There is no public domain traffic in the world

2020 is also known as the "first year of the awakening of private domain traffic". Under the general trend, private domain traffic has become the only way for many companies to go against the current. Private domain traffic is traffic owned by an enterprise itself, which is different from public domain traffic .

01

The counterpart to private domain traffic seems to be public domain traffic, public versus private, a neat parallel. Wait a minute! Is there still public domain traffic now?

Traffic that has not been sold is public domain traffic, and traffic that has been priced and sold is commercial domain traffic. Is there still traffic that is not being sold? It cannot be said that there are none at all, but it is very little. Even if there is, it is traffic with lower sales value.

02

What is the public domain and what is the private domain?

In short: for private domain traffic, people are channels, people are relationships, and people are traffic; for public domain traffic, stores are channels, stores are business districts, and stores are traffic.

——This is the first method of definition.

People are channels and stores are traffic, which is obviously a concept from the perspective of retailers. Therefore, the main body of the private domain is the retailer.

Can brands and agents operate in private domains? sure. For example, direct sales directly target micro-businesses on the C-end. Obviously, if brands cannot expand their private domain business, there is no point in discussing it.

From the perspective of brand owners, a bunch of suppliers are dividing up the retailer's traffic, which of course is considered public domain traffic. In other words, the private domain from the perspective of retailers is actually the public domain in the eyes of brands.

Therefore, the public domain and the private domain actually have different subjects and perspectives - this is the second way of defining them.

03

The private domain of retailers is the bargaining chip between retailers and the supply chain (brand owners, agents). What are the chips used for?

Waiting for the right price, exchanging money, exchanging resources. It will be given to whoever bids the highest, and you can even bid. This is how data charges are getting higher and higher.

• The first method: directly charge traffic fees, such as e-commerce platforms;
• The second method: charging resource fees, such as display fees and exhibition fees in supermarkets;
• The third method: Although it is free, it is time-consuming. For example, deep distribution has customer relationships because the stores have private traffic.

Customer relations mean exchanging relationships for traffic and time for resources. Or exchange traffic at a lower cost. I have always emphasized that in deep distribution, the human chain is the channel. Exchange customer favors for smooth channels.

04

The public domain traffic purchased with money and resources is actually commercial domain traffic.

The first to transform the public domain into the commercial domain was KA. The Western KA made money by charging front desk fees (gross profit by adding price). After entering China, it became backend profit, which is actually traffic fee.

Stacking is traffic, display is traffic, promotion is traffic, and anything that can bring traffic will be charged. There are dozens of categories of expenses, too numerous to count.

Carrefour was the first Western giant to compromise with this Chinese model, while Walmart woke up later. Therefore, Walmart, one of the world's top 500 companies, has lagged behind Carrefour in China for a long time.

If you don’t run a supermarket, you’re waiting for death; if you run a supermarket, you’re seeking death. The reason is that KA has changed from the public domain to the commercial domain. If you don’t do KA, there will be no sales; if you do KA, there will be no profit.

05

Alibaba’s earliest public domain traffic is somewhat similar to “public welfare traffic”, and free traffic is “public welfare”. Taobao brands are the beneficiaries of "public welfare traffic" and have truly achieved "making it easy to do business in the world."

However, Alibaba’s platform traffic is closed. From the moment Alibaba closed off Baidu’s search traffic, Alibaba will definitely shift its public domain traffic to commercial domain traffic.

It is said, and I have not verified it in the United States, that American e-commerce platforms do not block external traffic. Because most of the top 10 e-commerce companies in the United States have offline stores, for example, Walmart is also one of the top 10 e-commerce companies in the United States.

As long as the platform traffic is closed, it will sooner or later change from the public domain to the commercial domain, and it cannot be stopped. Even if Jack Ma does not charge traffic fees, there will be businesses that pay "resource fees" to the "shop assistants", which is also a disguised form of traffic fees.

In a closed traffic system, traffic fees will definitely rise until no one makes any money. Because as long as there is profit to be made, there will always be businesses willing to raise the price of traffic.

Therefore, "Not doing XX is waiting for death, doing XX is seeking death", and this time XX is the e-commerce platform. Alibaba’s acquisition of RT-Mart is a major integration of commercial traffic. Alibaba learned KA’s online tricks, and KA learned the platform’s offline tricks.

The choice between "waiting to die" and "seeking death" is precisely the dilemma that commercial domain traffic creates for brands and agents.

06

The traffic of KA and e-commerce are all commercial domain traffic, so the traffic of street-side mom-and-pop stores should be public domain traffic. It used to be, but now it isn’t.

The deep distribution of customer relations refers to small street shops. By exchanging customer relationships for traffic, what you get is actually public domain traffic. Therefore, the essence of customer relations is "relationships in exchange for real money traffic."

Soon, those industry giants felt that customer relations were too troublesome, so they simply paid for the small stores' displays and layout, and used the policy of stockpiling goods to occupy inventory. As a result, some brands can stock up on goods before the Spring Festival and sell them for a whole year.

Originally, KA going to the countryside squeezed the living space of small street shops. Now even small shops have become commercial traffic. I am afraid that only village-level shops have not yet become commercial traffic.

07

There is no public domain traffic in the world anymore, and all valuable resources on the terminal are sold at a marked price. We have to maintain customer relations, but we also have to spend money to gain traffic.

"Make money from suppliers, not consumers." The business rules created by Walmart have now expanded to all retail business systems in China. This is the reality of business in China. You can't deny it, but complaining is useless.

However, there must be a way to crack it.

08

Business is a game, and finally a balance is reached.

Public domain traffic becomes commercial domain traffic because there is a retailer (terminal) between the brand and the consumer. Even on e-commerce platforms, merchants think they can reach the C-end, but in fact there is still a platform in between.

Without traffic fees, it is technically impossible to reach the C-end. Isn’t it for this reason that the platform requires merchants to choose “one of two”? From this perspective, the so-called disintermediation of e-commerce platforms is actually a more domineering "middleman".

Where do the chips in business games come from? Retailers (including platforms, KA and small stores) control the C-end, and brand owners are actually also influencing the C-end. The chips in the commercial game come from the C-end. User-orientation and consumer-orientation are by no means noble business values, but rather the necessity of business games.

Brand, IP, etc. are the factors that brand owners use to influence the C-end, and are also the bargaining chips in the game with terminals and platforms. In this regard, big brands have an advantage.

09

The public domain becomes the commercial domain, and all traffic is priced. So, should brands go for private domain traffic?

I will explain in another article that brands should not engage in private domain traffic because they will not be able to expand it. In the private domain, people are channels and people are traffic. This is the retailers' right. So, besides influencing the C-end through brand and IP, are there other ways for brand owners to gain bargaining chips?

Of course there is, digital marketing is it. Marketing digitalization is not another form of e-commerce, but the digitalization of traditional channels, namely BC integration.

BC integration means that the channel still has to pass through the B-end (terminal), but the touchpoint has reached the C-end. At least it has reached the C-end technically. Once, at an industry conference, I spoke about digital marketing, and a chain terminal was panicked: Does digital marketing mean that brands have to bypass the terminals and reach users directly?

Some individual brands may do so, but companies that really want to become big will not. BC integration allows brands to reach the C-end, thus gaining the bargaining chips to balance the commercial domain traffic; BC integration is not a simple 2C. There are 2B, 2C, and BC connections. Only through BC connection can the B side be empowered.

The retail end uses the C-end to control brands, but the retail end also has confusion: private domain traffic is limited and it is difficult to increase growth. Since private domain traffic is limited, we try every means to transfer the difficulties to suppliers, such as increasing traffic fees.

If brands can empower the retail end, such as bringing incremental sales to the terminal, then the brands will be welcomed by retailers.

10

In business competition, it is never the case that one side dominates absolutely and overwhelms the other. The balance of terror and mutual fear is the best game. Internet technology allows all business parties to have the opportunity to reach C-end users.

The ability to reach the C-end determines the business’s voice. The terminal monopolizes users and the platform monopolizes traffic, which will change with the digitalization of marketing.

11

Finally, let me share my conclusion.

There is no public domain traffic in the world anymore. All traffic is sold at a marked price. The traffic that can be bought with money is commercial domain traffic. Ambitious brands will not go for private domain traffic. In the private domain, people are channels and people are traffic - this is the unique traffic logic of small Chinese stores.

From a technical perspective, all commercial organizations can reach the C-end through digital marketing. With such an opportunity in front of us, any business organization that does not take advantage of it will be in big trouble.

The competition affecting the C-end will become more intense. With the chips that influence C-end acquisition, public, commercial, and private domain traffic are no longer a problem.

Author: Liu Chunxiong

Source: Liu's New Marketing (ID: liuchunxiong1964)