The market environment and user behavior are changing every year, and correspondingly, the channel selection and delivery strategy in advertising also need to change with it.
"It's an obvious fact – when the penetration rate of something exceeds 50%, its share cannot be doubled. ”
This simple view by Peter Norvig, president of Google Research, is known in the industry as "Norvig's Law."
It intuitively and profoundly describes the ceiling effect that exists in the growth of industry and product share.
There is no doubt that today's internet advertising has crossed the tipping point described by "Norwig's Law".
According to eMarketer, more than 50% of the global internet advertising market occurred in 2019, while more than 50% of China's advertising market occurred in 2020.
That's right, as the "substitution effect" of traditional advertising is decelerating significantly, Internet advertising has ended the period of high growth and entered a new normal of regular growth.
According to QuestMobile, internet advertising grew by 7.3 percent last year and is estimated to be 10.3 percent this year, which is no longer a surging figure.
In this new normal, the confrontation between giants has become more intense, and the changes in technology and pattern have made the entire Internet advertising track more and more crowded.
As a veteran of the Internet advertising market, today Wei Xi will take a look at the ten important trends in the domestic Internet advertising market in 2024 under the background of diminishing marginal effect——
First, the advertising ecology is showing a trend of further concentration, and third-party advertising ecological companies are expected to be acquired by giants
Compared with the blooming of foreign Internet advertising ecology, the domestic ecology is objectively more single.
Behind this is the innate "integration" obsession of large domestic manufacturers, which build walled gardens airtightly, which certainly has the consideration of data security and profit maximization, but also leads to the problem of reinventing the wheel.
At the same time, from a realistic point of view, every link of the big factory does it by itself, which does not mean that every link can be done well enough.
In this context, it is actually a more efficient choice to reasonably introduce and acquire some professional third-party companies in the advertising ecosystem.
In fact, we can get a glimpse of the past history of Google, an overseas advertising giant.
- In 2003, Google acquired Applied Semantics, an advertising technology company, and launched Google AdSense based on the company's products;
- In 2006, Google acquired dMarc, a radio advertising company;
- In 2007, Google acquired DoubleClick, an online advertising service, admob, a mobile advertising platform, and AdScape Media, a game advertising company.
- In 2008, Google acquired advertising agency Begun;
- In 2010, Invite Media, a Google adtech startup;
- In 2011, Google acquired Admeld, an advertising platform provider;
- In 2012, Google acquired social advertising startup Wildfire Interactive;
- In 2018, Google acquired Tenor, a GIF advertising agency;
- In 2022, Google acquired Alter, a virtual advertising image company;
Recently, Google also revealed its intention to acquire the marketing company HubSpot, and similarly, Meta, another global Internet advertising giant, has also actively consolidated its comprehensive advertising strength through acquisitions, and has acquired a number of advertising startups such as LiveRail, Atlas, and Rel8tion.
In fact, Microsoft, Amazon, Adobe, WWP, IPG and other advertisers have acquired a number of advertising companies in a very aggressive way in the past, and much of their advertising infrastructure is also built on the products and technologies of these acquired companies.
On the other hand, in China, there are very few advertising acquisitions based on strategic and tactical levels of domestic advertising platforms, and Wei Xi believes that the core reasons behind this lie in two points -
- The "walled garden" advertising ecology of large domestic manufacturers makes it difficult for third-party advertising companies to grow, and there are objectively fewer large-scale and valuable acquirers than overseas.
- The high growth of the domestic advertising market has allowed the giant's advertising business to achieve performance growth through the conventional strategy of "integration", reducing the momentum of vertical integration;
But I'm not ashamed to say that the next big guys' investment strategy actually needs to make a turn.
In the era of rapid development in the past, the choice of investment targets was more based on the imagination space to make strategic investments at the business level, but in today's dreary new normal, investment strategies should be more pragmatic.
Compared with the ethereal "focus on the future" in the past, it is more important to pragmatically "start in the present".
In the past, the giants paid insufficient attention to advertising mergers and acquisitions.
Frankly speaking, in the past two years, some of the marginal increments squeezed out by the advertising departments of large factories are not as large as imagined.
It is more likely to be better than carefully examining several reliable companies in the advertising ecosystem and pragmatically integrating them into the system.
Even Meitu knows that with the acquisition of an advertising company "Ruisheng Tianhe" to collaborate with itself to do data training for AIGC advertising materials, should the advertising bosses and strategic executives of large manufacturers and giants really reflect on whether they have a down-to-earth understanding of the industry?
Looking forward to the opening of the giants in 2024, this is Questmobile's domestic advertising ecological map, I can only help everyone here-
Second, mobile phone manufacturers have become an important pole of domestic Internet advertising
In the past in the domestic Internet advertising market, the influence of mobile phone manufacturers was underestimated to a certain extent.
On the one hand, most of the domestic mobile phone giants are non-listed companies, and their advertising revenue cannot be seen from public data.
On the other hand, due to the relatively single type of advertising, the complexity of advertising will objectively be relatively simpler than that of the leading advertising giants.
Coupled with the fact that the advertising departments of these companies themselves are relatively low-key, and the public voices are low-frequency, their volume is objectively smaller.
However, today's mobile phone manufacturers have become important players in Internet advertising in terms of traffic, revenue and advertising ecology.
Let's first intuitively feel the energy of mobile phone manufacturers from the perspective of advertising revenue data——
This is the share distribution of the number of active smartphone devices in China in February this year.
We see that Huawei, despite being affected by supply cuts in the past, still has the largest share of active data in the stock, with a high share of 22.8%.
Apple followed in second place, OPPO and vivo ranked third and fourth, and among all these head manufacturers, only Xiaomi, which ranked fifth, announced its advertising revenue as a listed company -
According to Xiaomi's financial report, its advertising revenue has reached 20.5 billion yuan in the past year.
This data is about 2 times the advertising revenue of Weibo and 3 times the advertising revenue of Station B, ranking 8th among all advertising giants in China who can see public data.
Topmarketing:
Therefore, although there will be differences in the monetization efficiency of different manufacturers, if Huawei, vivo, OPPO and other manufacturers with higher shares also disclose their advertising revenue, we have reason to believe that the top 10 seats of domestic Internet advertising will definitely be reordered.
The core logic behind this is that the user touchpoints of mobile phone manufacturers are at the "operating system" level.
At the same time, OS also has a natural data advantage in the accurate portrayal of user portraits, so it does give mobile phone manufacturers an excellent advertising monetization niche.
This is also the core reason why Apple, which has thick eyebrows and big eyes, will also launch AppStore ads.
In fact, in North America, Apple has become another important advertising player after Google, Meta and Amazon.
According to Questmobile, Huawei has 281 million active devices, OPPO has 230 million active users, vivo has 180 million active users, and Xiaomi has 120 million active users.
It is not easy to monetize such a huge amount of user data through advertising, and the advertising teams of major manufacturers are doing very granular work in a low-key manner.
The monetization infrastructure of these terminal manufacturers is no weaker than that of many major Internet manufacturers, and many application developers in the industry trust the ad monetization SDKs launched by the manufacturers.
One of my intuitive impressions is-
Although manufacturers like Xiaomi were criticized by the public for their advertising experience in the early years, on the whole, domestic mobile phone manufacturers have gradually regained a balance between advertising experience and efficiency after years of deep cultivation.
In the past year, Xiaomi upgraded Direct Investment 2.0 last year to strengthen the efficiency and transparency of links and data, Huawei has strengthened its monetization infrastructure while refining and deepening the Push scenario, vivo has integrated advertising and services in terminal infrastructure and data intelligence, and OPPO has strived to balance the experience and effect of advertising in terms of portability, native scenarios, and active reach.
I understand that in 2024, while the advertising platforms of mobile phone manufacturers will further strengthen their own infrastructure, some players will actually want to cooperate more deeply with Internet advertising giants, whether it is at the link experience level or the underlying interconnection level, so as to further expand their monetization boundaries.
Third, the competition around the closed loop is accelerating the formation of new walled gardens
Although the term "closed-loop" has been referred to as one of the top three "black talkers" on the Internet, it does describe an effective strategy for advertising giants to maximize profit margins through an integrated chain.
If we look at it with a smaller granularity, "closed loop" actually has two meanings -
The first is the narrow sense of "transaction closed loop", that is, the e-commerce strategy promoted by major platforms, and its foothold is "internal circulation advertising";
The second is the "marketing closed loop" in a broad sense, that is, all the marketing chains are completed in one system, and its foothold is "global marketing".
Looking at the closed loop of transactions first, there is no doubt that Alibaba's marketing revenue has long topped the domestic advertising market, and Pinduoduo's advertising revenue has soared like a rocket, all of which eloquently prove the significance of the "closed loop of transactions" for commercial realization.
It's also easy to understand that there are two core advantages to establishing a closed loop of transactions –
The first is the efficiency improvement of the complete data chain based on transactions, that is, its advertising is more accurate, it knows what the characteristics of those who place orders, so it can accelerate the iterative optimization of the algorithm, and on the other hand, advertisers can also measure the ROI of advertising more intuitively.
The second is that the extension of the value chain, including fulfillment, makes it possible for the platform to collect taxes, and merchants are willing to contribute fees to the closed loop.
Looking back today, Douyin has perfectly executed the closed-loop strategy of e-commerce, so that the growth curve of its traditional advertising revenue gradually flattening has begun to rise again, and "internal circulation advertising" has become the second-level rocket of byte commercialization.
With the same logic, Kuaishou has also enjoyed the dividends of internal circulation advertising in the process of rising e-commerce GMV.
It is precisely seeing the certainty of this closed-loop efficiency that Tencent, which has tried e-commerce for many years but has not been able to do so, has also begun to vigorously promote the e-commerce delivery strategy on Channels, and the management has released signals to develop Channels e-commerce on different occasions.
Of course, e-commerce is a dirty job, its chain is very long, there are many links in the fulfillment, information flow, logistics and capital flow are intertwined, and it is not easy to do it well.
At the same time, within Tencent, the advertising team, WeChat payment team, and video account team also have certain boundaries overlapping in the matter of e-commerce.
It is expected that it will take a lot of time to explore and trial and error in resources to truly form a joint force.
Therefore, although the closed loop is a piece of fat, not everyone can easily gnaw it down, and it may be a more rational choice to make a reasonable trade-off according to the endowment of their own platform.
For example, Xiaohongshu uses its own product tonality to push buyer e-commerce to carry out differentiated competition, Bilibili insists on doing open-loop e-commerce (U selection plan, Beijing selection plan, Spark plan, etc.), and Weibo shrinks the e-commerce business according to the actual situation, in my opinion, all pragmatic and rational choices.
OK, after talking about the narrow sense of "transaction closed loop", let's look at the broad sense of "marketing closed loop" -
To put it simply, it is to provide a "one-stop, one-stop" service, allowing advertisers to complete the entire marketing process within one platform, so the word "global domain" has become a high-frequency word on major platforms.
In the past few years, Alibaba, Tencent, Byte, Kuaishou, JD.com, etc. have all proposed "global marketing" with different meanings:
Some pay attention to the linkage between public and private domains, the connection between online and offline, the comprehensive coverage of some main scenarios and the comprehensive opening of data, and some emphasize one-stop full-link services.
"It's enough to choose me as the main position!"
It must be admitted that the closed loop of each company does improve the stickiness and dependence of advertisers in an ecosystem, but this kind of marketing "walled garden" also creates objective obstacles for advertisers to a certain extent.
For example, if you choose the CRM system of an advertising platform, you can't manage the data of customers from other sources very comprehensively;
Another example is choosing a private domain service in one company, which means that there is no way to promote the competitor's undertakings in another with great fanfare.
This fragmentation is a product of competition, and in 2024, under the premise that the market pattern does not occur drastically, the overall situation of the advertising fence garden will not change.
Of course, this is not a monolith, and the next trend we talk about is a small trend under the big trend -
Fourth, based on regulatory and monetization considerations, the giants will continue to cooperate with each other on a limited basis at the advertising level
On May 10 last year, Tencent Advertising and Alimama announced in a low-key manner that they would join forces to prepare for the mid-year 618 promotion.
On September 27, the two sides held a high-profile "Alimama UD×Tencent Advertising In-depth Cooperation and Exchange Conference", and the two sides jointly launched the "Double 11 Super Detonation Plan".
In my opinion, this cooperation, which has been interpreted by many media as the "reconciliation of the century", is a pragmatic recognition of the established status of the adversary by both sides.
The core of it is that Ali recognizes the throne of Tencent's traffic king, and Tencent accepts the fact that Ali is the leader of e-commerce.
In a sense, this is a two-way "resignation" between the two sides.
In the course of years of "Internet Cold War", the two sides have learned the strength of their opponents, given up fearless competition, and accepted the current pattern, thus achieving a rare cooperation in the gradual involution of competition.
Indeed, the gunpowder smell of competition between the two sides was extremely strong, and the core was that the "two horses" at that time firmly believed in one thing - they could shake the other party's basic plate through competition with their own strength.
So the shielding that we see is a two-way shielding that happens sequentially -
First of all, the Tao Department took the initiative to block WeChat's traffic.
The logical starting point is to control the autonomy and distribution of traffic, enjoy the e-commerce marketing budget exclusively, and at the same time be confident that the traffic of the media territory built by itself is sufficient, and there can be no traffic shortage;
Then WeChat blocked the Tao link in reverse.
The logical starting point is to cut off the social natural traffic of Tao e-commerce, support the e-commerce team in its own ecology to become bigger and stronger, and form a joint force to besiege the e-commerce "Guangmingding".
Looking back now, the strategic intentions of both sides have not been fully realized-
Ali's own traffic strategy failed (back and forth, excellent soil, live broadcast, Weibo), and he lost social traffic, forming a huge traffic shortage, so much so that he had to engage in offline parties with traditional TV stations to supplement the traffic library;
Although Tencent's investment in JD.com has indirectly supplemented the e-commerce territory, and at the same time, mini program e-commerce and video number e-commerce are also rising, it has withdrawn most of JD.com's shares in the past two years in an uncertain environment, and objectively it still has not become a core player in the e-commerce track.
Nowadays, the landlord's surplus food is not so much, Tencent is surpassed by bytes in terms of income, and Ali is approached by Pinduoduo in terms of market value, it is time to reflect on the necessity of the former "strategic initiative" in today.
That's right, making money is king, and fearless confrontation of competing for the sake of competition makes no sense.
I still remember that the momentum of Miaopai in the Weibo system was booming in the short video track, so I decisively switched Meitu's Meipai advertising on Weibo.
Looking back now, these actions like elementary school students picking their hair can't change the two products of Miaopai and Meipai are both ruthlessly slapped on the beach by the tide of the times.
Therefore, we have seen the in-depth cooperation between Tencent Advertising and Alimama, the rebroadcast of Honor of Kings on Douyin, the opening of WeChat payment by Ele.me, the cooperation between Tencent Video and Douyin, the opening of Ali's Hema on JD.com, the opening of its own flagship store on Tmall, and the relaxation of Weibo on certain competing keywords.
I believe that the ice will continue to thaw in 2024.
Behind this is not only the objective pressure of anti-monopoly, but also the pragmatic consideration based on the realization level, after all, making money is not chilling~
When Microsoft's Nadella decided to develop an iOS version of Office, the public would not have imagined that this series of seemingly defeat-defeating pragmatic moves would subtly propel Microsoft's ship into a new life.
Today, Microsoft's market capitalization has increased fivefold in terms of market capitalization as it did when it was on the AppStore.
Fifth, the large model and AIGC are accelerating the penetration of Internet advertising in different chains
There is no doubt that large models and AIGC are the technologies that have transformed the Internet advertising industry the most in the past five years.
If last year's large-scale model for Internet advertising penetration was only in the stage of small testing, then this year's large-scale model and AIGC have begun to transform every subdivision of Internet advertising from various dimensions and chains;
The core logic behind this is that AI technology with large models as the core can greatly improve the efficiency and effectiveness of advertising at the two levels of "matching" and "creativity".
Google was the first to act, not only inserting ads directly into the conversational AI product Bard, but also supporting real-time ad copywriting, in addition to launching a series of AI tools, such as landing page scraping to generate copy, AI product images, etc.;
In China, major advertising companies have also integrated large models and AIGC into the advertising process from different angles.
Baidu has successively launched the AIGC creative tool "Qingruo", the marketing dialogue robot brand Bot, the AI delivery platform "Qingruo", and the AI-based underlying advertising technology architecture "Yangji", which is very systematically moving closer to native AI marketing from models to applications.
Judging from the results, Robin Li mentioned in Baidu's Q4 earnings call: The advertising system based on large models generated hundreds of millions of yuan in incremental revenue in the quarter, demonstrating good monetization potential.
Tencent Advertising is also working on large models.
In fact, the hybrid model launched by Tencent in September last year originated from the advertising technology department, and the initial application of the model is to improve the matching efficiency of the advertising system, and has supported the operation of the advertising system in multiple links such as ad matching, intent understanding, and creative generation.
Its latest move is the launch of the AIGC advertising creative tool - Miaosi, which has performed well in terms of efficiency and penetration rate according to the feedback of many advertisers around me.
Kuaishou is also actively deploying, as a content company, Cheng Yixiao, who has a technical background, has always been supportive of AI investment, saying that the large model of 175 billion parameters trained by Kuaishou Q4 is "confident that it will reach the comprehensive level of GPT4 within half a year".
The Kuaishou advertising department applies AI to the different links of advertising production, understanding, distribution, and undertaking.
Among them, the video AIGC product "Pangu" and the digital human live broadcast product "Nuwa" have been launched, and at the same time, the vertical pre-training of the general large model has been commercialized, and AI tools such as intelligent customer service have been launched to improve advertising efficiency.
Other advertising head platforms are also using different methods and efforts to cut into large models and AIGC.
In 2024, I will focus on two points for the application of AI in the field of advertising -
The first is explicit – that is, whether AIGC's creative tools can continue to break through in terms of effectiveness and ease of use.
Frankly speaking, the creative tools of major platforms are basically still in the "usable" stage of 1.0, and in order to evolve to the "easy-to-use" stage, we must continue to make breakthroughs in multiple perspectives such as generating effects, collaborative convenience, large-scale efficiency, stability, and ROI conversion data feedback.
The second is implicit – the extent to which AI can improve the matching efficiency of "computational advertising" ads.
In essence, it still solves the problem of "50% of advertising dollars are wasted", and this is a problem below the surface of the iceberg, hidden in the massive code iterations of countless algorithm teams and engine teams, which is not easy to perceive, but can be measured.
Why are advertising giants investing in AI with such great enthusiasm?
The answer is - in the extremely ROI-oriented track of advertising, effect is everything, and the large model has eloquently proved that it can greatly improve advertising performance from the perspective of data, whether in terms of matching efficiency or creative effect.
This is undoubtedly a shot in the arm against the backdrop of declining marginal benefits in the entire advertising market.
There is no doubt that this trend will only continue to soar in 2024, and whoever is slow to invest and who is lazy in technology will lose out in the competition.
6. Search based on its own advantages has become an important marginal increment in the Internet advertising market
Unlike Google, where the U.S. search market is dominated by Google, Baidu's share of traditional search has been leading, but the Chinese search market has largely evolved in the direction of a hundred flowers.
The logic behind this lies in the fact that the "island effect" of the mobile Internet with App as the core makes it objectively impossible for traditional search engines to achieve saturated coverage.
As a result, other super apps and vertical apps have naturally formed a fragmented search ecosystem.
For apps that are not traditional search engines, there are two major characteristics of search traffic -
The first is that the intent is very strong, and the second is that the scale is relatively small (compared to other behaviors in the app such as browsing and playing).
The former makes it naturally have a very high monetization efficiency, and the latter makes major platforms not pay attention to the value of search at the beginning.
In the era of the explosion of main App traffic, the amount of search cannot enter the eyes of the giant's commercialization.
It's easy to understand that in a golden age that can be dug up with a casual shovel, there is no effort to find diamonds that are scarce and buried deeply.
Now that gold production is reaching its ceiling, the value of diamonds becomes precious.
Therefore, we see that whether it is Douyin or WeChat, whether it is Xiaohongshu or Kuaishou, they have all invested in the monetization of search with considerable enthusiasm in the past two years-
On the one hand, the entrance has been strengthened at the user product level, such as the search guidance in multiple locations of Douyin and the keyword search icon in the WeChat official account;
On the other hand, at the level of commercial products, a complete system of search advertising products has been built to strengthen the monetization efficiency of search advertising.
Whether it is Douyin's "heuristic search" or Xiaohongshu's "life decision search", these new search products that "search while swiping" occupy a unique ecological niche in the traffic mind.
Today's consumer purchase chain has indeed evolved from the traditional AIDA (A follow - I interest - D desire - A purchase) model to some extent from the AISAS (A follow - I interest - S search - A purchase - S share) model.
Whether it is a pan-search or a refined search, search has in fact become an extremely important part of the consumer decision-making process.
That's right, from an ECPM perspective, sponsored ads are undoubtedly the top of all advertising products, if not one of them.
However, it is not easy to really do a good job of sponsored advertising, sponsored advertising is a sophisticated machine, and the core of it is that it requires a set of search marketing solutions from traffic, insights, goals, targeting, matching, measurement and operations.
And this solution is not simply to build a shelf, but to make each part really work, which requires long-term running-in, iteration and continuous optimization.
Starting from Google's AdWords, search advertising is actually a category with a long history, and it has accumulated enough methodologies in the long run.
Now that the major advertising platforms have built a solution for search advertising, 2024 is the time to test the effectiveness of this solution with live ammunition.
I have only one simple suggestion for how to do a good job of search advertising on various platforms in 2024 -
Learn the advantages of Google and Baidu at the level of search advertising products in a down-to-earth manner, not only looking at the form, but also looking at the connotation.
After all, many of the playing methods accumulated for more than ten years have indeed been tested by the market.
7. "People-centered" is reshaping the traditional single advertising logic
In the early days of the birth of Internet effect advertising, advertising creativity did not have the element of "people", whether it was the text chain of search advertising or the product of e-commerce advertising, it displayed pure product information.
However, when this purely informational advertising is scaled up, a delicate question arises - how to ensure the trust of informational advertising?
Therefore, the introduction of the new element of "people" has become an important solution to improve the marginal efficiency of advertising.
Whether it is an amateur or an expert, whether it is a KOC or a KOL, as long as the production is live content, it will naturally be more infectious and warm.
This appeal and temperature are amplified by advertising, and the ROI is usually higher than that of plastic-flavored informational advertising.
Why are there more and more celebrity avatars in Moments ads?
Why do Douyin, Kuaishou, Xiaohongshu, Weibo, and Bilibili all make the talent matching platform an important commercialization module?
Why are major platforms pushing "native ads" published with real accounts?
The core lies in the structural advantages of "people as advertising" over the previous purely informational advertising;
In today's era of creatives and initiatives, user maturity is rapidly increasing, their requirements for the quality of their app's content are increasing, and their tolerance for hard-to-reach content with strong conversions is decreasing.
Therefore, whether it is in terms of form or traffic distribution, native advertising with "people" as the core can interact with the audience more naturally and with a weaker sense of marketing, and complete the planting and pulling of weeds in a subtle and silent way.
That's why Xiaohongshu admires Philip Kotlerti's "H2H marketing".
That's right, the humanistic marketing of "Human to Human" can have a more direct impact on consumers, which is consistent with the original concept of "good communities grow good businesses" proposed by Conan, COO of Xiaohongshu;
Similarly, Weibo, as a "square", also attaches great importance to the value of "people".
The brands that are thriving on Weibo, such as Xiaomi and Ideal, all have a deep understanding of the core concept of how to influence the minds of target consumers through key people;
Bilibili's advertising revenue increased by 27% last year, ranking first among all its business segments, and it is also the direct result of the marketing logic with "UP master" as the core being recognized by different brands;
Douyin and Kuaishou's live slices are widely used as advertising materials, which is actually a microcosm of the increasingly important "people"-centered advertising.
The core behind this is that within a limited budget, live slicing can help achieve better ROI, both at the planting and pulling levels.
You think that the advertiser spends "pit fees", but in fact he spends "endorsement fees".
The core logic behind this is that in an era of overabundance of goods and a surplus of choices, nothing can tap into people's latent needs better than people themselves.
So, in this sense, advertising has been evolving in one direction in terms of content - PaaS, People as a Service.
The essence of people-centered advertising is "more sincerity, less routine", and this is actually the most important principle that advertisers should follow when advertising.
8. "Marketing Science" is continuing to evolve towards a more refined perspective
According to the "China Advertiser Marketing Trend Survey Report" released by CCTV Market Research (CTR), 31% of advertisers are willing to increase their advertising offerings.
This means that 69% of advertisers will maintain or reduce advertising this year, which also means that the competition for advertisers will continue to intensify on major ad platforms.
In the context of the overall market slowdown, the most direct action for advertisers is to reduce the proportion of brand advertising.
The core logic behind this lies in the fact that the measurement of the effectiveness of brand advertising is itself a vague area compared to visible and tangible performance advertising.
In order to maximize the budget for brand advertising, platforms must clarify this ambiguous area through data, and so the metric-focused marketing science was born.
That's right, objectively speaking, performance advertising does not need "marketing science" in a sense, it is scientific if it can be sold, and it is not scientific if it can't be sold, and the ROI is clear and clear.
However, the effectiveness measurement of brand advertising is much more complex, its effect is first difficult to attribute, and second is the long attribution cycle.
Therefore, it is not enough to look at short-term outcome indicators alone, but process indicators must be clearly measured.
If we look at advertising as investment, performance advertising is a direct investment in stocks, and you can see the ups and downs immediately.
Brand advertising is more like investing in private equity funds, you must clearly explain to LPs the investment theme, investment philosophy and investment logic behind your fund.
In addition, advertisers who used to purely advertise for performance will gradually find that as soon as the advertising stops, the sales will collapse.
Therefore, some effect advertisements will also have the motivation to calculate the long-term account, and begin to cooperate with some brand advertising, so the "product and effect synergy" was born.
Yes, in the long run, the significance of brand advertising is of course self-evident, but due to the ambiguity of its short-term effect, any unclear delivery may attract accountability from increasingly critical bosses.
彼得德鲁克说：“If you can’t measure it, you can’t manage it”
In this context, "marketing science" has become an important tool for major platforms to persuade advertisers to place orders.
From the current point of view, the "marketing science" architecture of each platform is born from the earliest AIDA (A attention - I interest - D desire - A purchase) model in consumer behavior from the perspective of traceability.
The "O-5A model" of the massive cloud map has indeed gained a wide range of minds among different vertical advertisers after nearly two years of continuous voice.
Since then, the measurement models that have been released have also added different features according to the endowment of their own platforms.
For example, the 5R model of Tencent Advertising's "Ruyi" emphasizes more on "global, dynamic and three-dimensional";
Kuaishou Magnetic Ark's "5R model" has also derived the "SPU 5R model" specifically for commodities;
Baidu's "AIA-GROW" system synergizes crowd stratification and marketing measurement.
Alimama proposed the "AIPL model", "FAST model" and "GROW model" to cover marketing evaluation in different scenarios.
For marketing measurement products on different platforms, the development process actually has to go through three stages, which are "have-use-recognize"——
"Yes" is a product that can only provide measurement and evaluation, which is the first step, but having it does not mean that advertisers will actually "use".
If the product is rough, the data is coarse, and the accuracy is poor, the advertiser will not use the chicken rib product, and the indicator measured in the "use" stage is the penetration rate.
The third step is to use it to really guide decision-making and evaluate the effect, and advertisers will "recognize", and the indicator measured in the stage of "recognition" is activity.
In 2024, the competition of marketing science will continue to revolve around the last two stages of "have-use-recognize".
The competition is not only about the technical capabilities of the product, but also about how the operation and the market can really penetrate the minds of the target advertisers.
9. Automation has become the new focus of the technology competition of advertising giants
From OCPX to automated bidding, with the blessing of AI technology, Internet advertising technology has been evolving in a more intelligent direction, and the direction of the giants' latest volume is "delivery automation".
Why is Internet advertising evolving towards automation?
We can actually understand it from several other perspectives -
We used to think we knew our own preferences, but with today's recommendation algorithms, you will find that machines actually know us better than we do after large-scale data learning;
We used to think that autonomous driving would be difficult to reach the level of human driving, but today's industry-leading intelligent driving technology has begun to challenge this conclusion.
In the same way, we used to think that advertisers know their products best, so advertisers must be the owners of advertising, and they can maximize efficiency by doing it themselves.
However, with the massive evolution of ad tech, today's automated delivery technology has shown great potential at the efficiency level.
As an advertising giant and AI giant, Google is the first to make efforts.
Launched in 2021, the automated delivery Preformance Max product has been deployed on a large scale in Google's advertising system.
According to Google's 2023 financial report, Preformance Max has greatly improved the efficiency of ad monetization, while the penetration rate has increased rapidly among advertisers.
Meta, another advertising giant, followed suit, and its Advantage+ product launched in 2022 also showed significant improvements in ROI, consumption, and delivery convenience.
Not to be outdone at the level of automated delivery in China——
Byte's Big Engine has launched a number of phased products dedicated to automation, such as automated bidding, no-bid, and so on.
In 2023, it will integrate the previous automated delivery products UBL and UBA, and launch a more systematic automated delivery product UBMAX.
The product has gone through the exploratory period and has been accepted by advertisers in different industries in terms of efficiency and effectiveness.
Kuaishou also highlighted the introduction of automatic delivery technology (UAX) at this year's Magnetic Engine Conference.
As far as I know, Tencent Advertising and Baidu Marketing are also pushing automated delivery technology in their own way and at their own pace.
The logic behind this is that-
In recent years, after the important breakthroughs in OCPX, DPA, and RTA, automation is one of the few comprehensive technologies that can greatly improve the overall delivery efficiency of the platform at the system level.
Of course, I also learned from some domestic advertisers that the automated delivery technology of major platforms is still evolving, and there is still a lot of room for improvement in cold start efficiency, effect stability, and ROI optimization in the initial stage.
In fact, in a sense, this also shows that automation technology itself is a contest of comprehensive strength, which not only tests the depth of the bench at the technical level, but also tests the execution efficiency of product operation capabilities.
The revenue of an advertising platform is, in the final analysis, a function of efficiency.
Therefore, it must be emphasized that whether it is from the observation of the actions of the overseas advertising ecology or the deduction from the evolution trend of advertising technology, the comprehensive efficiency of "automated delivery" is a tough battle that all advertising platforms, especially the leading manufacturers, must fight.
In 2024, any platform that does not recognize the importance of the project and does not invest enough will definitely pay the price of real money in the next competition.
10. The market concentration of advertising alliances will be further strengthened, and the competition of alliances will enter the deep water area
There is no doubt that Internet advertising is extremely long in the upstream and downstream chain.
This long chain is essentially a value chain based on ecological niches, and it is a logical choice for advertising giants to further improve the overall synergy efficiency and expand to the upstream and downstream of the industry.
As a result, the advertising alliance of Chuanshanjia, Youlianghui, and Kuaishou Alliance was born.
Essentially, they are wholesalers of traffic, and apps are willing to cooperate with it, the core of which lies in the fact that they occupy the three core elements of monetization -
First, they have a large number of advertisers;
Second, they have extremely accurate data and portraits, and advertising is more efficient;
Third, they have an existing ad monetization infrastructure in place, so there is no need for apps to reinvent the wheel on their own.
Today, the competition in ad networks is fiercer in both breadth and depth, specifically in two directions –
The first direction is to scale up, which is to expand further upstream into the ad network.
For example, the giant engine has launched aggregation and monetization products such as GroMore, striving to cut into the monetization of the App from a more source perspective, and also integrates vertical monetization modules such as "short dramas" and "e-commerce", and uses the pure data product of "Growth Advisor" to penetrate into the entire growth cycle of the App.
The other direction is to scale out and break through at the type of traffic and other levels.
For example, Ulianghui has found another way to cut into the search traffic that is not easy to monetize in the traditional sense, and at the same time customizes personalized advertising styles such as bookmarks for vertical scenarios such as reading.
In 2024, the competition of advertising alliances will undoubtedly continue in these two directions.
For example, on the one hand, the Kuaishou Alliance will continue to strengthen its advantages in the internal circulation budget, and on the other hand, it will tackle the traffic of manufacturers and do in-depth co-construction of manufacturers.
Although we can't visualize the distribution of ad networks' market share through publicly available data, from the data released by major alliances, the growth rate of their market data (such as share size) in the past year is higher than that of the overall advertising market.
In a sense, this actually means that the market concentration of ad networks is increasing.
In 2024, the top advertising alliance is expected to further enhance its market concentration through continuous horizontal and vertical efforts, not only for products and technologies, but also for operations and services, and its competitive intensity will continue to be maintained.
epilogue
Advertising is the No. 1 business model on the Internet.
While it's true that most advertisers are a little tired in the context of the slowdown in the industry, the former sharpness seems to be dissipating.
However, from another perspective, the advertising industry, as the closest scale track to monetization, is destined to continue to stand in the center of the technology stage for a long time, and will continue to evolve in the tide of technological changes and pattern changes.
Don't lie flat, Internet advertiser~
Columnist
Wei Xi, everyone is a product manager columnist, WeChat public account: Wei Xi Zhibei (ID: weixizhibei), the author of the year in 2018. An advertising product manager with a wide range of interests, dedicated to in-depth analysis of the logic of the Internet in simple language.
This article was originally published on Everyone is a Product Manager. Reproduction without permission is prohibited.
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