Image source @ Visual China
Some time ago, the Ulike hair removal device was ordered to rectify because the elevator advertisement was suspected of rubbing the side ball, and people's discussion of the elevator advertisement sounded again.
All along, the sound of "spam ads haunting the elevator room" has not disappeared on the Internet. For most people, elevator advertising is a difficult to accept but can not escape the existence.
The earlier internet popular article "How are modern people driven crazy by elevator advertisements?" It is pointed out that the last straw that crushes the social dogs may not be work or poverty, but elevator garbage advertisements that are squeezed dry and squeezed by life, and then subjected to mental destruction and oppression.
But what you don't know is that this industry, which has been criticized by countless people, hides a "profiteering" business.
01, one company and one era
In 2002, if the maturity of digital media technology is driving the transformation of traditional media, the accelerated process of urbanization has achieved an unprecedented era of ladder media.
At that time, the 30-year-old Jiang Nanchun could not see the future in the advertising agency industry and began to devote himself to the embrace of new media. He stubbornly believed that new media must have a broad space for development, so he began to turn the business of the company Yongyi Communication to new media, and put the starting point of entrepreneurship in the elevator that was invisible to traditional media at that time.
Jiang Nanchun believes that when users do not have many choices, they are often the best choice for advertising. And when you're in an elevator, people don't have a choice, and that's the best time for advertising.
After finding the breakthrough of ladder media, at the end of the year, Jiang Nanchun began to lay a commercial building LCD screen advertising network.
But Jiangnanchun's transformation path is not very smooth. Laying commercial building LCD screen and real estate is similar, the early stage needs the company to continue to burn money "blood injection", and the ladder media is still unknown, is the profit or loss, no one can be sure, can only continue to smash funds. New Finance has reported that in the first half of 2003 alone, Jiang Nanchun spent 20 million yuan.
Even so, Jiang Nanchun still did not stop. By chance, SoftBank invested $40 million in Jiangnanchun. Since then, Jiang Nanchun has renamed the company "Yongyi Communication" to "Focus Media", accelerating the expansion of elevator advertising nationwide.
The new media effect was soon highlighted, and the elevator LCD TV was regarded as a new darling by the brand side due to its high coverage, strong pertinence and repeated stimulation, which also made Focus continue to rise.
In the following two years, Focus's commercial building simulcast network built using digital multimedia technology developed from Shanghai to 52 cities across the country; the network coverage developed from more than 50 to more than 20,000 buildings; the liquid crystal information terminal developed from more than 300 to more than 37,000; and the revenue also rose from more than 1 million yuan per month to 50 million yuan per month, and the market share was as high as 75%.
On this basis, Jiang Nanchun has also become the "advertising king".
In 2005, Jiang Nanchun led Focus to land on the NASDAQ market, becoming the first stock of advertising media in China. Subsequently, Focus rapidly acquired and expanded with an unsurpassable trend.
In October 2005, Focus acquired the framework for $183 million;
In January 2006, it acquired Juzhong for US$325 million;
In March 2006, the acquisition of Kaiwei Dian for 30 million US dollars was filed;
In March 2007, it acquired Haoye for US$225-300 million;
In December 2007, it acquired Focus's biggest competitor in store advertising, Xicheng, for US$168.4 million;
……
Chaoqi Network once reported that Focus Media acquired more than 60 companies in 2 years, becoming the leading digital media group in China at that time, accounting for 95% of the market share.
The effectiveness of focus acquisitions is particularly evident in the capital market. In 2007, Focus's market value rushed from the initial $2 billion to $3 billion to $8.6 billion, and its price-earnings ratio also rose to 40 times.
Success is also Xiao He, and defeat is also Xiao He. Focus, who presses the accelerator key, falls into the darkest hour the following year. In 2008, the 315 evening party exposed Focus Wireless's illegal group text messages, Focus had no choice but to shut down its main business "Focus Wireless", and since then, Focus has fallen into many problems such as a large number of merchants reducing advertising business and acquiring business less than expected.
Under multiple difficulties, Focus's market value also fell from its peak of $8.6 billion to about $600 million, and its stock price fell by as much as 85%. It had to be delisted in 2013 after privatization, when it was worth US$2.646 billion, or 16.5 billion yuan.
02, seize the wind outlet, take advantage of the rise
In just a few years, the ladder media industry has suffered great turmoil in acquisitions, and the giants have been listed and delisted, but the entrepreneurs' enthusiasm for the ladder media has not diminished.
In 2013, Zhang Jixue led Xinchao Media to transform from a traditional magazine to a ladder media field. At that time, Focus had firmly occupied office buildings and high-end buildings with high advertising prices, leaving few opportunities for the new wave.
But any gap in the market may mean opportunity, just as Focus captured the elevator ignored by the traditional media, and the new wave of entry has set its sights on communities and second- and third-tier cities that Focus has failed to notice.
Zhang Jixue once said that there are about 100 million people working in office buildings in China, but more than 700 million people live in the community, which means that community consumption is China's main consumer market. In addition, at that time, community consumption in the United States accounted for 70%, while Chinese community consumption was only 30%, and there is still strong room for growth in the future.
The trendy community strategy worked. In the end, Xinchao not only attracted brands who wanted to approach consumers in the community with the slogan of "products sold at home, advertising investment is trendy", won customers from giants, and also obtained the attention of multiple rounds of financing and big guys.
In 2014, Xinchao obtained 60 million yuan of angel round financing; in 2015, Xinchao acquired Sound Picture Media, becoming the company with the largest number of elevator TVs in Chengdu; in 2017, Xinchao received another 1 billion yuan of financing from OPPLE Lighting and Gujia Home; in 2018, Xinchao successively received 2 billion yuan of investment from Chengdu High-tech Zone Industrial Guidance Fund and 2.1 billion yuan of Baidu investment.
Of course, the success of the new wave is not accidental, but more the result of innovation.
At that time, the advertising screens on the market were mainly horizontal screens, even Focus was no exception. However, Xinchao found that the vertical strip space of the elevator door edge can just place a vertical strip advertising screen, for this reason, Xinchao specially found a factory to customize the vertical strip advertising screen and put it into use.
It turns out that the vertical screen works well. Some surveys have shown that the horizontal screen will make the audience's attention easily distracted, while the vertical video can better attract the user's attention because the field of view is more concentrated.
Relying on strategic and technological innovation, the new wave is rising rapidly. By 2018, Xinchao Media's revenue exceeded RMB1 billion, an increase of 4 times year-on-year; among advertisers, Xinchao Media received more than 16,000 customer choices, including 80% of China's top 100 brands.
And the new wave after the rise also has the courage to launch an attack on the hundreds of billions of bosses.
03, the latter broke through, focus was "divided"
In April 2018, a "Notice on Comprehensively Grabbing Focus Billions of Users" circulated online. In the notice, Xinchao established three policies of gifts, preferential cooperation and commissions to encourage employees to grab Focus's billion-dollar customers.
Image source: Network
Previously, CEI TMT reported that in order to grab the head customer, Xinchao directly discounted the price of the customer's cooperation with Focus, and the effect was no different from Focus. At the same time, if the client's advertising decision-maker and the new wave partner meet, they can also receive 10 million yuan of advertising resources. At the same time, The New Wave is also digging up focused sales on the condition of high options and high stocks.
For the trendy robbery of customers, Jiang Nanchun responded in the circle of friends: "No company is successful by salivating and touching porcelain, and how big you can always depend on how big you can help customers." Focus on their own goals and missions, and achieve the goal of covering 500 million new middle-class people in 500 cities and 5 million terminals as soon as possible. And Zhang Jixue is not willing to show weakness, responding to the focus of the chinese media to slander the new wave, and the internal group has "new actions".
The verbal battle between Focus and the trendy boss is only a corner, and the war in the ladder media industry has just begun.
In the quarter of Q2 2018 alone, Focus's self-operated points expanded from 1.6 million at the end of March to 2.17 million at the end of July, an increase of 36%. By the end of 2018, the point gap between the new wave and Focus has narrowed from 4.4 times to 2.9 times.
In addition, under the situation of the new wave of fierce pursuit, Focus has also begun to discount and reduce prices. Cei TMT reported that at that time, the focus frame poster discount could be given up to 30% off, with a digital poster resource set of 1,000 points in Beijing, giving away 5% of the 1.0 frame. When it was learned that the price of the new trend was lower, Focus said that after counting the gift, the comprehensive discount could be up to 2.8%.
As with the price wars in most industries, whoever consumes energy to the end is the winner.
After Ali's 14 billion investment focus, Baidu and JD.com invested 2.1 billion yuan and 1 billion yuan respectively. This means that this price war has long been not just a war between focus and trend, but a contest between Ali and big guys such as JD.com and Baidu.
In 2019, Focus Media's revenue was 12.136 billion yuan, down 16.60% year-on-year, in addition, Focus Media's gross profit margin was 45.21%, down 21% year-on-year, far lower than the peak of 72%.
It is true that the price war has led to a decline in Focus's business level, but this does not mean that Focus Media, as the industry leader, no longer has an advantage.
04. Who is in charge of ups and downs?
Even if it suffers from a decline in performance, Focus can quickly return to blood.
Although Focus's performance declined in Q1 2020 under the price war and the 2020 epidemic, by March 2020, Focus building advertising had recovered to 85% of the same period last year, and April revenue returned to the same level as last year, which was much faster than other companies in its peers.
This lies in the adjustment of Focus's business. Previously, Focus relied more on the Internet business, but after the adjustment in 2019, customers in the consumer goods industry with weak cycle advantages became major customers, accounting for 35.45% of the revenue ratio in 2020, as the largest source of income. In addition, the rise of new consumption has also brought a considerable income to Focus.
However, the recovery of performance does not mean that Focus is firmly sitting on the first throne.
In just a few years, New Wave Media has caught up, not only rapidly narrowing the gap with industry bosses, with a valuation of more than 20 billion yuan, but also behind it there is no lack of big guy support.
In the "2021 China New Economy Unicorn and Quasi-Unicorn Top200 List" released by Ai Media Consulting, New Wave Media and Companies such as ByteDance, JD Technology, and Ant Financial ranked 58th.
It is worth noting that after Xinchao obtained 1 billion yuan of financing from JD.com in 2019, in September last year, JD.com once again led a financing of US$400 million, and became the largest shareholder of Xinchao Media.
Backed by JD.com, The New Wave is still an inevitable rival to Focus. Especially when the online traffic dividend peaks and countless brands impact the offline, ladder media is regarded as the key battlefield of the brand war.
The Second Hand "Community Ladder Media Advertising Marketing Value Report" pointed out that elevator media is the type of outdoor traffic that advertisers plan to increase their investment in Top1 in 2021, and community ladder media is the outdoor media with the highest reach rate in the community, with a weekly reach ratio of 92%.
But this area, which is regarded as the main battlefield of the brand's future, is obviously different from the original.
In today's increasingly digital development, advertising personalization and precision have become a trend, even offline traffic is inevitable. For the future development of offline media, some insiders pointed out that "in the next 5-8 years, the Internet will change the business logic of online advertising users to reach users, and will repeat it in offline media." ”
In fact, as early as 2018, Focus opened the way to digital transformation. By the beginning of 2019, Focus launched the Internet of Things intelligent advertising KUMA system, the main automated picking and delivery system.
The new wave, which is also not to be outdone, is also accelerating the digital layout. Last year's Spring Festival, Xinchao and Gujia Home Furnishing launched the "GuJia Nian • Enjoy Family Fun" special Spring Festival interaction. That is, in which city the video maker's home is, the video is cast on the elevator screen in the corresponding city.
When offline traffic accelerates, this means that the competition between ladder media in the future is bound to become a digital contest.
According to the China Business Intelligence Network, from 2017 to 2019, the turnover of the mainland advertising industry increased from 689.64 billion yuan to 867.4 billion yuan, with an average growth rate of 9.20%, and the mainland's advertising business accounted for 0.88% of GDP, compared with the United States, Japan and other developed countries are still at a low level, and the development space is huge.
Who will be the master of the ups and downs in the future, everything is still unknown.