Image source @ Visual China
Wen | market capitalization list, the author | Zhuzhang, the editor | Jiaxin
20 years ago, before the advent of the Internet, the best marketing platform was TELEVISION stations, radio, newspapers, the traditional media monopolized the golden resources of the era, a TV station advertising, may achieve a brand.
10 years ago, the Internet is in the ascendant, a company wants to do marketing, the best way may be SEO, SEM and other search marketing means, Baidu and other search platforms to solve the problem of information asymmetry, so that brands, products can be seen at any time, anywhere.
5 years ago, the mobile Internet wave surged, the best way for enterprise marketing may be to go to the e-commerce platform to advertise, e-commerce reshaped the relationship between people and goods, it is closer to the transaction, but also more direct.
Up to now, more companies may be more willing to spend money on short video platforms such as Douyin and Kuaishou.
Looking back at China's advertising market, each wave of era dividends has brought about changes in marketing methods and systems, and has also achieved giant advertising enterprises.
New traffic entrances, new media forms, and new content-carrying platforms have been bringing new variables, and in the continuous confrontation between new and old players, they have brought about the reshaping of the market pattern and promoted the overall process of the industry.
01 Evolution: How did BAT grow into an advertising giant?
In the early days of China's Internet development, Baidu's commercialization relied heavily on advertising, followed by Ali and Tencent.
However, in the transition from the PC Internet to the mobile Internet, in the face of the dividends of the three different stages of search, e-commerce and social networking, their advertising business has shown different directions.
The first stage is that Baidu has eaten the biggest dividend of the Internet advertising market with search.
For example, as early as 2005, the revenue brought by online marketing to Baidu accounted for 96.30%.
This year, Taobao just began to learn from the search engine model to launch the "keyword bidding" service, which is the prototype of the P4P through train, and in 2007, it launched the golden booth service, which is the prototype of the CPM for display advertising. Baidu's game-based Internet value-added services contributed 55.15% of its revenue, while its advertising business accounted for only 7.91%.
At this stage, brand graphic advertising accounted for the highest proportion of the online advertising market, at 65.2%, but the growth rate of search engine marketing was faster.
By 2007, Baidu surpassed Sina for the first time, with a market share of 16.5%, for the first time to become the first in the Internet advertising industry, Sina, Sohu ranked second and third, and then from 2007 to 2016, in terms of revenue, it is China's largest advertising company. Search advertising completes a round of impact on traditional portal advertising.
The second stage is that Ali has gradually explored the advertising model of e-commerce, and advertising has become its most important piece of revenue.
In 2008, Taobao launched a through train, through the user tag targeted display promotion, officially opened the C-end advertising platform road, its advertising form is mainly divided into display advertising (CPM), search advertising (CPC), alliance advertising (CPS), respectively, according to the display, click, sales of advertising costs, corresponding to the wisdom of the diamond, P4P through the car, Taobao three marketing products.
At that time, advertisers put more based on the user's Internet browsing content to determine user scenarios, mainly for input, search and browsing these three scenarios, and there is a point that advertising is still based on the PC side.
With the rapid development of e-commerce, especially the rise of B2C e-commerce formats, a huge group of merchants has emerged marketing demands within the platform ecology, and e-commerce advertising has become a new market increment. After the emergence of "Double Eleven" in 2009, e-commerce ushered in a golden age.
During this period, advertising began to be subdivided into different forms, such as display advertising, search advertising, alliance advertising, etc.
The third stage is that the arrival of the mobile Internet has triggered new industry changes, and at this stage, BAT is not far behind, and the industry has an oligopolistic effect.
Web search is no longer the best traffic entrance, more smartphones as the carrier of the App including video platforms, social platforms, live broadcast platforms, etc. have become a new traffic carrier, and the advertising competition between BAT is also a traffic entrance dispute.
In 2013, the giants frequently acquired mergers and acquisitions to create a broader business ecosystem, Alibaba invested in Weibo, Baidu acquired iQiyi, Tencent injected capital into Sogou... They all want to get more mobile entrances and master more traffic.
After the increase in marketing touchpoints, the demands of advertisers have become more and more refined. At this time, opening up various apps and achieving accurate matching between traffic pools and advertisers has become the focus of contention for giants.
As BAT continues to broaden its commercial boundaries, they have a more abundant traffic inlet and become a de facto oligarchy in the industry, with a total market share of more than 60% in 2016.
As a result, China's Internet advertising market has gone through the evolution path from search advertising to e-commerce advertising to social advertising.
In this process, on the technical side, DSP (demand-side platform), SSP (supply-side platform), RTB (real-time bidding), non-RTB and other technologies, targeted technologies to achieve breakthroughs and accelerate development, coupled with the continuous expansion of traffic scenarios, the process of programmatic advertising continues to accelerate, digital marketing gradually into the deep water area.
Next, the industry has entered a new dividend stage.
02 Change: Jitter is accelerating, infrastructure is king
Another trend to watch in 2016 is that in-feed advertising has become the most talked about form of advertising.
iResearch statistics show that in 2016, the share of information flow advertising in China's online advertising market exceeded 10% for the first time, and it is still penetrating at a high speed.
Information flow advertising was first launched by foreign Facebook (now Meta) in 2006, and some domestic Internet companies began to test the waters in 2012.
With the user penetration rate of 4G networks exceeding half in 2016, coupled with the growth ceiling of the monetization ability of the head traffic/high-quality traffic of major media in this year, which is mainly display advertising, information flow advertising ushered in an outbreak.
However, soon, the display form of information flow advertising quickly completed the transformation process from graphic information flow to video information flow.
The change lies in the rise and rapid growth of short video platforms such as Douyin and Kuaishou. Based on the content distribution model of personalized push, they quickly become the largest traffic entrance, and users stay on the app for longer and longer.
After mastering enough abundant and high-quality content traffic, their commercialization path is divided into two: advertising and e-commerce.
Compared with the traditional product display method based on graphic information, their advantage is that the video and live broadcast product introduction has narrowed the distance between consumers and merchants, and it is easier for consumers to accept and immerse themselves in it.
In this process, consumers can interact and communicate in real time, and it is easy to complete the self-discovery of needs, that is, their potential purchase needs, but after the introduction of the anchor, direct purchase intentions are generated.
In other words, the strong grass planting effect brought about by short videos and live broadcast scenarios is the advantage lacking in the previous graphic and text forms. At this time, Internet marketing has actually entered a new stage of content marketing.
At this stage, the advertiser's requirements in marketing are getting higher and higher and more refined: the accuracy of advertising should be high, the reach rate and conversion rate should be high, and the appeal of brand owners has become the integration of product efficiency and the integration of product efficiency and sales.
In this change, the problem came to the platform. They need to help advertisers find more targeted customers to deliver, improve delivery performance, and reduce delivery costs.
In the meantime, we found that the platform side mainly solved two problems:
The first is to achieve "smart matching" through personalized recommendations, which is the core of the information flow advertising operation model.
Different industries, different regions, different volumes of advertisers will produce massive marketing data, they face the same user group is not the same, in the face of diversified data, the platform mostly built a DMP (data management platform).
In the process of helping advertisers match, dock, analyze and optimize their needs and resources, DMP has become an infrastructure, because it can help advertisers precipitate, measure, optimize data in marketing, evaluate marketing effects, and make real-time adjustments based on data feedback.
With the further prominence of data value, more and more advertisers and enterprises have begun to build their own CDP (consumer data platform), CEM (user experience management platform), etc.; the Internet platform is also in addition to DMP, continue to build its own marketing data platform, to help advertisers precipitate data assets in marketing, optimize decision-making.
For example, Giant Cloud Map is a data platform that serves the marketing insights and scientific measurements of brand merchants in the giant engine ecosystem, for example, Alimama has a data bank, Tencent Advertising has Tencent Zhishu, and Baidu Marketing has a stargazing disk.
The second is to build a complete marketing ecology.
Taking the Douyin system as an example, the huge engine is a commercial marketing platform, around this platform, advertisers can choose the AD platform for drainage advertising, or they can choose the right talent for content advertising cooperation through the marketing tool of the giant star map.
In addition, if advertisers open a Douyin store, there will be a marketing demand for the store, and they can meet this demand through the huge amount of Qianchuan, an e-commerce advertising platform.
Huge Engine also launched a global developer platform pangolin, providing developers with full-life cycle services and growth solutions such as user growth, traffic monetization, and LTV enhancement.
At the bottom of this marketing ecology is the brand asset management platform of Giant Cloud Atlas, which precipitates data assets.
03 Offense and Defense: How to Meet 20% of Personalized Demands?
In the past, the data middle platform built by the platform parties actually extended from the bottom layer of data layer by layer.
Above the data is the basic capability, above is the advertiser's asset precipitation, and then above, is the data insight, marketing decisions and other scenario applications.
Specifically, advertisers can diagnose the current situation of the brand, find the target group, find the most suitable talent, etc. through the standardized basic capabilities provided by the platform, so as to maximize efficiency in every link.
However, advertisers in all walks of life will inevitably encounter the situation that general capabilities are difficult to meet the demands in the actual marketing actions, and the platform needs to provide them with more customized and in-depth data and technical capabilities. Service providers on the platform also need to use the platform data and technical capabilities to create their own differentiated advantages in order to further enhance the depth of service.
In other words, the data management platform is an infrastructure battle, on top of which the platform needs to provide advertisers with differentiated marketing and operation services.
We have observed that Huge Cloud Atlas has launched a data factory, launched modules such as label factory and modeling and prediction, and provided Brands and service providers with PaaS-like custom data analysis and application capabilities.
How does this data factory meet the individual demands of advertisers?
For example, some of the more advanced users can borrow label factories to customize the production labels, build a label system exclusive to the category/brand, and classify the relevant content, crowds, and talents into this label system.
Advertisers can also use brand history data as the basis to build a customized data model for crowd selection, and at the same time create their own exclusive huge cloud map through personalized data analysis and other capabilities.
On top of this system, brands can achieve more refined operations in user relationship assets and brand content assets.
This is a process of continuously amplifying the value of data, and Data Factory has only done one of the most important things, that is, to help brands upgrade the standard version of the huge cloud map to an exclusive customized version of the huge cloud map, to achieve further marketing efficiency and business growth.
We see that in addition to the giant cloud map, other players are also evolving.
For example, Alibaba's data bank also supports customers to customize crowd labels, and Tencent Zhishu has also launched a label square, which can personalize and recommend exclusive labels and industry labels based on customer conditions; for example, JD.com's Jingdong Digital Fang supports customers to create custom behavior labels, Baidu's stargazing disk, and also supports advertisers to customize groups based on behavior, attributes, and industries.
However, each company still has some shortcomings to a greater or lesser extent, which may become an uncertain factor affecting the change of the industry pattern.
Now, there are two main types of problems they face:
The first is that it is more difficult to get started, more inclined to high-level players, such as the data factory of Giant Cloud Atlas, this kind of problem is relatively easy to solve, it needs market education, such as the "Marketing Science 100 Cases" series launched by Giant Cloud Atlas, which is a path;
The second type is the functional module under the DMP system, which is not as compatible with the business scenario as the label factory, and this kind of problem is more challenging, because it is related to how deep the advertiser's personalization can be.
How deep the degree of personalization can be, will directly affect their advertising commercialization.
04 Conclusion
From the early era of portal advertising represented by Sina and Sohu, to the era of search advertising represented by Baidu, to the era of e-commerce advertising represented by Alibaba, and then to the era of video information flow represented by Douyin, the Internet advertising giants that have risen under each wave have jointly written the development picture of China's Internet advertising.
This process has always been accompanied by the decline of the old form and the iteration of the new advertising form, and the looming competition between the Internet giants has largely served as a driving force.
Excluding those competitive factors, it is certain that whether it is more native information flow advertising, or the data middle stage story that every company is telling today, when each company pays more and more attention to interaction with users, marketing is moving from traffic king to consumer king era.
In the face of the wave of digital marketing, the confrontation between giants will continue.
bibliography:
"Special Analysis of China's Information Flow Advertising Market 2017", analysys Analysys;
"Digital Marketing Industry: How to Break Through small and medium-sized manufacturers? Going to sea and technological innovation is the key", Dongxing Securities;
China Online Advertising Annual Insight Report, 2009-2020, iResearch;
2019 China Digital Marketing Industry Market Research, Head Leopard Research Institute;
"Alibaba: Cultivating a Strong Basic Disk for Core Business", Huachuang Securities