How can 2 billion yuan become 1.9 billion yuan?
On December 13th, an investigation report published by Analysys International in the apparel industry online advertisement showed that the total advertising price of the online advertising apparel company Espresso 2009 was 1.896 billion yuan.
A newly-emerged enterprise that “sells and sells clothes on the Internet†has been so generous. According to this data, Vanke’s advertising has even surpassed many big companies in the impression, such as the three major operators.
On the evening of December 14th, in the face of reporters' questions, Vanke CEO Chen Jin revealed to reporters: “Our investment in this year is only 200 million yuan.â€
Behind the two different data, a new marketing model called CPS emerged.
Vanke's 200 million and 1.9 billion
Whether it is a veteran worm, or a newcomer who has just touched the net, it is almost impossible to find a person who has never been exposed to Vanke Eslite advertisements. An insider lamented that no matter how large a portal website is, or an unknown vertical portal or a niche website, how can a guest website be so pervasive?
In the garment industry where we are located, we all know that online advertising is not only huge, but also the advertising unit price is extremely low. However, because the parties have been reluctant to disclose detailed data, the industry has only an intuitive understanding of this, and lack of specific The basis.
The above research report recently disclosed by Analysys International revealed the tip of the iceberg. Some insiders told reporters that the gap between the 1.9 billion yuan announced by Analysys International and the 200 million yuan in old age is partly due to differences in statistical standards. Whereas Eslite provides actual investment funds, the statistics of Analysys International are based on the publication price. Analyst Tang Yizhi of Analysys International told the reporter that the statistical method of Analysys International was to multiply the length of time of the Vancom ads displayed on each website by the unit price of display ads.
Of course, the gap may not be that big. An Yongsheng, Marketing Director of Daqi Group, told reporters that there is a 3 to 5 percent discount between the online advertising publication price and the actual price, that is to say, an edition of 1.896 billion yuan is usually paid for between 1 billion and 1.3 billion yuan. Even so, Vanke also used 200 million yuan to get more than 1 billion yuan of display advertising.
The answer lies in the fact that Vanke's advertisements are not simply display advertisements, but are settled according to the CPS. It is CPS that allows customers to use more than 200 million yuan in exchange for the equivalent of more than 10 billion yuan of display opportunities.
CPS (Cost Per Sale) means that advertisers do not pay according to the time the ad is displayed. Instead, they are divided according to the direct sales brought by the ad. Its advertising price is directly linked to each single sale, and its fineness can reach the level of bacteria.
In terms of specific customers, only users browsing web pages with Fanke advertising have become interested in the advertisements of customers. Clicking into the website of Vanke and having a purchase on the website will allow the customer to take charge. Otherwise, if there are no sales records, even if the website displays all customer ads for 365 days a year, it will not receive revenue.
Hong Bo, an internet observer and five-year consulting partner, told reporters that Vanke's internet advertising strategy reminded him of another former online clothing giant PPG. Prior to 2008, PPG's market was better than Vanke's. It devoted too much advertising costs to television and print media. However, due to the lack of effective evaluation methods, the sales conversion rate is actually very low. This is PPG. One of the important reasons to get into trouble.
“While all of the customers have invested a lot of money in advertising, advertising can bring sales to avoid the end of PPG. At the same time, where customers do their own brand of clothing business, the gross profit rate is higher than other B2C companies that only sell. To be much higher, let it avoid the line of the United States, Suning, as well as online Dangdang, Jingdong as the dependence on large-scale cash flow.†Hong Bo said.
It is because of CPS's low-cost, high-efficiency online advertising publishing model that allows Vanke's unique online advertising arrival rate. This summer, at a press conference, Chen Nian proudly stated that Vanke's advertising has occupied most of the valuable website platforms on the Internet. Even if he wants to increase the amount of advertising, there is no good platform.
Apparel collective emulation
Due to the demonstration role of Vanke, other apparel companies are collectively emulating the trend.
According to the reporter's understanding, since the second half of this year, the advertisers in the apparel industry on the Internet have quietly increased. As he gradually realized the success of Vanke's advertising marketing, many competitors who did not step into Internet advertising were suddenly killed. Although Aged said that so far, where passengers will continue to invest heavily in Internet advertising, but nowadays people open the page will find that in addition to Vanke, Dream Bazaar, McCaw and other clothing brands in the Internet exposure is also more The more you come.
For the field of Internet marketing, Dream Bazaar, McCaw and so on are relatively unfamiliar companies. Previously, they were mainly focused on the distribution of catalogues and mail order sales, with little regard for online marketing.
This trend has also been corroborated by Analysys International's above research report. According to the report, in 2008, Dream Bazaar's advertisements for the Internet were calculated at a price of less than 40,000 yuan, but in 2009 they increased sharply to 460 million yuan, an increase of 10,000 times. In the middle of this year, Mecoxlane announced that it will invest 100 million yuan in online marketing in the coming year.
Pu Sijie, general manager of McCawley’s e-commerce division, told reporters that McCawline’s relationship with the Internet has an interesting relationship with Vanke. In August of this year, Mecoxlane filed a lawsuit against Vanke who used its brands “Mecoxlane†and “Meganet†to smuggle keyword advertisements. That is, searching for these keywords in Baidu, the first thing that jumped out was the website of Vanke.
According to reports, in order to explore the advertising investment model on the Internet, Mecoxlane also made technical changes to the website for CPS billing.
“The second half of 2009 was an exploration period. We have already found a model for CPS advertising. In the first half of 2010, the effectiveness of Mecoxlane's online advertising campaign will become more apparent,†Pu Sijie told reporters.
He has no comment on the effectiveness of online advertising. Since it launched online advertising in August this year, its share of online sales has increased from 28% to 35% of its sales, and will soon exceed 40%. In 2008, Mecoxlane’s network sales were 223 million yuan, and this year it will reach 380 million to 400 million yuan.
In addition, Porsche also provided an interesting figure: Compared with the degree of sales that ordinary ads can't directly measure, even if the brand effect caused by advertising is not calculated, the input-output ratio of McCormlin's advertising is about 1.9. To 2.2. That is to say, the return from one dollar investment in advertising is about two dollars, which is a relatively high level in the industry. Pusse said that due to the improved data in the back office, McCawley can monitor costs at any time and adjust advertising strategies to maximize benefits.
With the follow-up of various companies, the sales of CPS, the apparel industry, has gradually spread.
CPS mode worry
Inadvertently, the CPS model allowed the apparel industry to find a way to maximize the effectiveness of advertising investment, and this also contributed to the collective prosperity of the apparel industry.
It is also worth pointing out that before the Internet advertising has the advantage of assessable results, but mostly for the effect of pay, pay per flow, pay per click. Whereas passengers have introduced similar models into physical trading, and the CPS model is more stringent, requiring real sales to be divided into shares.
However, can the experience of the CPS model be further promoted or migrated to more industries?
Due to the effectiveness of the CPS, the website revenue of the advertisers was low. At the same time, because in the CPS model, the sales platform is in the hands of advertisers, and websites that advertise do not have the right to speak, the site's attitude towards CPS and other accurate billing advertisements is complicated and intriguing.
It is also for these reasons that at present, online advertisements billed in the CPS mode are mainly applied to small and medium-sized websites, and large-scale websites do not feel bad about this. An Yongsheng told reporters that using the four major portal websites as examples, they were reluctant to do CPS advertisements because they could not sell ads.
“On the one hand, CPS is effective for advertisers, but it lowers the advertising revenue of the website; on the other hand, CPS advertising means that advertisers must have an objective transaction system that is recognized by both parties, and it can accurately reflect the amount of transactions. In the case of integrity and technical issues are not completely resolved, it is difficult for the website party to have the incentive to try it,†said An Yongsheng.
According to his predictions, Vanke also uses multiple models in advertising. In addition to the main CPS model, brand advertisers have also invested in branded websites, forming a set of advertising marketing strategies. Of course, this has not been confirmed by all customers.
Hong Bo believes that where passengers can succeed on the CPS, there is an important factor, because it has a higher gross profit margin and can pay a higher unit transaction advertising cost, that is, each successful transaction is allocated to The higher commission of the website allows the website to have more reasonable advertising revenue.
Even so, some small and medium-sized website alliances have no shortage of complaints about the way of advertising. According to industry sources, the domestic advertising alliance often complains about the harshness of Vanke's ads. Only in the absence of advertisers can they accept the CPS method. The most fundamental reason is that any form of advertising that can accurately measure the effect will unceremoniously squeeze out the water of the current online advertising industry, and make the input-output ratio more transparent. In the long run, this will make online advertising relatively traditional. Media advertising is more attractive, but in the short term, it comes at the cost of a temporary decrease in advertising revenue for Internet companies.