Party A's Business View: I dreamed of the first wave of advertising price cuts

In recent years, the advertising industry has been changing. This article also summarizes some business thoughts about the advertising industry, and I hope it will be inspiring to you.

01

A certain fresh food platform ranks first in the beef and mutton category, with online sales of nearly 1 billion and an annual net profit of only tens of millions.

In a big promotion of buy one get one free, millions of dollars will be lost. Even though you know you will suffer a loss, you still have to give face to the platform (in the past, people thought these big promotions were marketing tricks, but they didn’t expect the goods to be genuine and the prices to be low, so it’s worth taking advantage of this kind of wool).

Hundreds of people in the upstream and downstream of the industry chain work hard all year round, but the founder actually makes very little money.

The platform and the leading merchants have a truly symbiotic relationship, supporting each other and growing in parallel. The single products that are popular (annual GMV of 50 million+) are all improved through actual combat. These single products are the "treasures of the store" and are of great significance in locking in long-term customers.

Mature supply chains have an average gross profit margin of 3-5 points, while innovative products can achieve 10-15 points.

Respecting business humanity, multi-platform operation is inevitable, and parent company + supply chain + dedicated platform sub-brand is the general solution.

Everyone wants to develop private domains, but this is another difficult problem, which I will explain in detail later.

02

Anyone who says that the advertising industry is dying really doesn’t understand the industry. Just take a look at the financial reports of various companies and you will know.

Whether it is outdoor advertising or Internet advertising, the gross profit margin is generally above 50%.

In the first three to five years, the advertising infrastructure and algorithm theory of various platforms were almost completed, which means that the marginal cost has long been reduced. In the past two or three years, in order to reserve cash for themselves (to cope with extreme situations), they have gritted their teeth, covered their hearts, and covered their mouths, and pushed the gross profit threshold to the extreme, and their accounts have indeed bulged a lot.

It is bold to predict that the first wave of advertising price reduction will come in 2025, which is similar to the logic of cloud.

It's like a dream, with a high probability of being slapped in the face. It's a simple and beautiful hope, but it's actually more difficult for businesses to do so. Let some soup leak through your fingers.

03

For mid-sized companies, the big guys are harder to beat than before.

The reason is simple. Everything is done by people. If you want to win, you only need to defeat the executives several times in a row. Then they will lose faith and switch to another track. There are plenty of opportunities anyway.

It’s no longer possible now. There are no new tracks. The VPs have higher patience and are determined to defend their old positions. It’s basically a protracted battle.

Looking at the secondary market, it is difficult for these companies’ stocks to rise because they are struggling and tiring in competing with the giants.

04

JD Lao Liu, you have been away from the first-tier cities for too long. The extravagance and decadence of Dubai is really mind-boggling.

We have to acknowledge two objective facts: one is that in the consumption downgrade cycle, low prices are indeed the mainstream of the billionaires; the other is that the pressure brought by PDD and DY is even greater than that of AL back then.

But JD’s actions in the past six months are not really smart. The logic of making up for its shortcomings seems correct, but it is actually an abyss.

Middle and senior managers lack a sense of security and value, grassroots employees have lost their sense of freedom and belonging, and they are obsessed with attendance every day. The outdated smell of management is choking young people.

A certain kind of pro-cyclical correctness reveals a firm loss of confidence in one’s core values.

Helping brands become stronger brands should be JD’s mission, but unfortunately the executives are holding review meetings thousands of miles away, and the cost of telling the truth is too high.

05

A chemical reaction has occurred in the corporate training track.

It is still rolled out. There are several potential energies here. One is the business school group's search for growth; the second is that a large number of people in knowledge payment are eyeing the B-end payment power of the sinking market; the third is the new technology anxiety stimulated by AI.

State-owned enterprise groups whose main battlefields are in second-, third- and fourth-tier cities have sufficient training budget inertia, but have always lacked a good delivery model. This small piece of cake is suitable for increasing a certain value, and multiple parties hit it off.

How big is the scale? There are two figures that can help us understand it: one is that a state-owned enterprise group in a western city has a total training budget of 60 million yuan; the other is that a certain platform signed contracts with more than 100,000 learning accounts at a time.

The first-tier to C ecosystem is 10 years ahead of the N-tier to B ecosystem, but the timing is just right.

06

Some people say that Jia Ling overdrawn her future value, while others say that Jia Ling made a gorgeous turn.

The full box office revenue of several films is a real result; getting so many big-name endorsements this season is also a hard result.

When foreign luxury brands choose spokespersons, the core consideration is a certain spiritual consistency.

Many domestic brands (disdain, lack enthusiasm, do not understand, and are unwilling) do this. Once the brand power is superimposed with pragmatic pressure, a sense of (anxiety, a sense of harvest, a sense of earthiness, a sense of clumsiness) is revealed from the inside out, and they are unable to gather energy and strength.

07

Manner's crisis public relations has accelerated the market development of the very narrow track of "public opinion training". As far as I know, there are several teams working on expanding the market.

It is much more reassuring to use anxiety to do some business than to get involved in the gray area.

The vector needs scale, and the entrance needs profit. In this narrow channel where the productivity is less than 250,000, it is a way of survival.

08

Video Account is the hope of the whole village.

Tencent is working slowly and opening up various traffic channels bit by bit. In addition to the video accounts, Moments, official accounts and mini-programs, it has added new platforms and content media as well as Youlianghui, including Tencent News, Tencent Video, QQ Browser, QQ, Tencent Music and games.

When users click on the outer layer of the ad, WeChat is invoked, and the user is redirected to the official landing page. When users click on the components on the landing page, they can enter the live broadcast room. At the same time, they are also optimizing business efficiency.

There is also a "Supernova" category support plan that is worthy of attention. It is expected to help 2,000+ merchants develop the "excellent stores, excellent broadcasts, and excellent investments" layout on Tencent.

After three or four years of planning, Tencent has finally ushered in the era of "account business" and "account advertising", and the fighting spirit revealed within the company feels good.

09

SHEIN officially entered the Korean market, with its official website launched at the end of April. It appointed actress Kim Yoo-jung as the global spokesperson for its brand Dazy and released a related series of new products.

It doesn’t matter which country SHEIN is from or where it is listed. Don’t be too harsh on these things. It is a global company and sooner or later more companies will go global.

The globalized mentality has been locked in the current environment for another 10 years.

10

There is a small group of people around me who have begun to oppose advertising consumption, that is, they give priority to buying brands that resolutely do not advertise, and try to avoid brands that advertise intensively.

It's quite interesting. If you think about it carefully, it seems to make sense.

Diversity is the most fascinating thing about this world.