The author of this article chose to take the development and needs of advertisers and media parties as the main line, and on the basis of overviewing the development history of Internet advertising, he made some simple disassembly.
Internet advertising has become increasingly mature after about 20 years of rapid development, and its journey is interesting.
's understanding of the development of Internet advertising, there are not many articles online, and some articles have been sorted out from different angles:
- From the media platform, there have been PC advertising, mobile advertising, etc.
- From the perspective of business scenarios: there are search advertisements, video advertisements, information flow advertisements, etc.
- From the perspective of trading methods: there have been contract advertising, programmatic advertising, etc.
- From the perspective of billing method: there are CPT, CPM, CPC, etc.
In my opinion, according to the above ideas, it is difficult to perceive some driving forces of the development of the industry. Moreover, the above methods are inevitably intersected in multiple dimensions, which increases the cost of understanding.
I tend to expand on a specific main line to simply portray the changes in the industry. This time I chose to focus on the development and needs of advertisers and media parties. The following text will make some simple disassembly based on the above-mentioned main line based on the overview of the development history of Internet advertising.
1. Overview of the development of Internet advertising
994, the world's first Internet advertising was born. 995 was the enlightenment period for the popularization of the Internet, and it also opened the era of portal advertising. At this stage, the scale of Internet users is limited, advertisers have a weak understanding of the Internet, and not many people try it out. Television, newspapers, radio, outdoors, etc. are still the mainstream media for advertising.Due to the limitations of media characteristics, traffic scale, transaction costs, etc., the traffic at that time was usually sold in packages, and CPM and CPT were the mainstream. The advertising sales consultant determines the advertising location, advertising content, and advertising display time with the customer in advance, and the media displays the advertisement at the corresponding time.
With the development of search engines such as Yahoo, Google , Internet advertising has undergone the first revolutionary change. In 2000, Google launched search adwords, which was billed by CPM in the early days. Adsense and CPC billing methods were also launched two years later.
search engine naturally divides traffic in detail, which can support advertisers to purchase traffic. For example: used car dealers can place search traffic for the words related to "used car". From this stage, precise traffic sales have developed rapidly. After
, in my opinion, the revolutionary changes in the advertising industry come from the birth and development of information flow advertising.
facebook first launched information flow advertisements in 2006. The typical feature of information flow products is that users spend a long time, which is a very good scene for presenting advertisements and reaching users.
It can be said that search advertising and information flow advertising support the entire industry. Typical platforms for search advertising include Google, Baidu , Alibaba Mama , etc. Typical platforms for information flow advertising include Facebook, Toutiao, Tencent social advertising, etc.
2. Taking the development and needs of advertisers and media parties as the main line, we should understand the development of industry
In the 20 years, advertisers and media parties have continued to face some problems, and some core issues have promoted the iteration of the industry.
Problem for advertisers:
- is more willing to pay for the effect than to display it.
- expects to obtain traffic more accurately.
- doesn’t know how to make better delivery decisions.
media party’s problem:
- big media and small media all hope to sell as much traffic as possible.
- media need to improve the monetization efficiency of a single traffic.
- media expects to reduce the transaction costs of the chain.
Based on these problems, the industry has evolved the following:
1. From only supporting exposure billing to selective billing by effect
Early on, it mainly focused on exposure billing such as CPT and CPM. Media represented by search engines first introduced the click-by-click billing. After that, the industry has also launched a method of charging by conversion, including filling in forms, placing orders, downloading, etc.However, since the landing pages of the conversion process are mostly provided and responsible by the media, it is difficult for the media to monitor the conversion data and optimize the conversion efficiency, and there are not many media to launch conversion billing.
At present, the most mainstream billing method for major advertising platforms is still billing by click. It balances the interests of advertisers and media well, allowing advertisers and media to perform their duties to improve advertising effectiveness: the media focuses on giving advertisements more effective clicks, and advertisers are responsible for converting clicks into actual results.
2. A classic problem in the advertising industry is: You know that half of your advertising fee is a waste, but you don’t know which half it is. In the era of TV, newspapers and outdoor advertising, customers choose advertising media and delivery solutions that suit them by understanding the audience characteristics of relevant media. In the early days of the Internet advertising era, there were some limited directional rules, with the choice of regions and channels. The emergence of search engines allows advertisers to choose some search terms to target traffic purchases.
With the continuous collection and accumulation of user basic data and user behavior data by the online platform, it becomes feasible for every Internet user to portray from multiple dimensions. These dimensions not only include population attribute information such as age, gender, and place of origin, but also include more advanced information such as job position, shopping preferences, and interest preferences.
Currently, when serving advertisements on mainstream advertising platforms, advertisers can choose from multiple types of targeting conditions. It is worth noting that the user's data is not only distributed on a single media platform, but on the entire Internet platform. This requires some platforms to integrate various types of data, and data service providers have become an important role. In addition to setting targeting according to population attributes, interest preferences, etc.,
has also supported advertisers to screen or exclude some people based on the interaction between users and their own advertisements to help them better recall users or avoid some invalid exposures.
3. Small media changed from being unable to benefit to being able to obtain advertising revenue
The early traffic sales were relatively coarse, and only large media parties and core advertising spaces were favored by advertisers.
With the development of the industry, more and more small traffic parties emerge. Due to the limited traffic scale, advertisers have high transaction costs for cooperating with these media and are not strong in their willingness to cooperate. However, just looking at the traffic itself, these traffic is actually valuable to advertisers.
In order to deal with this problem, the advertising alliance platform was born. The simple understanding of the advertising alliance is that the platform is responsible for obtaining cooperation opportunities with advertisers, and only then can small media display the advertisements obtained by the platform and share the profits with them. At present, mainstream advertising alliance platforms are mostly attached to big media, such as Baidu and Alibaba Mama. They have natural advantages in acquiring advertisers and providing technical support. Cooperation like
is a win-win situation for all parties:
- major media can acquire customers normally;
- small media can sell their own traffic;
- advertisers can obtain more effective traffic without increasing their transaction costs.
4. From locking some media traffic resources in advance to real-time bidding for multiple media traffic resources in real time
The earliest transaction method for Internet advertising is: advertisers bid in advance, agree with the media party to buy the traffic, and the media party reserves corresponding display opportunities for advertisers. This transaction method does not meet the needs of all parties well.
For advertisers, they expect to have some flexibility in media selection, budget allocation and bidding plans, and also expect to reduce decision-making costs while making purchases as valuable as possible. For media parties, the above method can easily make them miss out on some potential customers who are more willing to pay high prices, and they are also likely to be unable to flexibly adjust their sales strategies in the case of traffic fluctuations. At the same time, small and medium-sized media have difficulty obtaining trading opportunities under the above method.
In the above context, a new trading method has emerged: real-time bidding for . Unlike the traditional method, it regards each traffic as an independent sales unit, which can be sold separately, bid for multiple people, and traded in real time.The real-time bidding implementation of
depends on 4 core modules: SSP, ADX, DSP, and DMP.
- SSP refers to supply side platform: It serves the media party and is responsible for connecting with ADX. Media connected to SSP can initiate an advertisement request when a single traffic arrives in the ad slot and ask ADX whether there is a suitable advertisement to display.
- ADX refers to ad exchange: It serves DSP and SSP and plays a role in connection and matching. After receiving the SSP's request, it passes the ad traffic information to the DSP and asks them for bidding. After the DSP responds, it returns the corresponding advertising ideas and bids.
- DSP refers to demand side platform: It serves advertisers and is responsible for connecting with ADX. Several advertisers submit budgets, creativity, bids, traffic requirements, etc. to the DSP, who are responsible for specific delivery decisions.
- DMP refers to data management platform: It provides data services to help advertisers understand each traffic more accurately and help them make decisions. The flexibility and intelligence of real-time bidding in
can help media parties sell traffic more refinedly and efficiently, and can also allow advertisers to purchase traffic at a lower cost and more precise manner. In addition, real-time bidding can carry a large number of media and advertisers, greatly reducing manual intervention and costs and improving industry efficiency.
5. From unified bidding by traffic to differentiated bidding by traffic
This is a change that has only occurred in recent years, mainly for the scenario of billing by click.
According to the traditional click billing logic, the cost paid by advertisers for each click is roughly similar. Advertisers who pursue results usually calculate costs based on actual conversions such as downloading and filling in forms. Due to the large fluctuation of the actual conversion rate of each click, and the small number of clicks obtained by the customer in a short period of time, the conversion cost converted according to the above billing method is unstable, the customer's cost and budget are not very controllable, and the sense of security is low.
At the same time, since bids are fixed, for traffic with higher conversion rates, customers cannot temporarily adjust bids to compete for opportunities to display ads while controlling the total budget. The birth of
OCPC solved this problem. Its essence is: customers set conversion bids (for example, one download averages 20 yuan). For each traffic, the system can adjust click bids based on the estimated conversion rate, making the conversion cost relatively stable. According to this logic, the system can increase bids for traffic with high estimated conversion rates, and reduce bids for traffic with low estimated conversion rates.
In addition, compared with CPA, CPS, etc., which directly bill for conversions, advertisers are still motivated to optimize click-through rate and conversion rate under the OCPC method, and the media still only need to be responsible for giving customers more appropriate traffic, so that each performs its functions and achieves win-win results.
is written later
This article is just a brief summary, with a relatively single perspective and a choice of content. We will discuss some topics in the future. I hope to use this to give myself more understanding and experience of this industry. If some readers can also benefit, that would be great.
Due to the limitations of accumulation, the content is inevitably one-sided and even errors are made. Everyone is welcome to leave a message to correct and communicate.
Author: Uncle Shan
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