core resources of corporate customers?

What is the cost structure and profit model of corporate customer products?

2-1 Consumer Analysis

Who are the target consumers? What is the user portrait?

What are consumers’ core needs and pain points?

How do consumers make purchasing decisions and what decision-making factors do they value (in which order)?

How do consumers access corporate products and brand information? What are the information touchpoints? How are the catalysts used to doing?

2-2 Market Analysis

What are the sales area distribution and city classifications of corporate customers?

What are the main sales channels for corporate customers? What are the key sales areas and cities?

What are the differences in consumption decisions and lifestyles among consumers in different regions and city levels?

3-1 Competition Analysis

How is the market competition landscape distributed?

Who are the main competitors?

What are the main marketing activities of competitors?

3-2 Industry Analysis

What is the overall scale and growth rate of the industry?

What is the industry’s past development history and changes, and what are its future development trends?

What external environmental factors affect the industry? Such as politics, economy, technology, law, social customs and moral responsibilities, etc.

What is the industry policy and regulatory situation?

To understand an industry, you should collect and organize information based on the above framework and identify the key issues. For advertisers, because they focus more on marketing and hope to understand the marketing and promotion strategies and advertising communications of corporate clients and their competitors, they will focus more on product analysis, consumer analysis, and competition analysis when collecting information. Based on the product's selling points and differentiation, target population portraits, psychological insights and decision-making trajectories, as well as how competitors promote and brand, strategic plans and ideas are formed.

However, these analyses are more at the micro level, focusing on the marketing behavior and sales status of a specific product. In the overall business model of corporate customers, this is the revenue analysis of the smallest operating unit and is part of Unit Economics.

Only studying the micro and not paying attention to the macro will cause you to lose the big picture and immerse yourself in specific tactical details, while losing your judgment on the overall trend of the industry and your grasp of the corporate strategies of your corporate clients. Therefore, when doing background analysis, we should not only analyze products, competitors and consumers, but also analyze companies, markets and industries.

So how do you collect information about companies, markets, and industries, see the essence through phenomena, find the key to this industry, and form your own judgment? Here I introduce two real information models.

One is Porter’s Five Forces Model.

The Five Forces Model was proposed by Michael Porter, the father of competitive strategy, in the 1980s. It is a model used to analyze the basic competitive situation of an industry.

These five competitive forces combined together can affect the attractiveness of an industry (whether it is worth entering), as well as the competitive strategies and corporate decisions of each company in this industry.

When we talked about the six major analyses earlier, we also mentioned competition analysis, but that only analyzes the competition between existing competitors in the industry. It can be said that it is incomplete and far from enough to understand the competition situation of the entire industry.

Let me redraw the diagram of Porter's Five Forces Model here. When we analyze the competitive situation of an industry, we first need to do a vertical industrial chain analysis, including the bargaining power of upstream suppliers and downstream buyers. The second is to conduct a horizontal market analysis, including the substitution capacity of substitutes, the ability of potential entrants to break through, and which new companies and companies from other industries will enter the market. For example, in the power bank industry back then, as soon as Xiaomi entered the market, it overturned the pricing system of the entire industry.

For B2C industries, it is important to consider alternatives when doing competitive analysis, especially for small and emerging categories.

For example, in my fan group, someone discussed the promotion strategy of formaldehyde-removing air conditioners not long ago. Formaldehyde-removing air conditioners are an emerging category. When you are making a marketing plan for this product, the competitors you need to consider are not just the formaldehyde-removing air conditioners launched by other air conditioner manufacturers. Instead, there are companies that provide formaldehyde removal services at your door, fresh air fans, air purifiers with formaldehyde removal functions, and even green ivy. These are alternatives to formaldehyde-removing air conditioners.

When a consumer has just finished decorating his house and has a need to remove formaldehyde, his first reaction may be to open windows for ventilation, buy green plants, ask a formaldehyde removal company to come to the house for testing, etc. As a formaldehyde removal air conditioner manufacturer, you have to tell consumers why they should not choose these but choose a formaldehyde removal air conditioner, or why after choosing these, they should also choose a formaldehyde removal air conditioner.

At that time, a suggestion I gave was to carry out publicity and advertising for the group that was renovating their new homes, and to promote the scenario of turning on the air conditioner with doors and windows closed in the summer. Because in fact the only truly effective way to remove formaldehyde is ventilation. However, turning on the air conditioner in summer and the heater in winter (including closing the door and sleeping at night), and keeping doors and windows closed without ventilation will cause the indoor formaldehyde concentration to rise, causing harm to the human body.

Therefore, the copywriting should arouse the user's anxiety and needs according to this scenario, and make the user think that he should turn on the air conditioner and remove formaldehyde (only then will he consider formaldehyde-removing air conditioner when buying an air conditioner). The copywriting can be roughly written as "With doors and windows closed, the formaldehyde concentration in the room increases rapidly? xx brand formaldehyde-removing air conditioner, the air must be cool and good."

Let’s talk about the B2B industry. When doing competitive analysis in the toB industry, it is very important to understand the upstream and downstream of the industrial chain.

Because upstream suppliers determine the supply chain and supply of important resources in an industry, this is an important part of an enterprise's business model. Just look at the huge impact the current chip shortage is having on the mobile phone and automobile industries.

Similarly, downstream buyers have a huge impact on an industry because they affect the performance of the entire industry. Unlike toC companies that have millions or tens of millions of consumers, toB companies have a very scattered purchasing population. A toB company's downstream buyers may be hundreds, dozens, or even a few, all of whom are big customers. Once these downstream purchasing companies encounter problems in their operations, they will most likely be transmitted to upstream industries.

For example, in the elevator manufacturing industry, there are about 800 companies in the country, which is precisely due to the booming real estate industry in recent years. Real estate is the downstream buyer of elevator manufacturers. The real estate industry is now facing challenges. If nothing unexpected happens, the elevator industry will also usher in an era of large-scale industrial restructuring, bankruptcy, and mergers. In the end, only a few large elevator brands may remain.

This is the five forces model analysis. Only when you take into account all the different competitive forces can you understand the ins and outs of an industry.

The second model is the financial model.

The financial model first analyzes the cost structure and revenue sources.

The cost of a company's products can be divided into fixed costs and variable costs. Fixed costs include office rent and employee salaries, while variable costs include product material costs, distribution costs, etc. The corresponding revenue analysis should focus on the following data: GMV (gross merchandise volume), average order value, gross profit margin, etc.

This is the first level of financial analysis. The second level of analysis looks at CAC and LTV.

CAC refers to customer acquisition cost, Customer Acquisition Cost. LTV refers to customer lifetime value, Life Time Value. These two data are particularly important for marketing.

Because the traffic dividend has disappeared and the customer acquisition costs for companies are getting higher and higher, it is becoming increasingly important to manage the customer base well. For example, if the cost for a company to acquire a customer is 300 yuan, and you can earn 10 yuan for each order from this customer, then this customer must make at least 30 orders from you before you can make a profit. Therefore, in order to make this customer continue to repurchase from you and become your loyal consumer group, you have to manage the customer's lifetime value. This is why private domain traffic and community operations have become increasingly popular in recent years.

The third level of financial analysis is to look at the company's cash flow and capital turnover cycle.

I won’t go into detail about this (because I don’t really understand it either).

So, where can we find these financial data?

My experience is that when you want to research an industry, first look for the leading listed companies in that industry. The annual financial statements of listed companies are public information and are not difficult to find. For example, they can be found by searching on Hexun.com, Eastmoney.com, Qianzhan.com, etc.

In the annual report, the company's operating income, business costs, gross profit margin, net profit and other data are all clearly visible, including the company's sales expenses, administrative expenses, etc. You can also compare the changes in the company in different years. By looking at these data, you will have a general understanding of the overall situation and financial performance of an industry, and at least the magnitude of the financial figures will not be wrong. And think about it, if the data performance of the leading listed companies in an industry is like this, it goes without saying for other small unlisted companies.

Regarding the group of advertisers, I would like to say one thing in particular: many of them are too emotional and tend to think intuitively. When receiving business from an industry, they only look at what the advertising appeals of each brand are and what the creative performance looks like. They do not pay attention to financial data at all and cannot understand financial reports.

This will result in their creative ideas being superficial and lacking in-depth understanding of the industry and consumers; they are too much like rough drafts, looking flashy and fancy but unable to actually help clients solve problems. So you must learn the financial model, it is very important.

Through the above-mentioned six basic background analyses, the five forces model and the financial model research, you will be able to grasp the key to an industry in a very short time, and then make your own judgment and form a strategy. The above are all about thinking patterns. Next, I will spend a little time to talk about how to collect information specifically.

When I research an industry or company, I usually go through the following steps:

1. Read industry reports and industry interpretation articles first

These are to have a perceptual, macro and holistic grasp and understanding of the entire industry. There are roughly two ways to obtain this information: one is to read the brokerage firm's report . The advantage of the brokerage firm's report is that it is relatively rigorous and the data is true and reliable. If you want to find brokerage reports, there are many mini-programs on the Internet and WeChat. I bought two annual memberships for the report-checking mini-programs.

Second, look at industry vertical websites and industry media

Many industries have their own media websites, which contain a large number of analytical articles about the industry. For example, if you want to study the technology and Internet industry, you can take a look at Huxiu, 36Kr, iFanr, etc.

2. Look at the financial reports of listed companies

After reading the industry report and having an overall understanding of an industry, you can find the listed companies in this industry and look at their financial reports. This has been mentioned before and I will not repeat it here.

3. Look at the consumer research report of this industry

This is to gain a specific understanding of the characteristics of the consumer population in an industry, including consumer portraits, especially basic demographic information such as age, gender, family structure, education level, monthly income, and city level. Then there is consumer demand and purchasing decision trajectory. Only by mastering this information can we formulate marketing strategies and advertising ideas.

Of course, not every industry’s consumer reports can be found online. Basically, only large and popular industries have them. For some niche and unpopular industries, if you want to conduct consumer research, you can only rely on your own market research. The advantage of studying consumers through market research is that it is more in-depth and targeted, while the disadvantage is that it is time-consuming, labor-intensive and costly. The topic of research cannot be explained in a few words. I will write an article to talk about it when I have time.

4. Look at the operating conditions of the upstream and downstream of this industry

This has been discussed in the five forces model, so I will not repeat it here.

5. Collect competitor information

If you want to study the marketing model of an industry, then you need to collect various marketing behaviors of the major brands in this industry, including advertising, self-media, marketing activities, etc., as well as these brands' corporate news, major events, bosses' public speeches and speeches, etc.

6. Interview industry experts

Find some experts in this industry to interview, whether it is a paid consultation or a meal and chat, because they can tell you some information that is not available in the public information online, and some tricks that only insiders in this industry know, including unspoken rules.

One point I want to emphasize is that I do not recommend interviewing industry experts right away when doing industry research. It is best to first look at previous industry reports and financial statements of listed companies to understand the basic industry information, and then interview industry experts with questions, so that the answers you get will be more targeted.

Moreover, if you know nothing about the industry and you are eager to find an expert to interview, the other party will think you are too ignorant and a waste of their time, and they will be too lazy to pay attention to you.

These are the main paths and steps for searching and researching an industry. By sorting out this information according to the three major information models above, you can master an industry in a short period of time and even pretend to be an expert in this industry.

Author: Empty Hand

Source: Empty-handed