Tencent Biography 1998-2016: Evolution of Chinese Internet Companies

Chapter 12 Advertising: The Counterattack of Social Platforms
To determine competitive advantage, it is necessary to define a firm's value chain for competition in a particular industry.

--Michael Porter (Professor at Harvard Business School), Competitive Advantage

Every time some people fail while others succeed in finding a solution.

——Liu Shengyi
traffic victory
"Do you think Tencent's advertising can surpass Sina's?" Ma Huateng asked Liu Shengyi while eating Cantonese food.

This was their first meeting in the midsummer of 2005.In that year, Tencent's advertising revenue was about 1 million yuan, and Sina's was 8500 million US dollars.Among all news portals, QQ.com's traffic lags behind Sina, Sohu, NetEase and TOM, ranking fifth.

Liu Shengyi's position at this time is the executive partner of Publicis China. Born in 1966, he is about to "forty" and eager to start a new life.In the Asian advertising industry, Malaysian-born Lau Seng Yee is considered a legend. He entered McCann Advertising after graduating from university and was responsible for the advertising business of Procter & Gamble and Nestle. He was transferred to work in Hong Kong in 1994 due to his outstanding performance. General Manager of China Region.However, after more than 31 years in the advertising industry, he wanted to change the runway.

At that time, the job options before Liu Shengyi included Google, eBay and Tencent.Driven by curiosity, he went south to Shenzhen to meet with Tencent executives.

"This is the first time I have been to Shenzhen. When I got off the plane, I was attracted by the clear sky and the scaffolding everywhere. On that day, several decision-makers from Tencent came. They were all wearing casual shirts. Only I said seriously Wearing suits. After meeting, everyone went to a nearby Cantonese restaurant for dinner, and then there was a group test." During the whole meal, Liu Shengyi hardly moved his chopsticks. After returning to the hotel, he went out alone Filled a bowl of beef noodles.In Liu Shengyi's first impression, Ma Huateng and Liu Chiping were full of worries about the future of Tencent.com. They were not worried about the lagging traffic, but worried about influence and advertising revenue.

Lau Chiping did not show Lau Shing Yee a tour of the company afterwards, but the two maintained frequent phone calls.The only thing Liu Shengyi remembers is that after leaving the "group exam" dinner, he was deeply moved by the dedication, concentration, and seriousness of this group of Chinese young people who were nearly 10 years younger than him.Liu Shengyi didn't know much about Tencent before, but this trip to Shenzhen has completely strengthened his willingness to join this company.

While Lau Chiping was trying to persuade Liu Shengyi to join Tencent, Tencent.com was trying to catch up in terms of traffic and change its image.

In August 2005, QQ.com was revised again, announcing the transition from a "news portal for youth" to "aspire to be the best comprehensive portal", which means that this website focusing on entertainment news and young people will pay more attention to the mainstream society.In the following year, Tencent quickly built an editorial team of more than 8 people from the three major news portals and traditional paper media.

On October 10, China launched the Shenzhou-12 manned spacecraft, which was China's first manned spacecraft to perform a "many people, multi-day" mission. news war.Sina.com has highlighted special reports for which it obtained exclusive cooperation rights from CCTV and conducted exclusive phone interviews with the families of pilots Fei Junlong and Nie Haisheng.Tencent has brought the "portal + IM" model to the extreme, and the QQ "mini homepage" pops up the dynamic news of Shenzhou VI in the first time, guiding users to enter the Tencent website.According to statistics as of October 2015, 10, Sina.com leads with 18 comments on "Shenzhou 109610 liftoff", and Tencent ranks second with 101587, surpassing Netease and Sohu.This is the first time Tencent has achieved a small victory in a major news event.Sun Zhonghuai said: "We use the QQ terminal to realize the immediacy and interactivity of the news, and other portals can only watch us anxiously."

On December 12, Tencent.com launched a new brand logo. The little penguin logo surrounded by green, yellow and red trajectory lines replaced the classic QQ penguin pattern. The Chinese logo "Tencent.com" and the English logo "QQ.com" Only some changes are made in the appearance, and the cartoon features are completely diluted.

For any company, brand rebranding is a major event, however, Tencent unexpectedly did not hold any press release ceremony.Ma Huateng only sent a brief rebranding speech on the website with the new logo, announcing: "Tencent has become a comprehensive Internet company integrating instant messaging, news portals, online games, and interactive entertainment. The logo of Tencent.com is no longer enough to reflect the existing industrial layout and business model of Tencent.com.”

Beginning in 2006, Tencent launched a strong traffic offensive.

在4月16日到5月6日的3周内，腾讯网流量首次超越新浪网。

From June 6th to July 9th, the final of the 7th FIFA World Cup was held in Germany, which once again became a "carnival month" for netizens.As of March 10, 18, the registered users of QQ exceeded 2006 million, and the number of monthly active users reached 3 million.Young netizens are undoubtedly the biggest fans of football games. QQ.com's World Cup site has 31 million users, comparable to Sina.com. In terms of traffic, QQ.com has achieved a decisive surpass.

On August 8, the national finals of the most popular TV talent show of the year "Super Girl" kicked off. Tencent and Hunan Satellite TV jointly launched the online TV "Super Girl Channel". Hundreds of millions of fans watched "Super Girl" on-demand on QQ Live. "For all the competitions, you can also exchange your feelings about the competition through the chat platform, and a large number of fans have established their own live broadcast rooms and QQ groups, and the natural community function of QQ has been brought into full play.

After the two news campaigns of the World Cup and "Super Girl", Tencent announced in a high-profile manner that it has become the number one portal in China and the fifth in the world.However, both Tencent people and everyone outside know that this is only a victory in the sense of traffic, and it does not fully match media influence or even advertising revenue.

"How many QQ users can afford Dior?"

Liu Shengyi joined Tencent in early 2006 as the executive vice president in charge of online marketing services and corporate branding. In July, Chen Juhong, who had served as the editor-in-chief of the current affairs magazine Nanfengchuang, was appointed as the editor-in-chief of Tencent.com.Their mission is to "make QQ.com get rid of the image of 'three lows' - young age, low education, low income, and truly become a mainstream media, while exploring the value of advertising."

Although he does not have any experience in Internet media, Liu Shengyi intuitively believes that the advertising value of Tencent.com is seriously underestimated.Although the traffic of Tencent.com surpassed that of Sina.com during the 2006 World Cup, the advertising revenue it attracted was only 1/4 of that of the latter. As far as the whole year is concerned, the advertising revenue of Tencent.com not only lagged behind Sina.com, but only Sohu.com 37%.

In April 2007, a group of large-scale light box advertisements of Tencent.com appeared in the airports of big cities such as Beijing and Shanghai. Many small patterns were combined to form giant outlines of whales, eagles and lions. The theme of the advertisement was "big influence, Great response."This is the first time in the history of Tencent to launch an outdoor image advertisement, and it is also the first action of Liu Shengyi after he took office. He tried to reverse the low image of Tencent.com and expand the brand influence at the airport with the highest density of political and business people.Tencent.com has successively become the exclusive Internet partner of the Boao Forum for Asia, the World Economic Annual Conference in Summer Davos, and the official supporter of the Women's World Cup.All these actions show that Liu Shengyi is trying to make Tencent more mainstream and adult in the fastest way.

However, the strategy of "removing young children" once made Tencent very uncomfortable, and the effect was not satisfactory. The facts are much more complicated than Liu Shengyi imagined.

Not long after joining Tencent, Lau Sheng Yee personally negotiated with the French cosmetics company Dior on advertising plans.In the past 10 years, his professional advice on advertising has been trusted by brand owners, but this time, Dior China President Li Dakang raised a question that he could not answer: "How many QQ users can afford it?" Dior products?"

The main audience of Dior is urban white-collar women over the age of 25 who are well-educated and earn a lot of money, which is quite different from people's usual impression of "young + low-end" QQ users.For the purpose of experiments and respect for Liu Shengyi, Dior agreed to open "Dior Space" in Qzone from June 2007, and carried out exploratory advertising.Before and after "Valentine's Day" on March 6, 2008, Tencent and Dior jointly launched the theme activity of "Entangling · Falling in Love". QQ users participating in this activity can get Dior as long as they upload photos of couples in their QQ space. , or buy Dior fragrances at discounted prices.Tencent set up a three-dimensional advertising placement for the event on Qzone, mini homepage and portal website.

One month later, the data provided by the monitoring company was not satisfactory, and the initial exploration of cooperation failed to allow Tencent and Dior to find a satisfactory answer.This also makes Tencent, which has 2.2 million active users, begin to think deeply about what kind of advertising ecology can serve the brand more effectively.

In June 2008, "First Financial Weekly", which was read by urban white-collar workers, published a cover article entitled "Penguin's Mistakes", which made a mockery of Tencent's mainstream advertising strategy.The reporter wrote: "Tencent's previous successful businesses were all based on the needs of young users, which is completely different from Sina.com, which does serious news. Everyone knows how dangerous it is for animals like penguins to leave the Antarctic."

In the reporter's view, Tencent, which is trying to get rid of its low-end image, is "a penguin leaving Antarctica".

In this report, some interviewees were indifferent to Tencent's new strategy.The sales director of a real estate brokerage agency told reporters: "Spend real estate advertisements for Tencent? Isn't this embarrassing me? We usually cooperate with SouFun.com, Focus Real Estate and Sina Real Estate. We have never cooperated with Tencent." General Motors is in charge of new media marketing The supervisor said: "Tencent's car channel is not a special feature of Tencent. We don't just look at the traffic provided by the website. We often collect data and compare websites by ourselves." An employee in charge of real estate advertising sales in the Sina advertising department He even said: "In the concept of our competitors, there is no Tencent at all."

This report by "First Financial Weekly" made Tencent, especially Liu Shengyi, who had never been interviewed by reporters, very dissatisfied.After negotiations, the magazine was forced to issue a short apology statement in the next issue, saying, "We made a mistake. In "Penguin Mistakes", two direct quotes from Tencent executive vice president Shengyi Liu were not directly interviewed by reporters. As a result, it created the illusion that the reporter directly interviewed Liu Shengyi himself."Nevertheless, "First Financial Weekly" revealed a basic fact: the automobile, real estate, finance and high-priced cosmetics industries are skeptical of Tencent's commercial value.Tencent must find a better way to prove its value.

MIND: Redefining Internet Advertising
When Li Dakang asked that embarrassing question, Liu Shengyi was already thinking about the answer. "I realized that Tencent may need a new set of advertising standards, that is, we have to redefine Internet advertising." He told me later.

Tencent's portal form is obviously completely different from traditional news portals. The latter's information dissemination is based on one-way sending and receiving, while Tencent.com is based on interactive sharing and experience, and user behavior has strong community characteristics, so it can also are analyzed and captured.

After 2007, with the maturity of the social network concept and the possibility of data analysis based on consumer behavior, the global Internet industry is looking for a new advertising operation model.

In November 2007, Facebook launched a self-service advertisement with the theme of "Trust Recommendation". This advertisement service called "Beacon" pushes relevant product information to users based on captured consumption records.Since this behavior was suspected of violating user privacy and was jointly sued by 11 million users, Facebook was forced to make a public apology and change the logic and method of information push.Still, the failed attempt offered a glimpse into the future of social networking and targeted advertising.

Almost at the same time that Facebook was experimenting with the "Lighthouse" business, the advertising team of the Internet Media Division proposed "Tencent Wisdom" - MIND at Tencent's internal brainstorming meeting, and received the support of Liu Shengyi.

Measurability: Use measurable effects to reflect the effectiveness, sustainability and scientific nature of online marketing.

Interactive Experience: Use interactive experience to provide high-quality innovative experience and fun online life experience.

Navigation: use precise navigation to ensure the precise selection of target users and the effect of online marketing experience.

Differentiation: Use differentiated positioning to create differences in online marketing to meet the unique needs of customers.

MIND redefines the logic and evaluation criteria of Internet advertising from the four aspects of effect, interaction, navigation and differentiation. Compared with other portal websites, this model is undoubtedly "tailor-made" for Tencent.

In Liu Shengyi's view, there are rules to follow in the footprints of all types of Internet users. "In the virtual world, people's access to the Internet can generate countless advertising touchpoints, and digital touchpoints with different attributes can also be blocked by advertisements with different needs." Tencent is a full-coverage life platform, and the coverage of users is its Strengths: more than 100 products and services can realize all Internet functions other than B2B, so Tencent can accurately intercept these users in different locations as long as they can effectively analyze the surfing habits of different advertising audiences.

Under the support of this concept, the technical department has upgraded the user system, reorganized the user information, and put the previously disordered information into "boxes" with various labels for various marketing tools. retrieval and analysis.Based on the above information, the advertising department has developed a precise targeting tool (TTT), and packaged it into various "advertising audience" packages, which are recommended to different advertisers.Tencent can provide advertisers with audience segmentation reports of advertising performance indicators at any time, such as clicks, exposures, unique clicks, etc., which can be segmented in various dimensions supported by targeted advertising (geography, gender, age, scene, etc.) Statistical Report.

This system is called "Digital Media Contact Solution", and Guo Silin, Liu Yao and Weng Siya are its executors.

On April 2008, 4, a meeting called "Tencent Wisdom · 15 Efficient Online Marketing Summit" was held in Beijing. For the first time, Liu Shengyi proposed the MIND model to the public and the media.Not long ago, data released by the US market research company BDA showed that China already had 2008 million Internet users, surpassing the 2.2 million Internet users in the United States for the first time, and becoming the world's largest Internet country.Invited by Liu Shengyi, Don Schultz, the father of integrated marketing communications (IMC), who came to Beijing to participate in the summit, said in his speech: "The Internet will bring great changes to integrated marketing communications. The communication system around the purely outward , this situation will no longer exist on the Internet. Here, the communication system is not simply outward, but interactive. Information is no longer controlled by marketers or information disseminators, but by customers. Customers are no longer It is the target of communication, but is on the same level as marketers or information disseminators; consumers are no longer the object of corporate persuasion, but the object of corporate listening and response.”

This observation of Don Schultz coincides with the MIND model proposed by Liu Shengyi.

In later attempts, Liu Shengyi's plan achieved results. In the second half of 2008, Ma Huateng disclosed in an interview with the media: "We have improved the delivery plans of many customers, resulting in an improvement of about 20% to 30%. Through the reorganization of user resources at a very low cost, we have already improved so much. With a large proportion, I believe the potential of the new model is still great.”

From the data point of view, Tencent's advertising business has made considerable progress during the two years since Liu Shengyi took office - the online advertising revenue in 2007 increased by 84.9% compared with the end of the previous year, reaching 4.93 million yuan, accounting for 12.9% of the group's total revenue. 2008%; by 8.26, advertising revenue increased to 67.5 million yuan, a year-on-year increase of 2008%.Compared with Sina, the latter's advertising revenue in 2.585 was 2007 million US dollars, an increase of 53% over [-], and the gap between the two has been gradually narrowing.

More importantly than data, the proposal of MIND allows Tencent to find a path of differentiation and transcendence. The concept of data analysis and precise delivery contained in it is more in line with the spirit of the new social network.

In 2009, Liu Shengyi proposed the MIND 2.0 version. Under this system, advertisers can choose advertising products and tools according to their different promotion needs, and integrate media resources. ROI) related. In 2011, Liu Shengyi further proposed the MIND 3.0 version based on human connections, providing one-stop commercial access for different types of media, providing a service interface for advertisers' diverse delivery needs, and providing technical access to third-party service partners. As a result, a new "advertising ecology" has been formed.

In the nine years since its birth, the MIND methodology promoted by Liu Shengyi has continued to evolve and upgrade in the direction of exploring digital marketing. During this period, it has crossed the four stages of gathering, focusing, opening, and linking. It has now entered MIND 9, which is the mobile panorama Digital marketing methodology for the era.

This cutting-edge methodology in the field of digital marketing not only follows the marketing practice and professional accumulation of Tencent Web Media in the portal era, but also covers the emerging full-scenario marketing, native advertising, IP content operation, and brand effect integration in the mobile era. 5.0. Almost all cutting-edge fields such as programming trends and technology drivers have become the combination of digital marketing theory and practice in the mobile era, closely related to the unique social, entertainment and consumption concepts of the new generation, and have the deepest understanding and understanding of the advertising crowd. The mainstream methodology of understanding.With the help of MIND [-], advertisers can constantly collide, innovate, and try to find a suitable mainstream communication method.

With the close combination of theory and practice, Tencent has also become one of the initiators and important participants of domestic digital marketing standards and rules. In August 2016, Tencent, as one of the founding members, actively promoted the establishment of China Media Evaluation Committee, the first media evaluation and certification organization in China, and Liu Shengyi was elected as the chairman of the first council.

Today, the revenue growth rate of Tencent's online advertising business has maintained a double-digit growth rate, which has become one of the important supports for Tencent's performance growth, especially in terms of operational performance and commercialization contributions on the mobile terminal.

In June 2015, Liu Shengyi boarded the podium of the 6nd Cannes International Creativity Festival, becoming the first Chinese in the world to receive this honor.Terry Savage, chairman of the Cannes International Creative Festival, who handed him the "Media Personality of the Year" Golden Lion trophy, commented: "Liu Shengyi is very influential in today's media landscape. Under his leadership, Tencent's online media business group has become one of the largest online media platforms in the world."

Guangdiantong: The Counterattack of "Effective Advertising"
Since 2010, Tang Daosheng has been leading the Internet value-added business department. At this time, his Mandarin is relatively fluent, and he can even tell awkward jokes.For him with a technical background, he is also faced with the proposition of how to improve traffic efficiency.Thus, Guangdiantong appeared.

Compared with news portals in the traditional sense, the social platform with the QQ series as its main product has not found a suitable advertising delivery model, which makes Tencent's daily traffic of tens of billions of dollars wasted.It was the emergence of a new technology tool called big data mining that opened up a new path for Tang Daosheng.

It is exactly the same as Liu Shengyi's concept of "returning the right to advertise to advertisers". The model of Guangdiantong also releases Tencent's huge traffic resources and gives advertisers a right to configure and place freely.And its theoretical basis was big data mining, which was still very unfamiliar at the time. For this reason, Tang Daosheng organized a small and capable team to conduct a systematic development of traffic attributes and values.

For a long time, Internet advertising was dominated by two models.

The first is the "portal advertisement" promoted by portal websites such as Sina and Sohu. From the perspective of advertising audiences, portal advertisements are not essentially different from traditional media advertisements, such as TV and newspapers, and are mainly displayed in the form of Banners, which are difficult to subdivide Visitors rely more on media attributes and influence display, and measure the effectiveness of advertisements through the number of advertisement exposures.

The second is "search advertising" dominated by search engine websites. After 2005, online advertising began to have a benign development. Google, Baidu and Alibaba became typical representatives of this period. They displayed relevant advertising content according to users' search keywords. Since then, online advertising has entered the era of precision marketing.

Different from "portal advertisement" and "search advertisement", Guangdiantong put forward the brand-new concept of "effect advertisement".

Advertisers have upgraded from "time purchase" to "effect purchase" in the delivery, and more emphasis is placed on calculating advertising costs based on the effects of advertisements.Guangdiantong recommends and displays advertising content based on user attributes and friend groups. Different users who visit the same interface will see different advertisements tailored for them. While enhancing the humanization and interactive experience of advertisements, through user Influence amplification and radiation of social attributes and friendship chains.For users, they will only see the advertisements they are interested in, and for advertisers, it saves wasted advertising fees.

Guangdiantong is the first to go online in Qzone, and the cost paid by advertisers for a single effective browsing is very low.This model of splitting the whole into parts and relying on effects to stimulate delivery was quickly welcomed by the majority of small and medium-sized advertisers. After 2011, the traffic covered by Guangdiantong has expanded from spatial Web traffic to multi-terminal cross-screen platforms such as QQ client and mobile QZone.This new model greatly stimulated Tencent's advertising business. By 2012, Tencent's overall online advertising revenue surpassed that of Sina.com for the first time in history.

It was also during this period that the craze for new media quickly migrated from PC to mobile, from portals to social media, from mobile to mass media, and the organizational form of information evolved from timelines to points of interest, based on big data and artificial intelligence The technical content platform has become the hub of content supply in the new era, and the content can be matched to readers in real time and intelligently.Under this trend, interest-based reading products featuring "personalization" and "algorithm recommendation" have sprung up rapidly, and this category of information APP, which is an aggregation platform, has taken a step forward.

Under the leadership of Liu Shengyi, Tencent Internet Media has always been aware of the trend and constantly upgraded. While Tencent News client has become the first in the mobile application market, it has closely followed the trend and launched interesting reading products that are compatible with mass, entertainment, and fragmentation. "Tiantian Express", which aggregates a large amount of content through the "Mongzhong Project" and the Penguin media platform, pushes content through "precise algorithm + operation", so that readers of different interest circles can find the content they are interested in.

As of the first half of 2016, Tencent News has been ranked No. [-] in the industry for many years, and "Daily Express" has also risen rapidly in just one year, occupying the third position in the market. The dual-engine strategy of "Tencent News + Daily Express" has enabled Tencent to firmly occupy two of the top three news and information clients, realizing the migration transition to the mobile terminal.

(End of this chapter)