Will e-commerce advertising replicate the achievements of information flow advertising?

Juliang Qianchuan is ByteDance’s integrated e-commerce advertising platform. It also integrates multiple e-commerce advertising capabilities such as DOU+, Luban, and e-commerce advertising, and focuses on Douyin e-commerce advertising promotion. At the same time, we will deepen our integration with Douyin stores and better adapt to the content e-commerce scenarios to create a new integrated advertising e-commerce platform. It is a brand-new e-commerce advertising brand. The author of this article will talk about the advertising world in interest e-commerce from the following points.

1. Shopping or leisure?

There is a very "retro" detail in "Hello, Li Huanying", which has just broken 5.4 billion yuan at the box office: when she heard that a new TV was available, Li Huanying immediately rushed into the supply and marketing cooperative with her precious TV ticket and found that there were already many people queuing in front of her.

In that era without social media, the queues for Li Huanying were different from the queues for Wenheyou today. She really just wanted to buy a TV, not to join in the carnival of checking in at an Internet celebrity store. Her purpose was very simple.

In the 1980s and 1990s, supply and marketing cooperatives and convenience stores across the country were the main channels for people to shop. Dense shelves, cramped space, salespeople and consumers on both sides of the counters, all the details remind you that this is just a place to buy things. Before consumers walk in, they often have clear shopping goals.

The subsequent emergence of supermarkets and department stores partially changed this situation. They gave people more opportunities to shop freely, and the comfortable and friendly environment also made shopping a leisure activity. Then, urban complexes such as Wanda, Joy City, and Taikoo Li began to rise. Because they integrate multiple functions such as shopping, entertainment, and parent-child activities, they have become places where people can stay for a long time.

If we examine the development of offline retail formats from the dimension of "functionality-leisure", we will find that this is a process in which functionality gradually decreases and leisure continues to increase. The message hidden deep within this clue is that it is not enough to simply satisfy demand through "buying", and stimulating or even creating demand when people are "shopping" has become the new theme.

On April 8, Kang Zeyu, President of Douyin E-Commerce, introduced the concept of "interest e-commerce" at the 2021 Douyin E-Commerce Ecosystem Conference.

The so-called interest-based e-commerce refers to "e-commerce that is based on people's yearning for a better life, satisfies users' potential shopping interests, and improves consumers' quality of life." This concept has sparked some debate, but we can also see that many vertical media in the retail industry have identified it as a "new market" or "new business."

If we continue to use the "functionality-leisure" framework to analyze e-commerce, we will find that the changes that have occurred in offline formats are replicated online: the earliest shelf e-commerce and social e-commerce (referring to early WeChat business) emphasized the functionality of shopping from the perspectives of goods and people respectively. The content e-commerce that emerged around 2016 allowed the audience to browse, while the current interest e-commerce, in turn, hopes to stimulate shopping through leisure.

Online and offline business formats under the dimension of "functionality-leisure"

At the meeting, Kang Zeyu mentioned that research by a third-party agency showed that the market space is expected to reach 9.5 trillion by 2023. Because interest e-commerce stimulates and creates demand, it also has a higher ceiling.

2. The big advertising market behind it

Judging from the information revealed at the Douyin E-commerce Ecosystem Conference, interest e-commerce has at least three characteristics:

First, it emphasizes the video content, which makes it different from other e-commerce platforms that started out with pictures and texts. Compared with pictures and texts, the consumption decision chain triggered by videos is shorter and can easily prompt people to consume quickly. Its natural and native characteristics give it an advantage in the wave of "e-commerce + video";

Second, it emphasizes the advantage of information distribution, which makes it different from other similar competing platforms. The "interest" emphasized by Douyin e-commerce refers more to the platform's precise distribution of public domain traffic. This means that the platform will be more proactive in identifying potential trading opportunities and awakening demand;

Third, emphasize expanding the market and attracting more types of merchants. For example, farmers in remote areas and factory owners in industrial belts were not good at speaking and had difficulty opening up sales channels in the past. However, under the new e-commerce model, the unpackaged plain language and "simple" environment are attractive, which has allowed more merchants to join and become e-commerce participants.

These unique features give Douyin e-commerce the potential to become a new trading platform. At the same time, Douyin e-commerce will naturally give birth to its own exclusive advertising platform. For example, the saying “One Number, One Store, and One Thousand Rivers” was mentioned at this meeting: “Number” and “Store” are not difficult to understand, they are Douyin account and Douyin store respectively; and the relatively unfamiliar “Qianchuan” refers to the new e-commerce advertising platform under Bytedance: Bytedance Qianchuan.

The emergence of Juliang Qianchuan can bring some help to merchants in operating Douyin e-commerce businesses:

First, because it is specifically aimed at e-commerce scenarios, the integrated Juliang Qianchuan can fully penetrate the e-commerce market to discover and meet the needs of merchants, ensuring the depth of service;

Secondly, to make merchants more agile and reduce their costs, Juliang Qianchuan allows merchants to place orders in one place through one account;

Comparison between original advertising platforms in the e-commerce scenarios of Juliang Qianchuan and Douyin

Finally, the integration of data from all links will help make delivery more intelligent. For example, Juleliang Qianchuan’s rapid promotion model allows advertisers to complete advertising in a “fool-proof” way by simply setting key information such as budget and bid.

Large markets often give rise to large advertising platforms. Considering the expected GMV of 9.5 trillion yuan for interest e-commerce in the next three years, the potential of Juliang Qianchuan cannot be underestimated.

3. Public domain, private domain, and commercial domain

In e-commerce operations, there is a term called "three domains" for traffic: public domain, private domain and business domain.

The public domain refers to the traffic actively distributed by the platform, the private domain refers to the traffic that is accumulated by merchants and can be reused repeatedly, and the commercial domain is the traffic cut out from the public domain traffic and requires merchants to pay for use.

Comparison of public, private, and commercial domain traffic

If we look at it from the perspective of the three domains, we will find that although traditional e-commerce marketing is still the largest part, it also has some hidden dangers:

In the public domain, users' attention is shifting from pictures and texts to short videos and live broadcasts. Data from QuestMobile shows that the scale of short video users and average viewing time per person increased by 6.0% and 39.7% respectively last year. The total amount of audience attention is limited. When video content attracts attention, it also means that the expansion of the scale of public domain traffic of traditional e-commerce is limited.

In the private domain, shelf e-commerce previously lacked the mechanism of social fission and private domain sedimentation. The one-time transaction model of "you must pay first for every sale of goods" is not friendly enough to small and medium-sized businesses and brands seeking long-term effects; in the commercial domain, the high traffic costs have become an unbearable burden, which is caused by the scarcity of traffic resources and the fierce competition among businesses.

Whether it can solve the current pain points of merchant operations is an important issue for Douyin e-commerce. Therefore, it chose to break through by emphasizing the videoization of content, the advantages of information distribution and attracting more types of merchants. In particular, the distribution of public domain traffic based on interests has become the foundation of the entire interest-based e-commerce.

So the question is, since the system can accurately distribute public domain traffic based on user interests, is there still a need for the huge amount of commercial domain traffic from Qianchuan to exist? The answer is yes, and the importance of advertising in this process can be explained by the “snowball” model.

A snowball cannot appear out of nothing. If you want the snowball to roll bigger, in addition to finding a ski field, you also need to have an initial small snowball in your hand. In Douyin e-commerce, the huge public domain traffic is the ski resort, and the accumulation of initial traffic needs to be carried out simultaneously through the public domain and the commercial domain, and cannot rely solely on public domain distribution. It also requires the cooperation and promotion of commercial domain traffic.

So generally speaking, the interactive relationship between the public domain, private domain and commercial domain can be explained by three stages: first, in the initial stage, the traffic is guided to settle in the private domain through the public domain and the commercial domain; second, when the private domain accumulates to a certain scale, the increase in user activity, transaction volume, etc. will trigger the system to allocate more public domain traffic; finally, merchants can purchase commercial domain traffic during daily sales to ensure the continued stability of their business, and they can occupy more transaction opportunities during major promotion nodes and peak consumption seasons.

Many people have misunderstandings about interest e-commerce, thinking that it is a model that completely distributes public domain traffic. But this is not the case in reality. Advertising plays a variety of roles in it: when the business is in its infancy, it helps merchants quickly get through the cold start period; in the growth stage, it assists merchants to repeatedly reach and expand their target audience and continue to obtain transaction opportunities; in the mature stage, it becomes a "stabilizer" for daily sales and an "amplifier" for major promotion nodes.

So you will see that in the scenario of interest-based e-commerce, the role of advertising has not been eliminated, but has become critical.

4. Live streaming is a technical job

Smartphones, ring lights, and good-looking anchors are not everything for live streaming. Or to be more precise, they are just the tip of the iceberg that people can see above the water, while few people pay attention to the complexity beneath the surface. Due to fierce competition, live streaming has become an increasingly technical job with complicated rules and considerable difficulty.

How many steps are needed to complete a live broadcast? Suning.com has a lot to say on this issue. During this year's Spring Festival, a live broadcast by Suning.com had a total of 17.5 million viewers, an increase of 300,000 followers, and a final transaction volume of 308 million yuan. If you knew that it divided a single live broadcast into seven stages, you might not be surprised by this result.

It is divided into seven stages and responsibilities as follows:

1. During the preparation period, select products and roughly decide on the advertising strategy;
2. During the warm-up period, use popular products (products that users will quickly purchase) to attract traffic and slowly increase the audience through bidding ads;
3. During the rising period, launch a large number of products intensively to confirm the hot products, and choose to expand the launch among the people with good transaction data in the live broadcast room;
4. During the stable period, hot products are returned to boost sales, and a small amount of information flow ads are placed to stabilize the number of viewers;
5. During the explosive growth period, sales are boosted through hot products + anchors + celebrities. During this stage, large amounts of advertising will be invested to create buzz and attract traffic.
6. During the return period, use the best-selling products to stabilize traffic, stop additional advertising investment, and use natural traffic to match the return of the best-selling products;
7. The focus of the final stage is to settle the audience in the live broadcast room into the private traffic pool.

The seven stages of Suning.com’s live broadcast

Two interesting things can be discovered from Suning’s extremely sophisticated operational strategy: First, preparing for a live broadcast is not as simple as imagined, as it involves multiple aspects such as product selection, strategy, rhetoric, and data analysis; second, advertising plays an extremely critical role in it, and corresponding advertising plans need to be formulated whether it is preheating, attracting traffic, or exploding the live broadcast room.

Therefore, Douyin e-commerce launched a dedicated advertising platform, which is itself intended to serve the e-commerce scenario. This can be seen from the many capabilities of Juleliang Qianchuan.

For example, in the selection of conversion goals, Bytedance Qianchuan provides merchants with options such as "enter the live broadcast room", "click on products in the live broadcast room", "place orders in the live broadcast room", and "increase fans in the live broadcast room"; in creative production, merchants can directly use the materials in the live broadcast room to automatically generate delivery materials; for new merchants and small and medium-sized merchants who have no experience in advertising, they can also use the hosted delivery model in the platform.

Another very noteworthy change is that in the past only those merchants who had Douyin stores could open e-commerce advertising accounts. On the new platform, almost every role in the e-commerce chain, including merchants, MCNs, influencers, agents and service providers, can open an account, even if they do not have their own Douyin store.

When all roles can be active on the same platform, there will be opportunities to derive many new ways of playing: merchants can directly authorize products to MCN agencies and influencers, who will advertise the authorized products; influencers can also authorize content to merchants, and merchants can directly convert the content into advertising materials for placement. As the characters in live broadcasts and the rules for interaction between them become irreversibly complex, the huge amount of Qianchuan, which is specifically designed for e-commerce scenarios, has begun to carry this complexity well.

In recent years, the digital advertising industry has clearly shown the characteristics of "weakening universality". The so-called "weakened universality" means that advertisers are no longer satisfied with general products that are "applicable everywhere" and they require platforms to provide solutions for specific industries or scenarios. For example, the purchasing decision chains in the education industry and the automotive industry are completely different, so the platform needs to develop specific advertising products respectively.

Similarly, when live streaming becomes complicated, general advertising products and platforms naturally cannot meet the complex needs of e-commerce scenarios, and Juliang Qianchuan came into being.

5. The next win-win growth pole?

From content e-commerce, social e-commerce, trust e-commerce to interest e-commerce, the reason why various e-commerce models have emerged in recent years is that e-commerce infrastructure such as payment and logistics has become increasingly perfect. In this context, consumer attention becomes an important resource.

When netizens' attention began to shift significantly to video platforms such as short videos, the growth trend of Douyin's e-commerce became obvious, and this was even reflected on both the supply and demand sides - official data showed that the GMV of Douyin stores increased 50 times in the past year, which was due to the expansion of the number of merchants and consumers.

Following this trend, many businesses have begun to increase their advertising spending and have achieved good results. It is reported that in the first half of last year alone, Huaxizi's total advertising expenditure on Douyin e-commerce reached hundreds of millions, with 90 million and 70 million invested in brand advertising and performance advertising respectively; Bosideng used advertising to leverage 1.6 million GMV in a single store broadcast, with a direct ROI of 5.6; in addition, the ROI of e-commerce advertising for some home furnishing industry brands even reached 10.2.

From these real operational cases, we can find that the position of advertising in Douyin e-commerce is becoming important, and this importance comes from a basic function of advertising: communicating production and sales.

In fact, with the rapid development of commercial society, the scale of producers and consumers has expanded rapidly, resulting in reduced matching efficiency. At this time, the emergence of advertising enables both production and sales parties to find each other more efficiently, thereby facilitating a large number of transactions. This is the mission of advertising.

As more and more businesses open Douyin stores and more consumers start watching Douyin live broadcasts, it becomes a natural phenomenon that the status of advertising in Douyin e-commerce is increasingly enhanced. A large market will inevitably lead to the emergence of large advertising platforms. The unlimited abundance of information flow, commodity flow and demand requires Douyin e-commerce to integrate various advertising capabilities to build an advertising platform that is strong enough to meet demand.

In fact, "fast" can be used to describe the pace of the massive layout of e-commerce advertising platforms. In the rapidly changing digital advertising industry, the earlier you start, the more time you will have to understand market needs, accumulate experience and build capabilities.

However, the story that happened in information flow advertising seems to be happening again in e-commerce advertising. When Douyin e-commerce was just starting to gain momentum, it quickly deployed the integrated marketing platform, Bytedance Qianchuan, which will give Bytedance a first-mover advantage in exploring the marketing rules of short videos and live streaming e-commerce in the future. If we take into account that the conversion efficiency of e-commerce advertising is much higher than that of information flow advertising, the derived market opportunities are expected to become another driving force for the growth of its advertising revenue.

The name of Juliang Qianchuan is taken from "The rivers and seas are vast, and the wind is right for sailing", which happens to describe the opportunities it is facing - the first half of the sentence refers to the vast market, and the second half describes the state of being ready to go.

Author: Advertising Notebook

Source: Advertising Notebook