Exclusive re-launch of Tencent's fastest-growing division: How social advertising is growing fast
This.3Since the month, Morgan Stanley, Bank of America Merrill Lynch and other investment banks have held a stake in Tencent (00700.HKReiterating the importance of maintaining the rating, the main logic is that, in addition to the good outlook for mobile games, online advertising has been established as a new engine for Tencent's business growth.
2015Years.4Month Tencent announced the merger of Guangtong and WeChat Advertising Center to form a social and performance advertising department, and its social advertising business will be unified into that division, belonging to the enterprise development business group (CDG）。
In the year that followed, the sector developed at a "rapid pace". According to Tencent's financial results,2015In the second, third and fourth quarters of the year, the performance advertising revenue was respectively20.57Billions of yuan,23.86Billions of dollars and29.16billion yuan, year-on-year growth rate is respectively196%、160%And.157%The figures stand out in Tencent's earnings report, which has become one of Tencent's fastest-growing businesses.
In fact, Tencent's social advertising is not just carriedQQSpace, WeChat commercialization task, explore how Tencent's huge product matrix through marketing to achieve traffic realization, but also a new department of the Internet to try, the Internet marketing industry a test field.
Tencent's Social and Performance Advertising Department has been established for the first anniversary. Recently, the head of the department, Tencent Group Vice President Lin Wei accepted an exclusive interview with the word head, the first external re-opening of this seemingly mysterious department.
Lin Yu2013Years.4He joined Tencent in June to lead Tencent's social advertising business and is also the general manager of the Strategic Development Department, where he is responsible for the construction of the company's strategic platform, the formulation of the Group's business development strategy, the innovation of the Group's business models and the business cooperation of out-of-country investment. Prior to joining Tencent, Mr. Lin was a global partner at McKinsey and Company.2001He was admitted to Harvard Business SchoolMBADegree.
Break the closed-loop merge logic
Tencent's decision to merge WeChat's advertising center with Broadcom to set up a social and performance advertising department attracted widespread attention in the industry.
On the one hand, WeChat friends circle advertising has received a good response, at this time from WeChat launched friends circle ads three months later;WXG), Broad Point Originally belongs to the social networking business group (SNG), the core products of these two business groups WeChat andQQ, in the eyes of the outside world has always had a certain meaning of internal competition.
This level of merger, the need for two business group leaders - Zhang Xiaolong, Tang Daosheng support to operate, but also need Ma Huateng's approval.
This is not the first time Broadcom and WeChat have come into contact. back in2014Years.2In June, Guang point pass on hand WeChat, jointly launched the public account promotion plan, launched the effect of WeChat public number advertising products, WeChat public number at the bottom of the open advertising space. But that didn't actually bring Tencent revenue growth that matched Tencent's social advertising, which was later consolidated.
But.2015Years.1Moon WeChat team launched the first circle of friends ads, but Tencent's revenue brought a lot of reaction.2015Years.Q1Revenue from Tencent's online advertising business27.24billions of dollars, and arrivedQ2That number quickly rose40.73billion yuan, of which the effect of advertising revenue contributed20.57billions of yuan.
"The original collaboration didn't see the obvious chemical effects, so we thought about doing an organizational change, putting everybody on a boat and becoming brothers, so the thinking changed." Lin said to the word-head agency.
Broad point pass turned out to be Tencent's performance advertising platform,2011In three years, the size of the team has increased tenfold to the end of the year2015Years.4In the past month, Guangdingtong has driven the annual revenue of traffic to reach billions of yuan.
Theoretically, Broadcom's experience in performance advertising, talent pool, industry knowledge and the basis of partners have a certain accumulation. Mr. Lin said that Guangtong has industry-leading technology advantages, while WeChat has huge traffic and various advantages, Tencent came up with the idea of a "strong combination."
For years, Tencent has divided its business groups by business and encouraged them to create closures in terms of efficiency and technical understanding of their products. The merger of WeChat advertising and Guangtong actually broke the original closed loop, which was indeed questioned by many people in the early days.
Mr Lyn admits that there are a lot of difficulties in the process of promoting the merger, and that reasonable reasons can be found in their respective positions. "It was still hard at the time, and it would take some persuasive work to get the two groups to be brothers to each other, to open up the pattern of internal competition, and to work together on advertising."
In addition to the work of persuasion, Lin is faced with the reinterpretation of roles, modes of cooperation, and relationships, the boundaries of division of labor or the boundaries of non-division of labor, or where the boundaries of cooperation are in the midst of organizational change.
At present, Tencent social advertising has become a service department of Tencent's internal traffic commercialization, dealing with the commercial aspects of advertising, and contact with advertisers, agents, establish cooperative relations with WeChat,QQand other social platforms to cooperate, so as to carry out advertising product development, extension.
New engine test
Advertising isPCThe earliest and oldest business model in the Internet age. But the rise of the mobile Internet, mobile advertising has been slow to break out, how many people want to detonate, but all fold in it. This may depend on a number of factors, including a small smartphone screen, a single early advertising model, ad networks that don't have a strong enough traffic portal, and so on.
On the one hand, the demand of advertisers is migrating to the effects category, and the 28th Law is even more serious on the mobile Internet. This makes mobile advertising a business smoother for companies with access-level applications and data mining capabilities.
QQSpace, WeChat and other powerful scene traffic and wide-ranging technical capabilities, is undoubtedly the social advertising department can hand over excellent transcripts of the key factors, but to some extent also benefited from this departmental adjustment, this adjustment is the Internet advertising department or corporate structure set up a new sample.
After breaking the original closed loop, the channel of internal communication, frequency and speed of decision-making are no different than before, while the cost of communication in business promotion, involving the evolution of system capabilities and the development of functional back-end technology, the cost of communication is decreasing. "We can start with a finer division of labor, more people to advance technology, and in terms of advertisers, who used to separate two people to reach the same advertiser, now we can reach an advertiser with one person, and now we can reach advertisers. "
From the chain point of view, Tencent social advertising contains the previous product design, the middle of the online advertising system, to handle real-time requests, may be the Internet's existing services in the most complex type of talent. Product class, technical engineering class, algorithm strategy class, data mining class,to BPeople such as interaction design and operations are what the department needs.
Of course, in today's social platforms so developed, distribution channels scattered, many advertisers' ideas can also detonate social advertising in an instant. For example, the recent brand promotion and sales transformation of Pepsi "Monkey King" video ads, small displacement models of BMW "snake-eating" video ads in WeChat friends circle have won applause, has become the benchmark of social marketing.
"These cases are creative, and we've always encouraged advertisers to be creative and renderedCampaignand create a good connection with the brand. Lin said that social advertising is a business idea amplifier, its own advertising system can not represent the value of commercial advertisers themselves, nor can it represent its creative creation, we can only act as an amplifier, we hope that more and more people can find a good way to play, we are doing in fact to provide better rendering, to help the brand win users.
In terms of creativity, Tencent Social Advertising is going in this direction to do some experience accumulation, began to build creative groups, from the industry to find people related to creativity. "We want to develop into a small, but influential and quality creative studio that doesn't need to be big but needs to be influential, and can work together through benchmarking to make the industry more likely." Lin said.
Although the social advertising department is growing rapidly, but in the process of advancing, the outside world has not given full recognition, such as Lin Wei also concerned that many users in the Spitting WeChat circle of friends push ads are not accurate, WeChat user experience decline.
Lin believes that the accuracy of the two perspectives, one is whether the advertiser has pushed his users, and the other is whether the pushed user should be recommended. "We create an atmosphere where people can express their opinions about ads that advertisers don't necessarily want to see, maybe users already know the brand, or the idea isn't what users like, and that's meaningful feedback for advertisers."
In the final analysis, Tencent social advertising is actually a balanced role, on the one hand to meet the various marketing needs of advertisers, on the other hand, to estimate the user's feelings, in the middle to achieve a balance is the display of their ability.
'Tencent is very concerned about the user experience, ' Mr. Lin said. 'WeChat advertising has a lot of technical and administrative rules and rigid terms. "Technically there's freshness control and user feedback, it gives users the option to choose, you can choose not to be interested, and so on, and that's something we'll record and adjust from time to time." 'In the circle of friends, a user is there, ' Mr. Lin said24You won't see more than one ad in an hour, and this rigid standard still exists. "Of course we think it depends on the time, depending on how much people accept the ad, or the advertiser's need for the advertising environment, and my feeling is that we're going to grow slowly, but not very quickly."
The future of social advertising
As mentioned earlier, a number of investment banks are now bullish on Tencent's social advertising, in other words, social advertising part of Tencent's future share price growth space.
Within Tencent, social advertising has been given two layers of meaning. One layer is the significance of creating shareholder value and becoming a stable source of financial contribution to the company for a longer period of time in the future, and the other layer is to further consolidate Tencent's significance as a "connector" and turn a commercial link into a deeper combination through advertising.
And this new revenue engine is also a sharp weapon under the Tencent cable. It is understood that at present, Tencent social advertising to promote the card coupon advertising, is on the line and offline connectivity has a role.
"Previously any of our online ads, even with clicks, couldn't prove that they could really connect to consumption and see the conversion path." Lin explained that card coupon ads, plus WeChat andQQTwo superAppIn the payment,DAUand so on, allowing ads to be converted from exposure to payment in a very consistent way. "So we want to be able to empower advertisers with the platform's ability to advertise."
In fact, when huge online traffic is combined with offline business, the imagination space behind this is huge, and that's what's going on right nowBATAnd so the internet giants are moving in the direction. However, from the presentBATIn terms of the momentum, Tencent is inO2OThe field has not yet been strong enough to come out.
Will social advertising become Tencent?O2OThe fulcity? Lin did not give a positive answer. However, Tencent will make further efforts nextLBSAds, mainly facing offline merchants, are pushed around users based on geographic information, shrinking the user's area to a certain area or even a commercial block. That is, passLBSAds, coffee shops can send invitations or coupons to people around them. Mr Lyn said this would give greater play to the ability of social advertising to connect users with offline merchants.
Mr Lin said the real letLBSAdvertising is effective and requires a variety of capabilities. First, the platform has a large enough reach, coverage to be wide, and second, there must be enough users to understand, such as where the resident area, this is a display of data capabilities, the map under the underlying data constantly interpreted and mining, and finally, there is an advertiser ecology, advertisers why to serveLBSAdvertising, because there is an effect, there is an effect from whether there is a landing page carrier, such as card coupon class orLBSShow, and this voucher can be write-off, payment capacity is particularly critical.
Next, Tencent's social advertising aims to serve more and more advertisers. "Revenue doesn't have to be that high, but the number of advertiser services I hope to pursue is relatively high growth, including coverage for the industry, as well as the penetration and retention of advertisers in each vertical industry, which is a more important indicator of our desire for both brand and performance."
At present, Tencent's social advertising has no plans to access Tencent's other departments and products, with a focus on serving WeChat well, Mr. Lin said.QQSpaceQQBrowser, App Bao and Tencent Mobile Alliance. "Do it well and you'll have a lot of work to do."
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