Starting from setting up stalls, let’s talk about advertising optimization techniques!

There is a lot of knowledge hidden behind the small street stalls, and the economics and market concepts involved are also worth considering when applied to other industries. The author of this article starts from the core driving force of the street stall economy, analyzes and studies the advertising market, summarizes the issues that need attention and optimization directions, and hopes to inspire you~

1. The core driving force of the street stall economy

Setting up street stalls, this simple economic phenomenon, was not initially organized by anyone, but rather the small vendors spontaneously and naturally "gathered" together to form various morning markets, night markets, and commercial streets.

Let me ask you a question, and you may not be able to answer it: Why do we have to gather together instead of staying away from each other?

This phenomenon, which we are already accustomed to, hides a very important economic logic: market equilibrium theory.

Let’s take the simplest example. Suppose there are many residents evenly distributed on both sides of Nanluoguxiang in Beijing, and everyone wants to eat a kind of fruit - orange. There were only two vendors, A and B, on the street, initially located at the south and north ends of the street respectively.

buyer:

Assuming that the quality and price of oranges are the same, the residents' decision to buy oranges will obviously only depend on the distance from the stall.

To break it down further, the costs for a consumer to eat an orange include: 1. Bid; 2. “Shoe money”. If the prices and quality of each stall are the same, everyone will choose the option with the shortest distance - that is, the market share of vendors A and B depends on how close the stall is to each resident.

Seller:

The purpose of operations A and B is to expand market share and earn more profits. How will A at the north exit expand its "occupancy rate"? There is obviously a solution: move a little south. Residents from the north would still come to buy, and residents in the middle of the street would come to the north to buy; the further south he moved, the more people would come to buy his oranges.

Since everyone has equal rights in a market economy and people make rational decisions, vendor B will also take similar actions. If you move one foot, I will move ten feet. Eventually, both A and B moved to the center of the street and divided the market equally again.

The Power of Nash Equilibrium:

At the beginning, the "market structure" at both ends of the street was "unbalanced" because although A and B shared the market equally at that time, both sides had the motivation to change their current situation; but when it moved to the center of the street, a "market equilibrium" was formed. At this time, no one had the motivation to change their position - no matter who it was, if they moved a little bit, they would lose some customers. This achieves a Nash equilibrium.

The concept of market equilibrium has always been a behavioral concept, not a simple “total supply = total demand”. As a result, we see the phenomenon of street stalls clustered together - competitors that are originally "irreconcilable" have to stand side by side. As long as the market has not reached equilibrium, they will use various competitive means to seize market share.

2. The core driving force of the advertising market

The same principle applies to today's online advertising model. It’s the same when we do bidding advertising, so why is there a second bidding strategy? Its core driving force is also to achieve a Nash equilibrium among advertisers.

Driven by profit, companies consciously or unconsciously participate in the competition for advertising traffic. Traffic is becoming more and more expensive, creative cycles are becoming shorter and shorter, and the creativity and landing pages of peers are rapidly becoming the same. This is the reason - we must first attract as much traffic as possible, and as long as it is an effective method, I must use it if others are forced to do so, and I must change quickly if others change.

Of course, the situation of online advertising is much more complicated than that of street vendors, but when we understand the situation, we can roughly judge where the next advertising focus should be placed . The days of relying on changing the distance between stalls to gain market share are long gone; the traffic war is based on the fact that “everyone sets up stalls in the middle of the street.”

In other words, the big players in the advertising market are promoting a new round of Nash equilibrium in marketing: an equilibrium game of information matching between buyers and sellers. Therefore, the more traffic a seller has, the better, because there is no free lunch. Traffic means cost. The more we understand the buyers of our products, the more consumer data we have, and the more accurate the prediction mechanism, the greater our chances of winning.

Let me emphasize again that more traffic is not necessarily better. Today, it seems that the traffic wars that various brands are fighting are actually information wars in essence. It's like you spend a lot of money on a stall to sell a villa at a night market, but the traffic doesn't match. The greater the traffic, the more you lose. If you can find a way to match your price, quality, and service to the most suitable traffic group, you win.

The embarrassing thing is that the preliminary information on traffic is in the hands of major platforms. Is there any way for brands to optimize personalized matching in the advertising process?

3. The inspiration of “stall stalls” for “ advertising optimization ”

The answer is: There is a way, develop post-marketing capabilities.

For example, what advertisers are competing for now is: where is the best place to set up a stall? When to go? Which stall should I choose for setting up a stall? How to attract people? What should I say when a guest comes?

The reality is:

• There are limited places to set up stalls, and the approximate customer flow and crowd quality are pretty well known;
• Everyone knows the best time to set up a stall, and it can be divided into morning market, night market, and weekend market.
• Choosing a stall is important, but the quality of the stall is proportional to the cost. You need to consider your own profit margin, scale, and resource allocation strategy. It is not something that can be changed easily. It is already very good to get a reasonably priced location.

The only thing we can focus on is how to attract customers? How to talk to customers to increase their purchase rate? These two things. Therefore, for companies that want to stand out in the future, the focus of their investment conversions should be placed on these two post-processing capabilities: the speed of feedback on creative ideas and the speed of personalized response to traffic.

1. How to attract people? (Increase the feedback speed of advertising creativity)

When customers come, how do you catch their attention? If we can learn and predict user behavior through effective data, we don’t have to guess or understand the user’s psychology in every detail (not to mention that it is difficult for humans to distinguish and grasp the different psychological states in various marketing scenarios). We just need to give them the answers they need.

To give a simple example, I am a stall owner selling books. I have two smart devices on both sides of the stall, which can determine which book titles the customers passing by are paying attention to. So, if a user who is interested in tomb-raiding novels comes over, I will illuminate the tomb-raiding series with lights and play the audio promotional video of tomb-raiding novels at the same time. The chance of him paying attention to me will definitely double.

When it comes to online advertising, the situation is not so simple, but the logic is the same. As advertisers, it is difficult for us to know the true intention of a visitor, but the visitor's conversion characteristics can be continuously learned - if marketers can quickly adjust their creative ideas to keep up with customer preferences and changes under different accounts, then to a certain extent, they can still "win by quantity" and "win by speed."

The essence of creative traffic generation is to use data analysis tools, testing tools, and AI learning tools to effectively prevent marketers from "wanting to think" and more objectively produce and screen good materials to match the rapidly changing preferences of customers.

2. What should you say when guests come? (Personalized response speed to traffic)

Since you took a second look at me among the vast amount of information, I must let you know: how much you need me.

These days, I saw an interesting term in an article about "Street Stall Economy and New Media", called "Pre-placement of Essence".

When setting up a street stall, you need to put the best products in front: place the products with the best sales data on both sides, with the one on the far left facing left, the one on the far right facing right, and the one in the middle facing front. No matter whether people come from the left or the right, they can see the best-selling products first.

The advertising landing page needs to put the essence first: it can attract users in one second. Why don’t customers read the landing page carefully? Why did you leave as soon as you came in? When we complain that the dwell time on the landing page is too short and the reading completion rate is too low, we might as well recall the logic of street stall design. Are the main image and headline particularly clear and expressive? Are you constantly exploring new versions of the selling points and creativity of the landing page? Do you have the ability to provide personalized landing page content for users who click on your ads?

4. Avoid falling into the trap of "solidification optimization"

Finally, we have to talk about some optimization misunderstandings that often occur when we practice with customers.

You know, the "essence of the landing page" is much more difficult and complicated to judge than the "essence of the street stall". This causes advertisers to unknowingly create a fatal gap in the core link of the landing page. Here are two relatively new optimization suggestions that you can think about together.

1. The “diligent” marketing materials can make up for the “sluggish” traffic quality to a certain extent

If we can change our creative ideas more often, keep our marketing fresh, follow hot topics, and know how to leverage other people's power, we can largely make up for the conversion losses caused by inaccurate traffic quality. If you show different landing page titles to different people, even if they are visitors who click on the same ad, their feelings will be very different. Alternatively, different retention pop-up windows can be displayed to customers who have taken different actions, making the temptation of discounts more targeted.

But here is a very realistic question: If oCPC is enabled, do you dare to easily change the link of the landing page? We can’t change the landing page, chase hot topics, or change creative ideas. However, if we have the ability to display content dynamically , we can set up rich materials and creativity, show different versions to different users, and thus "improve the quality of traffic" in disguise.

2. “If you want to do your work well, you must first sharpen your tools.”

"Our planning team already knows all the landing page optimization suggestions you mentioned. Can you give us some new ideas?"

A client in the Internet finance industry that Lingxi met before scoffed at some of the landing page optimization suggestions we gave. It’s not that the user’s statement is necessarily wrong. Our marketing planners probably understand many abstract user insights and conclusions. But this sentence is not professional, why?

The optimization of landing pages must be data-driven. Last month’s performance does not represent next month’s performance, and the performance of group A cannot simulate that of group B. We must first visualize the data so that marketing planners can understand the latest behavioral characteristics of users, and then make explainable optimization plans based on such insights.

In addition, if we still rely solely on manual operations to optimize pages today, even if we rely on data analysis tools, it is likely to be insufficient. Because human reaction and operation speed cannot be compared with AI, the platform you put it on is using programming to help you find a large number of users, but you receive them with pages that cannot learn and improve intelligently. There is a gap in the connection.

Many brands have actually begun to make attempts to create intelligently optimized articles on landing pages - using AI tools to help marketing teams automatically match dynamic content, so that everyone who clicks in and sees the landing page can get the best experience.

We still have many optimization mechanisms that we are exploring, but weapons must be continuously invested in and polished in order to become more and more user-friendly. Let us all encourage each other.

Author: Agnes

Source: Lingxi Marketing Notes