Starting from the new version update of WeChat, will there be a battle between Toutiao and WeChat?

Today, WeChat officially updated to version 6.5.4. Although the "face-to-face red envelopes" launched for the Spring Festival occupied the vast majority of media coverage, a small update to WeChat search may be more worthy of our attention.

A small step for WeChat search may be a big step for information flow

In this updated version, WeChat search has refined the content. We will be able to search for different categories of content, instead of mixing various search results together like before. In previous versions, we have been able to search for content outside the site through WeChat. It is foreseeable that the frequency of use of WeChat search with more refined content will become higher. WeChat search is no longer a search tool in the closed WeChat ecosystem, but has become a real search engine.

Pan Luan, a partner of the youth community "Zuiyou", said, "WeChat search is an independent project. Zhang Xiaolong has always wanted to separate WeChat search and Moments hot articles. WeChat search has begun to support off-site content, which may have nothing to do with Sogou."

This inference is reasonable to a certain extent. Sogou has achieved good results in the past year. Sogou is even the only search engine that can retrieve the content of WeChat public accounts, but Sogou's market share has not skyrocketed. The deep logic behind this is that WeChat did not hand over the search box to Sogou. On the one hand, it did not hand over the entrance to Sogou, an important partner, and on the other hand, WeChat continued to add more value to the search box. From this we can basically draw a conclusion that in Zhang Xiaolong's vision, "search" will most likely be a very important part of the WeChat ecosystem.

As many media have analyzed countless times before, information distribution on mobile terminals is actually composed of two parts: "search + recommendation". The functions of the current WeChat search box are already sufficient, and the next step for WeChat is likely to be to launch a personalized information flow similar to Toutiao.

In fact, we may also find some answers on QQ Mobile. There is an entrance to "QQ Views" on QQ Mobile. The content here is divided into "Views" and "Subscription Accounts". The latter is no different from the WeChat public accounts we are familiar with, while the former is the recommended channel of Toutiao, and the traffic is quite considerable. The increasingly mature content distribution system on QQ Mobile may be a reference for WeChat information flow products.

The inevitable choice for information flow products, advertising revenue has become an important source of revenue growth for Tencent

Two years ago, in the article " Is Tencent's future only based on games? ", I made a judgment that Tencent's future would not be O2O and e-commerce, but would definitely be a two-legged walk of games + advertising. Two years have passed, and Tencent's O2O and e-commerce businesses have been divested and handed over to partners, while advertising is becoming more and more important in Tencent's revenue.

Tencent's user base is about two-thirds of Facebook's. There is huge room for growth in the online advertising market. Even if it can only reach half of Facebook's level, it will still be close to $600 million. Tencent's revenue may even double someday by increasing online advertising.

In fact, I believe many people have noticed that Tencent's advertising revenue has continued to grow, and can even be called a leap forward, from 12.16% in the first quarter of 2015 to 18.44% in the third quarter of 2016. This is largely due to the fact that WeChat has begun to test the waters for commercialization beyond mobile games, which mainly consists of Moments ads and public account ads.

The latest financial report data shows that Tencent's performance advertising revenue in the third quarter was 4.368 billion yuan, a year-on-year increase of 83%, and the performance advertising revenue in the second quarter was 3.697 billion yuan, a year-on-year increase of 80%. Tencent's performance advertising revenue is still increasing year-on-year, but the month-on-month growth rate has dropped from 46% in Q2 to 20% in Q3. The growth rate of performance advertising revenue in WeChat Moments and WeChat public accounts is actually slowing down to some extent.

Another embarrassing number for Tencent may be the comparison of the ARPU values ​​of WeChat and Facebook users. Data shows that Facebook's ARPU in North America exceeds $14. In comparison, foreign media estimates that WeChat's ARPU is only $7, which includes not only the contribution of advertising, but also games, O2O, finance, e-commerce and many other imagination spaces.

Behind the slowdown in the growth of WeChat’s effectiveness is actually the fact that many of the big WeChat public accounts are making a lot of money, just like the big accounts on Weibo made money in the early days, but the platform lost money. Although the WeChat public account ecosystem continues to prosper, Tencent has a feeling of being unable to express its suffering. This is also the reason why WeChat has launched a major campaign to rectify the “brushing” of public accounts in the second half of the year. But half a year has passed, and it can be said that there has been little effect. In contrast, Toutiao’s advertising revenue growth rate has maintained a triple-digit growth, and this year it has even shouted out a slogan of 6 billion yuan. The key lies in the fact that Toutiao’s control over content distribution is far higher than that of public accounts. (You can try to post an advertisement on Toutiao, and to a large extent you will not get any recommendation from the platform)

The frequency of opening WeChat public accounts is decreasing. As various companies collectively focus on new media platforms, users have more and more channels to obtain information. Moments is a private social place. Once there are too many advertisements, it will inevitably affect the user experience of the entire platform. This makes it impossible for Moments to provide a large number of advertising spaces like Weibo's information flow. It can be said that WeChat is beginning to approach the upper limit of performance advertising. WeChat may have noticed this aspect, which is why we saw WeChat test the "Moments Hot Articles" last year, in the hope of increasing the display of performance advertising to some extent.

So from this perspective, it is urgent for WeChat to launch an information flow similar to Toutiao. Providing personalized recommendations based on user interest tags will not only increase the imagination of performance advertising, but also reshuffle the existing WeChat public account ecosystem. Once launched, the main way for WeChat users to obtain information will likely change from WeChat public accounts and Moments to personalized information flows, such as QQ Kandian on mobile QQ. And the final winner, WeChat, will regain the power of advertising distribution.

There will be a battle between Toutiao and WeChat. It all comes down to a battle for user usage time.

"WeChat is decentralized", we have seen similar views on various occasions. In the eyes of many people, WeChat now has a huge content ecosystem such as WeChat official accounts, and Moments also help us filter information. From this perspective, both WeChat official accounts and Moments have played the role of information flow, but this may not be enough for WeChat.

In the second half of last year, Wang Xing, CEO of Meituan.com, proposed the concept of "the Internet entering the second half". This view caused a lot of controversy. Everyone believes that the Internet is driven by continuous innovation and there is no eternal enterprise. Alibaba and Tencent have not been subverted by the newly emerging small giants in the mobile Internet era, but have become stronger and stronger. Therefore, there is no concept of the second half at all.

But Wang Xing has a point that makes a lot of sense. In his view, in the era of mobile Internet, the user growth dividend is gradually disappearing, and now it is time to compete for the user's usage time. Coincidentally, Zhang Yiming, CEO of Toutiao, has also emphasized a similar point of view on different occasions. Toutiao is very fond of promoting a concept: Toutiao's monthly usage time is second only to WeChat.

The success of Toutiao is largely due to its success in capturing the growth of the Internet population in third- and fourth-tier cities. Through extensive pre-installation, Toutiao has established a strong moat of user base. Coupled with the personalized content that tends to be entertaining and vulgar, and the inherent traffic black hole effect, Toutiao's daily active users and usage time continue to set new highs.

As mentioned above, WeChat official accounts and Moments play the role of information flow, but the information you get from WeChat basically comes from your social relationships, which undoubtedly has a big bottleneck compared to the personalized recommendations of Toutiao. For many WeChat users in third- and fourth-tier cities, they do not have the complex social relationship chains of users in first-tier cities, and the frequency of interaction between users is not high, which means that the amount of information they can get from WeChat is actually very limited, and it is likely to be gone after just a few minutes of browsing.

However, WeChat has not met the information needs of these users. Toutiao has risen based on this trend, and their recommendations meet the needs of this group of users for more information. Take my mother, a typical user, for example. She has almost no knowledge of mobile Internet. She uses WeChat for about 20 minutes a day, and only uses WeChat when she needs to contact others. She has less than 50 WeChat friends and no more than 10 public accounts subscribed, so the information she obtains is extremely limited. But she spends more than an hour a day reading news on Toutiao.

Therefore, from the perspective of information acquisition efficiency, WeChat users will shift to Toutiao. Although Toutiao, as an information distribution tool, will never replace WeChat as a social software, it will squeeze the usage time of WeChat.

When user growth reaches a bottleneck, the longer the user usage time, the more imagination will be added to the product. This is also the logic why tools such as Moji Weather have a huge user base but no room for imagination. Therefore, there will inevitably be a battle between WeChat and Toutiao for user usage time.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.