Internet Profit Model Workshop NOTE 1: Traffic flow

Intermediary transaction SEO diagnosis Taobao guest Cloud host technology Hall

When I was a literary youth, I once had a desire to find a quiet city, or a quiet street in a busy city, where I opened a coffee shop. I and my (especially often overtime to stay up late) friends exchanged this idea, surprised to find that everyone seems to have a similar "wish", but some open coffee shops, there are open bookstores, tea shops, toy stores and so on.

A common feature of such aspirations is that basically no one finally realizes it, most of the time, just talking. Perhaps, at that time as a literary youth, we can only see the romantic side of the coffee shop, but do not know the hardships behind it.

Recently read about it technology history, books and articles such as consumer behavior and economic history are increasingly felt that sometimes our work-design, development, operation, etc.-is like opening a coffee shop, in addition to the joy of immersion in experience, the overcoming of difficulties, the growth of data, Maybe sometimes we should just jump out of it and focus on what's more essential to a business company. Understand this kind of thing, perhaps will really be able to open the coffee shop in the future.

Nowadays, the internet has infiltrated many ordinary people's life like water and electricity, but the internet is still a new thing from the development of the whole industrial civilization. About the profit model of the Internet, summed up, the category is more clear. After this time, I intend to use my own understanding and classification of ways to try to discuss the Internet in the common profit model. Now this is the first article--the flow-changing model.

With regard to flow, we can easily understand its value in our daily life. For example, if you want to open a shoe store, in the premise of reasonable rent, you will usually choose the bustling commercial Street; you want to sell eggs and cake, you can afford protection fees, you will generally choose residential Gate, subway station export, or office-intensive areas. The reason is simple because there are so many people passing by and these people, many of them with demand, are likely to produce buying behavior.

On the other hand, have you noticed such details as: Many supermarkets, if it has 2 floors, the entrance is generally on the 2 floor, if it is 3 floors, the entrance is ten to 3, and their exports, no accident, will certainly be in the 1 layer. The purpose of this setting is obviously to allow you to stay in the supermarket more. In other words, supermarket operators believe that the longer you stay in a supermarket, the more likely you are to buy more.

Ikea, the famous home store, is said to have used such strategies to boost sales. The so-called "since ancient times Ikea a road", there are reports that once you enter the Ikea mall, you basically have to go through the whole process to come out (there are some fast access, but particularly hidden). Ikea relies on the "let the customer get lost" way to make more orders, so that "there are up to 60% of the purchase, not the customer originally wanted to buy the list." (which was later exposed by the media and is said to have changed.) http://finance.qq.com/a/20110513/001724.htm)

These examples illustrate a fundamental fact: traffic is an important factor in generating consumption. Generally speaking, the larger the flow, the more consumption may be generated.

In Internet products, the virtual traffic into the real revenue, is also a basis for the profit model. This model has several specific landing plans:

1, Banner Advertising (typical cases: portal site)

Advertising may be the most common form of profit on the Internet. In Sina, Tencent Network and other portals, we often can see a variety of banner ads, such as SINA le Habitat, soufun and other unscrupulous real estate portal above, it is advertising flying, sometimes occupy most of your screen space. The principle of this kind of advertising is that the profit way with subway station, street billboard is essentially no different.

Above: SouFun Home ads

2, matching ads (typical cases: Google search, Taobao through train)

Compared with television advertising, outdoor advertising and other ways, the advantage of the Internet is that it can interact with users. Thus, the Internet-specific matching ads were born. Google's keyword ads are a form of matching advertising, which forms the main source of revenue for Google.

Traditional media advertising on the audience's ability to distinguish between the poor, for example, if you advertise on TV, you are generally not quite sure what people see in your ads and whether they need to buy the goods you advertise (if they are not interested in your product, then advertising is a nuisance for them), As for the actual effect of advertising, it is not easy to measure. But when we use search engines to search for information, we entered the keyword corresponding must be I am interested in, want to find content, at this time, if the corresponding promotion according to the keyword matching content, will greatly improve the conversion rate.

Above: Search "Shenzhen English Training", Google gives some accurate advertising information.

Google's search advertising is generally based on the CPC (costs per click, the price each time), that is, show free, produce a valid click will be charged. In Google's results page, the number of ads is limited, when there are multiple ads competing for the same advertising, Google will be the ads themselves by some of the attributes of the ranking, an important basis for the ranking is the advertising bid. That is, under the same conditions, the more willing to spend the price of advertising, is displayed in the results page of the greater the probability, so that the probability of effective clicks is greater. This mechanism amplifies the profitability of keyword matching ads.

Another important application of matching ads is on the website of the Electronic Business platform.

Just imagine, if I entered the "Australian visa" in Google this keyword, my purpose may be to see some about the application of Australian visa strategy, attention, etc., after reading their own run the embassy. If Google offers me a bunch of travel agency visa Services, it's pointless for me.

But on Taobao, the purpose of using search is much clearer. If I search on Taobao "Australian visa" this keyword, I can not be to find the introduction, must be to spend money to do visa. This scenario offers a much higher conversion rate for matching ads.

Above: In Taobao search "Australian visa", the results page on the right-hand side will show a column called "Shopkeeper Hot" area, this is the Taobao through train (http://pro.taobao.com/zhitongche/) to promote the results of the exhibition area. Its mechanism is similar to Google's search ads, bidding rankings, CPC pay. It is said that through-train advertising has become the main source of income Taobao.

3, social advertising (typical cases: Facebook, wide-point)

In real life, whether we buy the same goods, there will be many factors, one of the important factors is "others recommended." If the combination of advertising and social elements, sometimes have some unexpected effect. This kind of promotion way, is not very mature at present, many companies are still exploring, more representative, I think it should be Facebook.

Image above: Facebook sidebar ads

For Facebook, sidebar advertising is an important source of revenue, and its underlying delivery, presentation, and billing patterns differ little from ordinary bidding ads, but Facebook adds a variety of social elements to the ads. For example, in the image above, there is a line of words "12,717 arranges like this" underneath the ad content. Generally we will feel that there are many people recommended, used products or services, certainly not bad, Facebook like function combined with advertising, very good grasp of the people's herd mentality, narrowing the gap between the audience and advertising.

Not only that, Facebook, as a social networking site, its ads point to the page is often not a simple product introduction, but similar to the page, activities and other marketing operations, so that users are more likely to interact with the "ad". Once the interaction has been generated, in addition to the user itself to play a promotional role, but also may trigger the feed mechanism to produce a feed. Imagine, the same is the advertising message, one is cold on the page, and the other is your friend generated, its content can be interactive, and next to the name of friends and Avatar, is not more "trustworthy" it?

In addition, users often leave more accurate and detailed personal information on social networking sites. Web sites can use this information to subdivide users so that more accurate advertising can be achieved.

Image above: In the Tencent wide-point access system, the advertising audience can be accurate orientation, only let your target users see your ads

(for the section on advertising with social elements, I intend to discuss it in more detail in a later article, "Closer to the reality of social product design 2--social recommendations and social ads".) )

4, traffic distribution (typical cases: navigation sites, various "Internet access")

In addition to advertising, direct traffic to some sites, is also a good way to make money. Domestic most classic case, should be the navigation website hao123.

Hao123 's profit model is very simple, the first use of its unique positioning and operation, to obtain a large number of traffic. Then, distribute the traffic to various websites and charge the website.

The premise of traffic distribution is to obtain traffic. Therefore, the contention for the user's access to the Internet has become the premise of such a profit model. Search engine is a very important portal, the browser start page is also, if not enough, it is necessary to put the entrance before the installation of their own software directly on the user's computer.

Remember that year, a variety of "tomato garden version of Windows XP", "Rain forest wind version of Windows XP," the era of the big line? In the Internet is not particularly developed era, the domestic pirated software is the main means of hosting or CD-ROM. That period, a lot of domestic piracy system Packaging group, you recall that you installed these pirated systems, is it sometimes "brought" Sogou Input method? IE Start Page is automatically set to hao123? (Do you now understand why so many enthusiastic people are willing to "free" to make system installation disks?) Perhaps you also understand, why Jifeng online there are so many "enthusiastic people" to publish a variety of "landscaping version" of the ROM. But this is not absolute, a group of people are really enthusiastic. These are competing for users ' access to the Internet to facilitate interception to traffic.

360 browsers are the way.

Above: 360 browsers In fact includes a variety of profit models, but its basis, are traffic distribution. And because the entrance is sufficient, even companies like Google need to buy their traffic.

Summary: Typical closed loop of flow pattern

The logic of the flow-changing mode is to get a lot of traffic first, then make money by advertising, traffic distribution and so on. We take 360 as an example to illustrate the typical closed loop of this pattern.

First of all, the premise is that the domestic computer users generally technical level is not high, the network environment is relatively bad.

Second, 360 through the means of free (the year rising how also think impassability, antivirus software free?) And the concept of "security", with "360 Security guards", "360 antivirus" and other products accumulated a large number of users, access to a strong Internet access, and its entrance enough to the front (directly installed on the user's computer, and resident).

These users then generate a lot of traffic, 360 of them to 360 of browsers and other products (built-in navigation sites), and then profit through advertising and traffic distribution links.

Finally, add to the common domestic use of the "flow of cash mode" profit, or to assist other products to profit from Internet products:

--Baidu Search advertising, network Alliance advertising

--Where to find the ads (many destinations)

--hao123 Navigation website

--360 browsers and various browsers

--pea pods, 91 assistants and other mobile phone management software

--Jifeng Market and other Android Market

--All kinds of Android ROM

And so on.