How to use traffic thinking to tap into the Douyin live e-commerce ecosystem?

In the PC era, the Web 1.0 period was mainly based on tools, and the operation method was "rogue software" style; in the Web 2.0 period, the Internet provided high-frequency + rigid-demand services, and the operation at that time was mainly to deal with SEO and SEM.

After the mobile Internet began in 2012, the first thing that happened was the construction of the embryonic infrastructure, including communications and social networking; then, e-commerce, video, and games, the three industries with the strongest monetization capabilities, began to develop, and they were the first to understand traffic. They are also the first players to enter a traffic ecosystem in the later stage because they have the strongest monetization capabilities.

Starting from 2014 and 2015, the mobile Internet entered a turning point and traffic was about to enter a bottleneck period. At this time, the entire industry began to extend to more subdivided life service areas. Service areas such as food, clothing, housing and transportation also began to learn how to use paid traffic. Services became more and more professional, monetization capabilities became stronger, and some super brands emerged.

The representative strategies at this stage are from the relatively easy ranking-boosting to the more complex app store CPD (pay per download) and ASO (app store search ranking optimization).

From 2016 to 2019, mobile Internet transitioned to the information flow era, and obtaining traffic became more difficult and more refined.

In 2020-2021, short videos and live streaming e-commerce have become the new way of playing. How should we convert traffic at this stage? This is the focus of my sharing today.

01. What can be sold through Douyin live streaming ?

Let's compare the classic search traffic model with the current recommendation traffic model.

There are some classic marketing models in the search traffic model, planting grass offline and "harvesting" online.

For example, today I was walking on the street and saw someone wearing nice clothes, so I had a desire to buy it and went online to search and buy it; for example, if I saw a certain service was very good, I would search for the purchasing experience, which is also planting grass offline and pulling grass online.

Therefore, all our products and services will be ranked based on search results, and a higher ranking will solve the problem of traffic. Overall it’s a bit like a long-distance race, where you have to rank your products/services high every day.

The recommended traffic mode can achieve the goal of planting grass and pulling grass at the same time. In the past, people often strolled on the streets, but now people spend more time watching platforms such as Douyin and Kuaishou. Many products/services are directly embedded in short videos, and users can directly meet their needs by watching videos. This process is more like a sprint, which requires explosive power.

I think the entire industry, not just e-commerce, will shift towards this traffic ecosystem.

So what is interest e-commerce?

To put it briefly, we saw something delicious in a short video and became interested, but we still had some doubts before buying it: Is it safe? Is it cost-effective? What is your evaluation of it?

At this time, we can jump into the live broadcast room to read the comments and listen to the host’s introduction. Once these doubts are resolved, we can place an order immediately.

Therefore, the form of short video + live broadcast is a new evolution of traffic ecology. In the past, we converted users through the App. From new user registration to next-day retention, 3-day retention, and 15-day retention, it might take 2 to 7 days before you can solve the problem of user trust.

But now, with the help of short videos + live broadcast rooms, short videos can bring users to the live broadcast room within 10 seconds, and the live broadcast room can solve all user concerns within 2 minutes, and the other party can directly make a purchase. The pace will be faster, so all our business forms must adapt to the new changes in traffic forms.

Below are some examples of Douyin e-commerce that have performed well.

The first one is a book company that we (DouChaCha) serve. It entered the Douyin e-commerce market at the beginning of the year and has now achieved a total GMV of more than 50 million.

How do we do it? The method is to sign influencers. We selected one of the top 5 influencers in the children's book category, built a live broadcast matrix around this influencer, quickly entered the Douyin live broadcast e-commerce , created a live broadcast room, and then quickly increased sales.

Recruitment is now also being conducted through video and streaming. For example, Liu Nan, a Tik Tok celebrity, posted a video recruiting anchors, and in the end, the number of applicants exceeded 6,000.

This series of videos not only includes recruitment needs, but also follow-up reports on interviews, introductions to company interview situations, and more. In the end, not only did it help her find an anchor, it also brought her tens of millions of exposures.

In the future, more recruitment and job hunting may be conducted in the form of live broadcasts and videos.

In addition, Douyin live streaming has also been very popular in industries such as education, tourism, and automobiles. Some live streaming rooms now have millions or tens of millions of spend in a single day.

I think everyone knows about Wang Leehom selling courses on TikTok a few days ago, right?

How much did he sell? At that time, we checked the data through Doucha and saw that a live broadcast sold more than 1 million.

You can take a look at the traffic in his live broadcast room. The red line represents the people who are retained, and the green line represents the push traffic. On average, nearly 200,000 people enter the room every minute, and the retention time in the live broadcast room is 2 minutes and 30 seconds.

This is the logic behind a live broadcast room. Of course, Wang Leehom is not a professional anchor, and his efficiency in handling such a large amount of traffic is relatively low. If he were a professional anchor, such as Luo Yonghao’s team, the overall conversion efficiency would be higher.

Finally, let’s give an example of our own. As a data platform, can Douchacha be sold directly on Douyin?

The answer is yes.

We learned from the Operation Research Society and made a Douyin live e-commerce map, which contains a lot of useful information for Douyin live streaming, with a unit price of 50 yuan;

Then we opened a live broadcast room to sell this map, and we could sell dozens of copies a day. But ultimately, what live streaming brings is not just how much the maps sell for, but that I can use the maps to get leads of potential customers, and then follow up on these customers to generate secondary monetization.

For our own business, the first-stage rocket is users entering the live broadcast room, the second-stage rocket is users generating demand to purchase maps, and the third-stage rocket is users generating demand to purchase Douchacha services.

Referring to this idea, you will find that many businesses can replicate similar processes. You only need to make a transitional product around your own business, such as an album, a document, an information package, etc., and then finally transform your core business.

Why do this?

Because the traffic of live e-commerce is divided into two parts, one part is video traffic, and the other part is transaction conversion in the live broadcast room.

If we only look at video traffic, it means putting a shopping cart under a video. This video not only needs to attract your attention, but also make you recognize it and click to place an order. Such videos are extremely difficult to make.

But if the live broadcast room cooperates, this matter will be simpler. The video only needs to attract the user's interest and lead the user to the live broadcast room (for example, we use a map).

If we break down the entire conversion process, the content of the video corresponds to the demographic profile of the target user, attracting the precise group of people to a conversion field, just like using store signs to attract people strolling on the street into the store.

In the conversion field, sales talents will further convert customers, just like a person strolling into a store will ask in detail about product styles, features, prices, preferential policies, etc. If they are satisfied, they will place an order.

Through short videos + live broadcasts, the overall conversion efficiency can be much higher and easier.

02. How to enter the Douyin live streaming sales market?

The picture below shows the entry data of different GMV dimensions. It can be seen that at this stage everyone is entering the market quite crazily, with more than 100,000 new live broadcast rooms opened every month. At the same time, it can be seen that there is a certain degree of Matthew effect.

In addition, the number of merchants entering the market is gradually increasing. For accounts with monthly sales exceeding 1 million, the proportion of enterprise accounts has increased from 35% in July last year to 60% in May this year; for accounts with monthly sales exceeding 10 million, the proportion of enterprise accounts has increased from 23% in July last year to 51% in May this year. It can be said that self-broadcasting by merchants has become a necessary basic foundation.

1) Choose a blue ocean category

So what do we need to do before entering the market? I think we should choose some blue ocean categories first.

We know that clothing is already a red ocean category on Douyin, but what if you still want to do clothing at this time (for example, because you have your own supply chain)?

You can look for blue ocean categories that are subdivided under the red ocean categories. For example, at the beginning of the year, underwear was a category that not many people were doing. There were no stores and the shelves were not full. At that time, if you were the first to do underwear, you could seize the blue ocean.

There are many such subdivisions, so in the early stage we can look at the monthly sales and the highest daily sales of the top live broadcast rooms and influencers in each category; then look at the effect of their conversion between people, goods and places, and judge whether there is any advantage in competing with them; finally, choose which track to enter is a more reasonable way.

The picture below shows the logic behind enterprises entering the market. I believe that category dividends are greater than brand dividends. By choosing a category that is easy to enter, you can "outlive" your competitors and then wait for the overall market to grow.

2) How do brands choose anchors?

If a brand wants to do live e-commerce on Douyin, it can start with the top anchors and then select mid-level anchors.

Why? Because the top anchors have general traffic, they are actually To B. The main purpose is to let the entire industry know that you have entered Douyin, and let all the mid-level anchors know that "Luo Yonghao has led you, so I can also lead you."

Finding top anchors may not necessarily make you money. The truly accurate traffic comes from vertical accounts. Although the traffic from vertical account anchors is not that large, it is very accurate, the ROI will be more ideal, and the conversion efficiency will be more in line with the conversion results you have achieved.

After the final vertical number is running smoothly, you can build your own anchor base and incubate anchors.

Once there are several anchors in the live broadcast base who are doing well, they will be promoted to "number anchors" and eventually "expert anchors". This is a process of "starting from left to right and upgrading from right to left".

03. How to increase volume with the help of platform algorithms?

The entire traffic ecology of Douyin has gone through several cycles:

At the beginning, there was a lack of people to do live streaming and sell goods. Until Luo Yonghao started live streaming, everyone knew that live streaming could make money, and there were more live streaming rooms.

Then there is a lack of live broadcast time. At this time, whoever broadcasts every day will be given traffic by the platform;

When everyone starts broadcasting every day, they will find that 2 hours a day is not enough, they need to broadcast all day, and even build a live broadcast matrix;

In the future, if the platform wants to eliminate junk live broadcast rooms, the live broadcast rooms will need to improve their quality requirements in all aspects from the dimensions of people, goods and places.

…

It can be seen that the platform is actually using various traffic reward methods, hoping that our brands and merchants can cooperate with the platform to take some actions to fill the platform's content and fill the platform's shelves. This can be understood as a kind of "exchange."

So one of the big opportunities lies in whether we can understand what the platform currently lacks and how we can help the platform fill this gap. If we can do this, we will have the opportunity to receive huge traffic support.

1) Tik Tok algorithm logic - parallel horse racing

So what is the algorithm logic of the Tik Tok platform?

To sum it up in one simple sentence is “parallel horse racing”.

You don’t have to worry about the Douyin algorithm comparing you with Luo Yonghao in the live broadcast room you just opened. The platform will only compare all the thousands of live broadcast rooms that have recently entered the market.

As long as the conversion ability is slightly higher than that of the live broadcast room of the same level, the platform will push you to the next traffic pool, which may be a level with dozens of people online. If the conversion of people, goods and places in this pool is relatively good, the platform will push you to the next traffic level with hundreds of people...

So when we first start live streaming and there are only a few people online in the live streaming room, don’t be anxious. This is the best time. Why?

Think about it, your competitors are all live broadcast rooms with only a few people online. You don’t need to rush to invest in DOU+ or do flash sales. This is the opportunity that Douyin gives you to train your ability to connect people, goods and places.

The longer you protect your expectations, the better your core basic capabilities will be consolidated, so that you can maintain stability when you reach the next level of traffic instead of falling back.

So don't be in a hurry at this time, and use some "sexy operations" or some logic to deceive the platform to raise the level of the live broadcast room. It seems to be very powerful in the short term, and it can attract 10,000 viewers in three days. This is very scary. It is equivalent to spending money to race with Liu Xiang. The result will of course be miserable.

You should train first, and when your muscles are very strong, you can use platform tools such as DOU+ to achieve better results.

2) ecpm, the core indicator of Douyin advertising

Looking at the traffic delivery, each live broadcast room and each short video can be regarded as a simple traffic material. How does Douyin distribute traffic to these traffic materials?

In fact, a core indicator is ecm – the value generated to the platform by each material’s thousand exposures.

For example, the bid for video A is based on the transaction, and the bid for video B is based on the click of the store shopping cart. It doesn’t matter. The platform will try to give you some traffic test to see what the conversion rate is, and finally how much money the platform can make when converted into thousands of exposures.

Finally, the platform will put the hundreds of materials with the highest ecpm (and sufficient budget) into the largest traffic pool to ensure that most users can access them. Thousands or tens of thousands of materials with inferior ecpm are placed in general traffic pools to ensure that some users can see them. Materials with poor ecpm are placed in traffic pools with low volume and are hardly displayed to users.

This conclusion is drawn based on our experiments. I have done tests with dozens of students in some small classes. For example, in the same live broadcast room, I asked different students to invest 100 yuan in DOU+, and then observed the data of each person.

The results showed that some students had a cost-effectiveness ratio of 1:20, which means they could sell products worth 20 yuan for 1 yuan; but some students had a cost-effectiveness ratio of 1:10, 1:9, 1:7, and some had a cost-effectiveness ratio of 1:0.1 or 1:0.3. Different people got different results.

Why does this result occur?

At the same time point and in the same live broadcast room, is the logic of conversion between people, goods and places similar? At this point in time, the overall user population is similar, so why do different people get different results when investing in the same live broadcast room?

Because the platform provides you with a different test traffic pool. In some traffic pools, there may be several audiences for your product among a thousand people, so the conversion rate of this wave of delivery will be higher.

If the platform wants to measure your entire material conversion logic, it needs to continuously test the traffic of this material. Only when your test sample is large enough will stable and accurate results appear.

Therefore, it is recommended that when you are doing advertising, you must give the platform enough testing time. Don’t rush in, but rather “slowly simmer” to allow the platform to slowly learn what kind of people our live broadcast room is suitable for. After the platform learns, it will naturally give you more accurate traffic. If you increase your investment at this time, you will be more competitive.

The following picture is a classic live broadcast room conversion model, which can solve most problems. Many people who work in App or WeChat operations know the AARRR model. In fact, the conversion and retention logic of the live broadcast room is similar to AARRR, but the pace is faster.

For example, many people who make short videos have heard a saying that they need to retain users in the first 3 seconds. If they cannot retain users within 3 seconds, they will leave.

In our opinion, this statement needs to be iterated, and users must be retained in the first 0.03 seconds. Why?

Think about it, when you were browsing Tik Tok, you didn’t watch every video for 3 seconds. For some videos, you might decide to scroll away after just a few tenths of a second. In fact, a lot of traffic is wasted at this time.

During these 0.03 seconds, your copy is not important, and what you say is no longer important, because users do not have time to listen to your complete sentence. What is more important is your picture and the way you speak.

For example, people who are good at short videos, like @大蓝, roll their eyes when they speak. Why do they do that?

Perhaps by rolling his eyes upwards, many users can spend 0.03 seconds without scrolling away, giving them a chance to listen to him finish a sentence, or even continue listening to the short video for 7 or 15 seconds.

The same principle applies to why many live broadcast rooms are filled with good-looking young men and women, and why Wang Leehom shaves while selling goods.

In general, in a traffic ecosystem like Douyin, the overall conversion pace is faster.

04. How to build a Douyin live broadcast room?

The picture below shows the process of setting up a Douyin live broadcast room. You can take a look at it.

1) How to configure the live broadcast room personnel

There are simple and complex versions of setting up a live broadcast room. The two most important positions, besides the anchor, are what we call PM (project manager/operator). Ordinary operations are more about execution work, such as store operations and live broadcast room control.

Traders are required to have very high comprehensive abilities. They need to know the crowd portrait, understand the algorithm rules of the platform, know how to stimulate the platform's natural push flow, and understand the people, goods and places in the live broadcast room...

Ordinary operations are to do better in a specific direction. For example, if you are very good at video traffic, you will be responsible for the editing, directing, acting, and shooting of short videos; if you are good at communicating with anchors and selecting goods, you will be responsible for the operation and maintenance of the live broadcast room...

The complex version of the live broadcast room further splits the types of work and breaks down the goals. For example, there are people who are responsible for branding (supply chain), some are responsible for private domains, and there are people who operate the middle platform. There are people who are responsible for the front end (anchor, operation, and field control), and there are also people who are responsible for the back end (content, delivery, business, customer service, and delivery).

If we want to operate a live broadcast room on behalf of others, the overall staffing will be more complicated. picture

2) How to recruit and manage anchors

If you are recruiting in a city like Hangzhou where there are many anchors, you can just find ready-made ones. The interview is a trial broadcast, and you can hire them if they can sell the goods.

Now many live-streaming e-commerce companies, including "Make Friends", have moved to Hangzhou, and the salaries of anchors in Hangzhou have also increased. We think that anchors who used to earn 12,000 or 13,000 yuan a month are now asking for 18,000 yuan, and are being poached every day.

But if you want to build a live broadcast ecosystem in other cities, you need to have training capabilities and train your own anchors. If you can turn the front desk into an anchor, the company will be very strong.

3) Rationalize and customize KPIs

In addition to recruitment and training, rationalizing and customizing KPIs can also effectively improve key data.

For example, we will give different bonuses to operations colleagues for videos that are very popular, moderately popular, and slightly popular, thereby driving operations thinking and efforts. In this way, the operator will find ways to get users to like the video, and the exposure of a video with over 10,000 likes may be millions or even tens of millions.

For example, one of our videos that received over 10,000 likes eventually converted into 50,000 children’s books, so the team should give commissions to the corresponding students as an incentive.

05. How to do live broadcast data analysis?

First of all, we need to understand the level of our live broadcast room.

We divided all Douyin live broadcast rooms into 6 major levels according to retention ability and traffic capacity (in fact, there are 100 small levels in them).

At the beginning, the live broadcast rooms we built were E-level rooms, with a few people online at the same time, and about 100 people watching the entire live broadcast cycle. The highest S-level live broadcast room may have millions or even tens of millions of viewers.

According to our statistics, 98% of the live broadcast rooms are below level C, and only 2% are above level B. These 2% of live broadcast rooms account for 60% of the platform's traffic. So if you can make it to the C level, you can basically make stable money.

Image source: Douchacha

Take a quick look at the comparison between the C-level live broadcast room on the left and the B-level live broadcast room on the right in the picture below. The C-level live broadcast room had a lot of traffic in the early stage, but failed to retain users; if the retention problem was solved, the traffic level would be upgraded to B-level, with more than 100,000 viewers each time.

How to do it? The answer is review. We can analyze when the anchor’s traffic drops to see if users don’t like the content he or she is broadcasting, or if he or she said something he or she shouldn’t have said at that time.

We joke internally that after every live broadcast, we have to review it to the point where we feel very stupid for having conducted that live broadcast. In particular, the anchor should not blame the operation, the operation should not blame the product selection, the product selection should be blamed by the boss, and the boss should not blame the anchor... Only in this way can there be a qualitative improvement in the people, goods and venue next time.

In-depth review is what every live broadcast room should do in this ecosystem, because if you don’t make progress, others will, and you will be eliminated in the process of "parallel horse racing."

Let’s take a look at the traffic composition of the live broadcast room. At the current stage, the healthy traffic composition is: paid traffic (feed + Douyin) does not exceed 10%; among the free traffic, live broadcast room recommendations must be ≥50%; fan traffic ≤20%; video traffic ≥ 20%.

There are three main dimensions for analyzing expert accounts: the first is to analyze the traffic in the live broadcast room; the second is to analyze the videos; and the third is to analyze the live broadcast products. For example, when analyzing products, we need to determine which ones are traffic-generating products and which ones are profitable products, and how to combine these products.

There are five main dimensions for upgrading the live broadcast room. The first is the video's traffic diversion power, the second is the traffic retention rate, the third is the UV value, the fourth is the audience interaction rate, and the fifth is the ability to bring goods. Please see the figure below for details.

In addition, if you want to do category expert delivery, you can also use Douchacha to do delivery analysis, including:

Analyze the gender distribution of influencers’ fans and determine the categories of goods they promote;

Analyze the hot-selling categories and determine the categories of the products that the influencer has promoted based on the categories of products that have been popular in the past.

Analyze the audience's consumption capacity and determine the product categories based on the percentage of users who have previously sold products to the influencer and the average order value.

06. Conclusion

Finally, if you want to develop a live streaming e-commerce ecosystem, you can combine the four major business matrices: merchant self-broadcasting and expert matrix for daily sales management; marketing activities and top influencers for product sales explosion.

Finally, Douchacha positions itself as a "business porter". We can help you move the business model of Xiaohongshu, Kuaishou, Weibo and even Taobao to Douyin. We can also help you move the conversion logic in your own App to Douyin and create a monetization logic suitable for Douyin users and the Douyin platform.

Author: Operation Research Society

Source: Operation Research Society