With the development of the Internet today, the rich user use scenarios have also greatly enriched the profit model of Internet products. Even entrepreneurs and venture capitalists do not bother to talk about "profit" too early, but are willing to trade time for scale, and then hope for large-scale profit. However, the practice shows that advertising is still the most profitable model. The beauty of advertising is that it does not charge directly, but builds a platform for consumers (users) and manufacturers (advertisers) to discover each other, and it can earn money just by providing Internet services. Globally, the main profit model of Google, Facebook, Ali and Baidu is advertising, while the profitability of these giants, such as e-commerce, games, value-added services, and paid use, is not stable.

In my opinion, the arrival of advertisements in the circle of friends may mean that the information flow advertisements have broken out, or to be exact, in China. The information flow advertising is not a new thing. The domestic microblog began to try as early as two years ago. As an important form of mobile advertising, the information flow advertising joined the camp this time, which certainly indicates that the advertising model that has ignited Facebook and Twitter in the United States is about to break out in China.

Mobile advertising market explodes

According to the prediction released by the famous market research company eMarketer in December last year, there will be more than 150 billion dollars of advertising revenue growth worldwide in 2018, of which 118 billion dollars will come from mobile advertising, which is consistent with the background that the use of mobile devices exceeds that of PC devices. In the mobile advertising market, information flow advertising has become the mainstream. The mobile screen is inherently small, so it is better to display information flow advertising directly than display display advertising and Banner advertising on the PC side. The latter is more consistent with the user experience, so mobile social products including Facebook, Twitter, Pinterest, and Instagram have launched information flow advertising, Of course, the premise is that you must have a "stream" to carry advertising. Theoretically, search, news and other forms can also carry this form of advertising. Therefore, information flow advertising is definitely the leading role in the online advertising market in the next few years, and Facebook, Twitter, microblog, WeChat circle of friends, etc. will benefit from this.

Why does the domestic information flow advertising break out

The scale of Facebook and Twitter in the mobile advertising market has exceeded that of streaming PC, and one of the important reasons is the success of information streaming advertising. Taking Facebook as an example, it began to test mobile advertising in the second quarter of 2012. After Q3 of 2013, the scale of mobile advertising revenue exceeded that of the PC terminal. (See the figure below) Facebook's mobile ads are mainly information flow ads, including content promotion, interactive promotion, coupon promotion, video promotion, etc. But why did the domestic information flow advertising market break out more than a year later than the United States. I think the reasons are as follows:

From the perspective of market penetration, the development of domestic mobile Internet is slower than that of the United States: although there are a large number of low-cost smart machine manufacturers in China, the penetration rate of mobile terminals is high, but the user use scenarios are single, making the corresponding mobile advertising market develop slower than that of the United States.

Mobile social networking has gradually become mainstream: compared with IM, SNS is a better mobile advertising carrier. Facebook and Twitter have long established their social status in the United States. The outbreak of information flow advertising has directly narrowed the gap between Facebook and Google in online advertising share. but In China, IM (QQ) was the first monopoly. Later, it experienced the rise of social networking sites such as Space, Happy, Renren, Weibo, and WeChat (circle of friends). Mobile advertising in the IM dominated market is difficult to launch. Until the status of Weibo and WeChat (circle of friends) has stabilized in the past two years, mobile social networking has really become the mainstream. Compared with traditional online advertising, information flow advertising is more suitable for mobile social networking, which can accurately show the real characteristics of a user. This gives information flow advertising higher accuracy. Another reason is that the convenience of mobile search experience is not as convenient as PC search, which makes its use scenarios fragmented (replaced by various vertical searches). Comprehensive reasons, Information flow advertising naturally fits in with mobile social communication.

Market acceptance is increasingly widespread: compared with China, American advertisers are more mature. In the Yahoo era, American enterprises have the concept of Internet economy, and they have a marketing department dedicated to online advertising. This period of time is seen in China, which is the golden age of portal advertising that we are familiar with. With the development of mobile Internet, more and more advertisers are aware that display ads and TVC ads cannot more accurately cover their target groups. On the one hand, the traditional Internet advertising model cannot meet the growing appetite and needs of advertisers, on the other hand, it is also gradually unable to form more efficient interaction and connection with users' access channels, more accurate The emergence of mobile information stream advertisements that are highly interactive and conform to users' usage habits has made Chinese advertisers gradually turn their eyes to them. Advertisers are becoming more mature and their market acceptance is becoming more in-depth and extensive.

The level of advertising marketing is also improving: China's traditional online advertising is almost hard and broad, but in recent years, a large number of excellent advertising copy has appeared, such as Durex's microblog advertising, and users are willing to take the initiative to see it, which makes users more receptive to information flow advertising.

The improvement of big data mining level: the purpose of information flow advertising is to bring revenue to advertisers with minimal impact on users, which requires high precision matching of advertising. The progress of big data mining level of domestic companies objectively improves the feasibility of stream information flow advertising.

That is to say, from three aspects of advertisers, Internet platforms and users, China has the premise for the outbreak of streaming information advertising.

Return to China, The biggest beneficiaries of information flow advertising are the QQ space and circle of friends of Weibo and Tencent In particular, the number and quality of users covered by microblog and circle of friends are naturally suitable for information flow advertising. According to the 2014 Q3 financial report of Weibo, its MAU was 167 million, and that of WeChat exceeded 400 million in Q3 2014. Behind the huge user scale is the potential of information flow advertising.

Weibo&WeChat Circle of Friends Welcomes Opportunities

Once the information flow advertisement breaks out, the platform that can carry the information flow advertisement will benefit, and Weibo and WeChat are the most direct beneficiaries. Before that, Tencent had put WeChat's profit method on mobile games, but it soon fell into the dilemma that the frequency of game release was inversely proportional to the user's attention. With the exit of light games represented by cards in 2014, mobile games became increasingly heavy and the role of channels began to weaken, This can be clearly seen in Tencent's last quarter financial report that the game seems to have hit the ceiling of growth. Weibo has been distributing information flow advertising since 2012, and then successively launched fan headlines, fan links, brand express and other products to enrich the information flow advertising product line. For the moment, no matter how effective WeChat and Weibo have been in exploring ways of making profits, it is a waste of cash that a large amount of traffic has not been used for information flow advertising, and other profit paths are complicated. Therefore, this WeChat entry into the information flow advertising market is absolutely positive for the entire mobile advertising market.

The opportunity is in front of us, but the form is different. Weibo is a social platform that gathers friends, star information, news information, and a collection of jokes. Its advertisers can be big brands, small and medium-sized enterprises, or individuals (such as star fan headlines). However, WeChat users have more simple relationships and are more sensitive to information, so advertisers may be mainly local luxury brand customers at the initial stage. Of course, there is no difference between good and bad. The former targets more advertisers, while the latter has a relatively higher customer price. In short, information advertising is a common opportunity for entrepreneurs including mobile social networking, mobile search and mobile information.

In recent years, the industry seems to have a fear of advertising. It turns pale when talking about advertising, for fear of damaging the user's experience. It can be said that they love and hate it. Even microblog, WeChat, etc. are obsessed with exploring other profit models. In fact, there is no need to talk about business. Since the ultimate goal is to make profits, it is better to bravely accept advertisements and then work hard on accurate advertising. This is the king's way. I think it's a good thing that the information flow advertisement has come. With the income of microblog and WeChat increasing, maybe we can put down the sword of Damocles and start to make products seriously.