Some fragmented thoughts on the Internet and the marketing industry

Working in the Internet and marketing industry requires observation of the industry and reflection on the current situation. As a practitioner, the author of this article records his views and suggestions on the Internet and marketing industries accumulated in his work and daily thinking, hoping to inspire you.

This month, due to the epidemic and other factors, I have not been able to muster the energy to write long articles, but I have updated some content in the Knowledge Planet and will continue to update in the future. Today, I will share some recent content:

01

As soon as Ma Huateng's internal speech came out today, it was circulated throughout the Internet circle. Regardless of whether it was leaked intentionally or not, it showed a statement from Tencent. For a long time, Tencent has lived a comfortable life relying on social networking and investment, and it can be said that it makes easy money. As we all know, the most comfortable and "humane" company among the Internet giants is Tencent, which is extremely suitable for retirement. But the emergence of short videos has left Tencent empty-handed, and the restrictions on game versions have also made Tencent a little anxious.

It can be said that Tencent has finally become pragmatic, and Tencent is indeed experiencing a more difficult war——

There is currently no blockbuster game that can become the next super cash cow; short videos are strongly suppressed by TikTok, and although the video account is large in size, its development can be described as bumpy, and live streaming with goods is still in the very early stages; 2B enterprise services and industrial Internet are even tougher nuts to crack, and we need to be prepared for a protracted war. At the same time, it is not as easy to make money from 2B business as 2C business, and there are often claims in the market that Tencent does not have 2B genes.

Judging from Ma Huateng’s remarks, the video account will have big moves and operations next year, and there may be considerable dividends to be tapped. From the perspective of brand marketing, it is recommended that every brand start to deploy the video account, or at least try to understand the gameplay in advance.

02

In the past, the main concept of Douyin e-commerce was called "interest e-commerce", because e-commerce consumption was mainly driven by interest content in short videos and live broadcasts, but now Douyin e-commerce has also begun to talk about the concept of global e-commerce and has added traditional shelf e-commerce sections to its products. An important reason behind this is probably that the ceiling of the so-called interest e-commerce has appeared. If Douyin hopes to further develop and expand its e-commerce sector, it needs to introduce the shelf e-commerce model. Now Douyin e-commerce is called "global interest e-commerce".

In the past, the story told by "interest e-commerce" was that anchors and creators achieved the reconstruction of "people, goods, and places". Through the live broadcast room, user needs and goods were matched more efficiently, and the intuitive presentation form of live broadcast and short video could more effectively convey product selling points.

However, under the "interest e-commerce" model, merchants only use Douyin as a sales channel rather than a business base. When merchants use live e-commerce to sell goods, they cannot accumulate their own private domain traffic. Similarly, users' consumption motivation is not because of brands and products, but the recommendations of KOL anchors. In other words, "interest e-commerce" actually deconstructs the "brand" thing, making the brand no longer important.

This is actually something that both merchants and platforms want to avoid, so re-realizing "branding" has become the focus of platforms such as Douyin, such as helping companies establish private domain traffic, supporting companies to achieve self-broadcasting, and helping companies establish brand-identified shelf e-commerce stores.

At present, the difficulty and challenges of Douyin's efforts in "shelf e-commerce" are enormous. This area is also the advantage area of ​​Taobao and JD.com. The high-growth era of Douyin e-commerce may have passed.

03

The people who understand brand building best are actually no longer in advertising companies. We roughly took stock of the project businesses of the advertising companies around us and found that the basic demand of brands in looking for advertising companies and marketing companies is actually creative promotion, which is what we call campaign, rather than brand building. There is an essential difference between the two.

For example, Procter & Gamble finds an advertising company to do a project. Whether it is celebrity endorsement or social media communication, the success of these campaigns has little to do with the brand value. It is a purely communication-oriented thing. P&G's brand value will not increase suddenly because of a good campaign, nor will its brand be damaged because of a bad campaign.

Behind the “campaignization” of advertising and marketing projects is the continuous segmentation of communication techniques in the advertising and marketing industry, which traps advertising companies in “techniques” and gives them less and less opportunities to manage the entire brand strategy.

In the past, companies such as Ogilvy and others have accompanied the growth of a large number of brands and provided brand building methodologies during the brand growth process. However, nowadays, fewer and fewer advertising companies can grow together with a certain enterprise, and instead continue to develop their own advantageous business areas.

One of the reasons is that brand positioning and brand building strategies are more important and urgent for small companies, start-ups, and emerging companies, and these projects are difficult to meet the financial cost model of large advertising companies. Therefore, we can also find that companies that do brand positioning and strategic consulting are often "personal studio" companies, and their founders usually have obvious IP attributes.

In short, campaigning is not branding, and communication is not branding. Communication and campaigning are the work of the marketing department, while branding is the work of the CEO. Most advertising companies no longer understand how to build a brand, and have actually lost the ability to communicate with the CEO.

04

Let’s talk briefly about coffee.

It is said that Luckin Coffee has promoted the "coffee-milk tea" trend. In the past, coffee was a category where classic single products were king. Classic flavors such as Americano and latte continued to be popular with users, but Luckin Coffee has continuously carried out some innovative research and development on coffee flavors, and has also continuously launched some best-selling products in stores.

In other words, the public has begun to demand diversified flavors of coffee, which also means that coffee products have become somewhat separated from Western culture and American culture, while also allowing ordinary coffee users (rather than professional coffee users) to experience a variety of new flavors.

Therefore, we believe that the most outstanding contribution of a large number of coffee brands represented by Luckin Coffee is actually to explore a Chinese coffee consumption path, allowing freshly ground coffee to enter the lives of more people.

On the other hand, as coffee consumption gradually penetrates, coffee has also become a social product, and more and more brands are trying to cross over to the coffee business. Not to mention convenience store brands such as Bianlifeng and 711, even brands such as China Post, Sinopec, Li Ning, Philips, etc. have begun to make coffee and coffee shops, and luxury brands such as LV and Ralph Lauren have also opened coffee shops around the world. So why are these consumer brands making coffee?

Coffee is indeed a product that can be standardized more easily. Unlike products such as fruit tea, it does not require manual peeling and core removal. The raw materials are diverse and there are stronger time requirements for fresh fruit ingredients.

In this sense, it is a relatively light investment for a brand to cross over into the coffee business, as the supply chain is very mature. In addition, coffee can indeed enhance some of the brand's experiences and feelings, and has a certain display effect. At the very least, it will not reduce the user's impression of the brand, and it is also very much in line with the lifestyle of the current middle-class and young users. At the same time, coffee is a global product language, unlike new tea drinks which are still mainly confined to the domestic market. It actually has a certain enabling effect on the internationalization of the brand.

Competition in the current coffee market is already very fierce, but the overall industry landscape is not expected to change significantly. Luckin Coffee and Starbucks' positions in high-tier cities are difficult to shake. There are many brands eyeing the sinking market, such as Lucky Coffee, Luckin Coffee, and Heytea, but it will take some time to popularize coffee education in the sinking market. At the same time, more and more companies are crossing borders to participate in the coffee market.

We believe that leading coffee brands will need to find new growth curves beyond coffee products in the future, such as light meal consumption, while cross-border coffee brands will rely more on their own channels and store advantages to get a piece of the pie, and essentially still serve to attract traffic to their main business.

05

From today's perspective, the problem with Bilibili is that it made a wrong strategic choice, which was to weaken the investment in the gaming business in order to obtain the support of a high valuation in the capital market. In fact, Bilibili's ambition is well known, and Chen Rui does not want Bilibili to be just a small country with few people, but must move towards becoming bigger and stronger.

But the problem is that Bilibili has a very weak commercial foundation. Whether from the perspective of the community, streaming media, or big entertainment, it is unstable and immature in commercialization. In addition, Bilibili was in an expansion period of growth and breakthrough in the past two years, and it needs to use a lot of funds and ammunition to complete the ecological layout and construction. So where do these funds and ammunition come from?

There were probably two options at the time: first, to generate revenue from its own business and then transfuse it into ecological construction and strategic layout. The business that could bring in cash flow and profits was obviously games at the time. But what B Station might mind is that its game content is concentrated in the field of the second dimension, which is inconsistent with the direction of breaking the circle. After all, B Station’s later communication caliber has become "a learning website."

The second option is to replenish ammunition through the capital market. This option is incompatible with the first option, because if the revenue share of the gaming business is too high, the capital market will regard Bilibili as a gaming company rather than a platform ecosystem company. In order to tell a bigger story, support a higher valuation, and replenish ammunition for ecosystem construction, Bilibili has begun a de-gaming strategy.

But the capital market is volatile, and Mr. Market's mood fluctuates every day. Coupled with a series of problems with Chinese stocks listed in the United States, even if Bilibili tells a big story about young people, Generation Z, and content ecological platforms, it still cannot escape the macro trend, resulting in its current relative passivity.

At present, de-gaming is not a good choice. In our opinion, Chen Rui has essentially chosen to play with the capital market instead of pragmatically developing cash cow businesses. If Bilibili had insisted on investing deeply in two-dimensional games, it would not be impossible for Bilibili to make a game like "Genshin Impact".

06

With the relaxation of prevention and control policies, consumption will undoubtedly gradually pick up, but we believe that the speed of recovery is still lagging behind the relaxation of prevention and control policies. The public's conservative and cautious attitude towards black swan events may not quickly switch to the wave of consumerism. In other words, even if prevention and control are relaxed, the public will continue to be in the inertia of saving consumption expenses for a period of time. Unless the economy has a clear trend of recovery, the impact on consumption in the short term is optimistic. Coupled with the inconvenience caused by the continuous infection of the public in recent times, the consumption potential after the epidemic will be released slowly.

The meeting held a while ago showed that the country will adopt a proactive fiscal policy and a prudent monetary policy. According to the law of economic recovery, the consumer industry will recover after the cyclical industry. Therefore, we also expect that consumption will peak around the second quarter of next year. For example, second-quarter marketing nodes such as Girls' Day may become more important, and the second quarter will also become a key point in brand market competition.

07

Many brands are now worried about the rising cost of traffic. We usually divide traffic into public domain and private domain.

The high public domain traffic is mainly reflected in performance advertising such as information flow and live broadcasting experts. It has entered a very competitive state. Especially in the past two years, the overall environment has been bad. Brands will focus more on performance advertising, which has further aggravated the increase in performance channel traffic costs.

Private domain traffic is generally considered to be a reusable, low-cost method, such as WeChat groups, enterprise WeChat sedimentation conversion, etc., but at present, it has also gradually passed the bonus period. Many brands have found that the establishment of a private domain traffic model requires investment, and the marginal effect is decreasing. If we look at it from the user side, various WeChat groups have flooded users' mobile phones, which has caused a certain marketing immunity. The WeChat group folding function has further strengthened this point. In addition, the WeChat group folding function actually amplifies the role of the brand. When users think of a certain brand, they will open the group folding menu to search for it in a targeted manner, guiding the competition of operations to brand competition. In short, it is not easy for enterprises to do private domain. Not only do they need to form linkages with brands and public domains, but they also face the pressure of declining results.

So where is the new blue ocean of traffic?

We believe that it is still in the public domain, but this public domain does not refer to traditional information flow or social media advertising, but to IP. The IP I am talking about does not only refer to content IP (such as Pokémon, Disney, etc.), but also includes brand IP (such as Heytea, Santonban, etc.).

IP marketing has developed very rapidly in recent years, and more and more companies are setting up separate IP marketing and procurement teams.

IP marketing is actually a bit like the KOLKOC bonus of the past. For brands, discovering high-quality and suitable IPs for marketing will bring about topic effects on the one hand, and sales conversions on the other.

Of course, since there are actually so many IP choices, we recommend that brands listen to the advice of professional service agencies and not always focus on the top IPs. The bigger the IP, the more it can meet marketing goals. Large IPs are also very expensive. We believe that we can focus on mid-level or even vertical IPs. Of course, this also depends on the brand's own communication budget.

For advertising companies, it will be easier to join the IP marketing service providers of large brands, with less competition and less resistance to business expansion.

Author: Zheng Zhuoran, WeChat public account: Spreading Gymnastics (ID: chuanboticao)