This article is from: Inside the Surface, Author: Zhou Xiao, Wang Huimin, Editor: Fu Xiaoling
At Q3, public opinion about the bursting of the bubble of Station B was very loud. But only three months later, the market attitude took a 180-degree turn, and many people planned to enter the B station.
The reason for the market logic reversal is the information repeatedly mentioned in the 2021Q3-Q4 conference call of Station B - the short video Story Mode mode.
So, why does it make the market so "excited"? Just look at how it advertises.
In the past, station B sold advertisements simply and rudely, either the content directly with the "advertisement" logo, or the up owner integrated the advertisement into the video, "hard wide soft push".
This kind of advertising, basically there will not be too many people to take the initiative to click on the opening to watch. With a limited conversion rate, the commercial story is difficult to tell, which also affects market confidence.
But now, after clicking into the Story Mode page, users can swipe down to swipe content like they swipe fast. Ads can be naturally inserted into the video stream and fed to the user.
And what impact will this immersive advertising presentation have?
As shown below, in 2021, Douyin sold advertising for 114.1 billion, and Kuaishou 2021Q4 advertising revenue reached a new high, reaching 13.2 billion. As of 2021H1, the advertisements presented in the short video mode have accounted for 42.6% of the entire Internet.
In the eyes of investors, the commercialization of Station B seems to have taken off "on the eve":
"On the basis of the continuous improvement of advertising efficiency, the company's advertising revenue is expected to maintain medium-high growth in the medium term."
But is that really the case? After reviewing YouTube, Snapchat, and Instagram (hereinafter referred to as "Ins"), which are also exploring the short video model, we found that things are not so simple.
First, the traffic and realization are "misplaced", and the income growth rate is short-term and medium-term pain
In fact, cutting into the short video Story Mode model, in addition to the ad conversion rate increase mentioned above, also has a positive effect on user time.
Of course, this is not a unique effect of Station B, but a platform that has launched a short video model, such as YouTube, Snapchat, Ins, etc., all of which have such a situation.
User time and conversion rate have both increased, so the expectation that advertising revenue growth will "immediately" has indeed basic support.
But at the level of reality, the facts seem to be skewed.
As shown in the figure below, in the early introduction of short video advertising models through the Reels function, from 2021Q2, the growth rate of advertising revenue continued to decline, and 2022Q1 gave a historical low advertising revenue guidance - expected to increase by 3% to 11% year-on-year.
Note: Ins is owned by Facebook and its advertising revenue is not split.
So why are revenue delivery and expectations the opposite?
The explanation given by Ins (2021Q4 Conference Call) is that as users turn to short video applications such as Reels, user time competition intensifies, adversely affecting the increase in exposure.
According to this index, we measured the ins advertising revenue by disassembling and found that the full picture of the truth is:
On the one hand, the short video project squeezes the time of the main site user in the short term - it is like understanding, you enter the Story Mode content on the B site, brush the short video, it is impossible to brush the medium and long video at the same time, resulting in a decline in the overall advertising exposure;
On the other hand, before the short video itself is cultivated, in order to prevent "premature death", it will not prematurely increase the advertising loading rate.
As a result, traffic and ad monetization are misaligned, dragging down overall advertising revenue.
However, as far as the calculation model is concerned, the decline in revenue growth is only a short- and medium-term pain, and in the long-term dimension, short video projects will "accumulate thick and thin" to significantly increase advertising revenue.
Note: When Reels went online for two months, the traffic effect of short video competition will be relatively weak, coupled with the better conversion rate of the new model, the price will increase slightly, and the overall advertising revenue will only decline slightly.
A year after its launch, the user diversion effect was highlighted, and although the price of the advertisement increased, the loading rate was very low, resulting in a significant decline in advertising revenue.
However, three years after the launch, the platform content ecology is basically balanced, and at this time, the advertising price and loading rate have both increased significantly, and the overall advertising revenue growth rate is obvious.
In terms of the time of launching short videos, all platforms are currently in the painful stage of revenue growth.
In fact, the data reflects that this is also true. As shown in the following figure, after cutting into the short video business, overseas platforms have successively experienced a decline in the growth rate of advertising revenue.
Paradoxically, however, during the 2021Q2 industry boom season, YouTube, Snapchat, and the industry's high resilience were consistent, while Ins performed mediocrely.
Remarks: Of course, the decline in advertising revenue growth will be affected by the industry cycle and the structure of advertisers on various platforms.
The reason for this is that the introduction of short video projects has different meanings for each platform.
Ins itself has a well-established community atmosphere – it is both a "carnival of close friends" and a "gathering place for merchants". Its addition of short videos is to solve the imminent problem of monetization rate increase.
In this case, short videos are equivalent to invasive species, and under natural conditions, they will continue to preempt the user time of other content. And its own advertising load rate and price have not risen, and the revenue "fault" is serious.
Unlike Ins's "all-rounder", other platforms have a partial phenomenon, and the introduction of short videos is complementary.
In the case of YouTube, its platform has the problem of aging users.
In the chart below, the main user groups of Tik Tok, Ins, and Snapchat are all under the age of 36, while the proportion of YouTube users over the age of 45 is even greater.
Based on this, it cuts into short videos, and the goal is to accelerate "youth".
For example, Chris Jaffe, vice president of product management at YouTube, has said: "We want the next generation of mobile creators to grow their community on YouTube through Shorts."
Snapchat is a partial student with too strong a private domain atmosphere - in the early days, it was equivalent to WeChat with only chat function, and the information was burned after reading.
This, though, gives it a high level of user activity, with "only one person" accounting for 88 percent of the total amount of information sent, according to data released in 2013.
But the disadvantages are also obvious - the commercialization efficiency is limited, after all, compared to the big V, friends and family are unlikely to take the advertisement and recommend it to you.
Therefore, Snapchat's appeal to launch Spotlight is to gradually open up the commons space.
That is to say, for these "partial" platforms, opening up short videos has the effect of making up for shortcomings. And as long as the speed of replenishment is fast enough, to a certain extent, it can offset the negative impact of short videos seizing the duration of the main site.
For example, according to Snapchat's 2021Q4 financial report, although the length of users watching story (circle of friends) declined, it was offset by the increase in the length of time spent watching discover and Spotlight (video number) content, and the overall length increased.
This is also the situation that Station B is currently facing.
Station B is a public domain partial student - you can pay attention to a lot of up masters in Station B, but if you want to open your personal favorites with videos of little brothers and sisters to friends and relatives, I am afraid that it is a "large social death scene".
This determines that Station B cannot be as radical as Snapchat, and can only "boil frogs in warm water" to allow users to slowly cultivate their habits.
It can be seen that although Story Mode focuses on short videos, it does not stipulate the length of time; at the same time, it also retains the platform's iconic "one-button three-link" and send bullet screen functions.
The purpose is to allow users to gradually adapt to the short video form in a sense of familiarity.
Remarks: Left medium and long video interface, right short video interface.
Under the influence of "subtle", according to the 2021Q4 conference call: Story Mode's penetration rate in DAU exceeded 20%, and the proportion of likes for its contribution reached 30%.
According to QM statistics, the user habits of Station B are getting closer and closer to short video platforms such as Jitter.
Therefore, based on the law of overseas application, for Station B, when the private domain shortcomings are made up, the negative effect of income may be weakened.
However, although the short-term impact of increasing short videos on different attribute platforms is different, the long-term results are the same - significantly increasing advertising revenue. And to achieve this, the spelling is content.
Second, aim for long-term value, but is FEED resistant?
Content platforms will face a situation where users are more loyal to content than platforms.
As shown in the figure below, every time Douyin and Kuaishou expand their content, they will drive a new round of growth in user time.
Looking back at Ins, which are being explored in short videos, new content has also quickly seized time. And when someone watches, there will be creators who smell "traffic" and automatically fill in the content.
However, this natural growth rate is too slow for these "growth" eager platforms, and they obviously can't wait.
For example, Snapchat shows "banknote capabilities" in order to quickly populate commons content.
According to its 2021Q4 Conference Call: Various Incentive Strategies, Snapchat paid out $2.5 billion in prize money and recruited about 12,000 creators.
Real money and silver were "sprinkled out" and the harvest was very rich.
According to the data, as of February 2022, the number of photos and videos uploaded on Spotlight every day exceeded 5 billion, three times that of 2021.
Attracted by the content, Snapchat's user time, as of February 2022, achieved its first growth since 2017, reaching 30 minutes.
At present, the expansion of short video content of Station B is also accelerating. For example, in order to encourage more creators to create content to tilt towards short videos, Station B adjusted the creator incentive mechanism.
In the words of UP master @ lao Jiang Ju reliable: "In 2022, station B or will usher in the imaging and story transformation of the whole site content." ”
But we disassembled and found that unlike Snapchat, which attracts creators by giving benefits, Station B is a bit "scolding".
For example, some old UP owners reported that under the new incentive plan, the income of their own submitted videos has decreased.
As you can see from the chart below, the reason for this is that creators used to get a "salary" based on the number of plays, but now KPIs have shifted to likes and coins.
Although this shift has a positive effect in urging medium- and long-term video bloggers to improve the quality of content, the more important purpose is to adapt to the high-interaction short video model, thus forcing UP owners to take the initiative to expand short video creation.
So, why did Station B go against the "broken circle" and sing blackface? In fact, Station B is also helpless.
As shown in the figure below, in the top 20 hundred up masters of station B in 2021, 1/4 does not have a Douyin account. Even if there is an opening, it is only a small number of bilateral synchronizations.
In the past, this was the barrier of Station B - most of the video content was longer than five minutes, which was not suitable for presentation in short video mode. The conversion cost is very large, making the creator's platform "loyalty" extremely high.
But now it has become a "roadblock" for the development of the Story Mode model, after all, the UP owner who does not want to be more vibrato will not suddenly be active in the short video of station B.
In this way, Station B can only hold high the stick and reversely motivate its own UP master to "move".
And those who turn to UP masters, such as [nameless evaluation], etc., the content playback volume of their short videos is indeed much higher than that of medium video content.
However, compared with the threat of internal UP owners, B station is much more generous in attracting external creators to join the short video section.
For example, in early 2020, the second phase of the "Fashion Star Plan" was launched to recruit UP owners to settle in the fashion zone with high cash and flow support; in 2022, it added the "Star Plan • New Year Edition" to invest tens of billions of traffic to support pan-lifestyle UP owners including food, emotions, and home. These categories have the characteristics of highly adaptable to short video creation.
Under the wild sprinkling of money, you can see that the number of UP masters in the living area of Station B will increase significantly in 2021.
With the expansion of the number of creators and content categories, the average monthly submission volume of Station B in 2021 has increased year-on-year; at the same time, the average daily time of users has risen significantly.
According to this deduction, if the platform short video content ecology is further cultivated, the user time continues to grow, the advertising feed increases and the efficiency is higher, the story of the platform commercialization will be revitalized.
For example, Ins, which is one step ahead of others, has shown signs of feed global transformation.
According to its 2021Q4 conference call: compared to the Watch format, Reels mode has more exposure opportunities.
However, this is only the ideal state of expectation, considering the cost investment of station B and the difficulty of changing the habits of platform users and creators, in the expansion of short video content, whether station B can rush out of the sky, needs to be tracked continuously.
brief summary
The commercialization of B stations, which has always been a "big problem", has changed in this quarter.
In the 2021Q3 and 2021Q4 conference calls, the short video Story Mode mode, which is repeatedly mentioned, has the "ability to absorb gold" behind the immersive advertising that can be compared to the trembling. This makes investors excited, thinking that the income of Station B is just around the corner.
But the truth is that adding short videos is not only the pain of short-term income decline that Station B itself may experience; it is also a kind of impact to be verified for creators who are accustomed to medium- and long-term video creation.
In either case, it is contrary to investors' short-term expectations.