Internet Business Thinking

Chapter 38 Business Crisis in the Internet Era: What They Do at Critical Moments (1)
(Section [-]) Baidu: No longer relying solely on PPC

Baidu tries to solve the three major problems of brand advertising in the mobile Internet era in order to gain the recognition of brand advertisers: one is how to capture the fragmented behavior of consumers; How to resolve a reputation crisis when perceptions have become very negative.

The diversification strategy has become the same choice for several major Internet giants, and it is the same for Baidu.But no matter how many products and projects there are, the core business of Baidu will always be advertising, and the most profitable product must be the PPC of search engines. This has never changed.

Now, Baidu wants to change that.In the face of increasingly fierce competition, Baidu is trying to get rid of the operating revenue model of a single bidding ranking.

From effect to brand
As we all know, the needs of all advertisers can be divided into two categories: the first is performance advertising, which is the type of advertising that Baidu used to bid for rankings, and advertisers pay based on performance; the second is brand advertising, especially for some For large companies, what they care about is establishing and maintaining their brand image.

If advertising is Baidu's main profit model, then a series of products represented by Baidu's bidding ranking before were all performance-based ads, but lacked brand-type ads.From this perspective, the previous Baidu had flaws in its advertising business.As Zeng Liang, vice president of Baidu, said: "Baidu's marketing model was mentioned before. Advertisers used to use data such as CPC and CPM to measure it. Advertisers have become accustomed to investing one yuan in return for five yuan in sales."

Therefore, Baidu tried to reverse its image in the minds of brand advertisers.It has long been a consensus in the industry to use numbers to measure the effectiveness of advertising, but brand advertising has always been a "black box" in the minds of advertisers.

"I know that half of the advertising cost is wasted, but I don't know which half." This classic adage in the advertising industry describes brand advertising.Now, Baidu is trying to quantify the corporate brand, measure the brand with numbers, and tell advertisers what half of the advertising cost is wasted.

Not long ago, Baidu and Millward Brown jointly released the brand digital list, which is special in that it quantifies the brand digital assets of each manufacturer through a unit called "bit".Based on massive big data statistics, "out of 100 consumers who have considered this brand on average, how many first think of this brand", "per capita search of consumers", "proportion of positive comments among consumers in UGC", "this brand occupies the whole Brand search share in the industry” and other categories, you can see the relevant information and competition status of the brand at a glance.

So, Baidu spent a lot of manpower and material resources, and also contributed its own data to make this "Brand Digital List". What is the ultimate goal?Chen Zhifeng, commercial director of Baidu, said the key point: "In the traditional era, the history of brand marketing is relatively short. Brand marketing only appeared after the emergence of mass media. With TV, brand marketing has really developed. Now, traditional mass media has already Going digital, so can we reinvent brand marketing? Is there a new approach when the traditional approach to brand marketing is unreliable?"

Solve the three major problems of brand advertising

Baidu’s logic is: with the popularization of the Internet and mobile Internet, advertisers have encountered more problems when building brands, and these brand building problems cannot be solved by traditional methods. If Baidu can solve them, it will naturally Grab the advertising share of traditional media.

Advertisers will encounter various difficulties when building their brands, but in general, they can be attributed to three aspects.

The first question is how to capture the fragmented behavior of consumers.Now, the way people obtain information is becoming more and more fragmented, so how to capture fragmented behavior?Especially when there is a new product on the market, how to arouse the interest of most target audiences?

In order to solve this problem, Baidu launched a product called "Overnight Fame". All the display positions inside and outside the Baidu website will be exclusively owned by a brand overnight, so that it can gain maximum exposure.

On the night of the AFC Champions League on November 2013, 11, the Guangzhou Evergrande football team won the championship of the Asian Champions Club Competition.Evergrande Group also took this opportunity to launch the mineral water brand Evergrande Bingquan.For the new brand of Evergrande Bingquan, the problem is that it needs a large amount of exposure in a short period of time.Zeng Liang said: "The brand of Evergrande Bingquan gained 9 billion exposures through the overnight success of this product. Within 30 hours, 9 million netizens participated in the interaction of the website, and the search index reached 400 per day."

The second question is how to reshape the image of an old brand and bloom a new brilliance.An old brand with a certain influence will gradually have problems such as weak channel growth and weak sales.In other words, the brand image has already been positioned among the target consumers and it is difficult to change it.At this time, how to find a blue ocean market for this brand, so that the brand that has already been positioned by people can bloom new brand vitality?
In this regard, Baidu's solution is to use big data.Zeng Liang gave the reporter an example: "In 2011, Baidu did some search word research on Olay and some other cosmetics brands, and found that 25% of users who searched for Olay would then search for applicable age, while other brands did not have this feature. What does this explain? It shows that many consumers do not know what age Olay is suitable for. The positioning of this brand is a little unclear, and this will affect the market sales of Olay. After Baidu communicated this discovery with P&G, P&G immediately Launched a packaged product—Olay 25 Years Old, clearly positioning this product as a product suitable for young people around 25 years old. Now, this Olay 25 Years Old is Olay’s best-selling popular single product.”

The third question is, when brand perception has become very negative, how to resolve the reputation crisis, so that a crisis-ridden brand can have more positive energy, so as to change the public's negative perception of the brand.

Let's take Coca-Cola as an example.The biggest problem with this brand is that there are too many negative things.There are often some doubts. For example, some people say that drinking carbonated drinks is bad for your health and can lead to obesity. There are also rumors that drinking Coca-Cola can lead to calcium deficiency, stomach problems, and even lead to decreased male sexual function.

Compared with traditional and rigid print advertisements, the powerful social and interactive features of the Internet and mobile Internet are obviously more suitable for rebranding.Therefore, Baidu and Coca-Cola planned a special topic called "Things about Coca-Cola". On various social platforms such as the Internet, Baidu Tieba, mobile apps, and Baidu Light Apps, many interesting topics around Coca-Cola were launched and disseminated through questions and answers.

It is undeniable that traditional media still has a value that cannot be ignored in brand advertising.But there is no doubt that many new media, including Baidu, are robbing brand advertisers of advertising shares.As Zeng Liang said: "A few years ago, big brand advertisers did not regard Baidu as a base for brand building, but now they do."

(Section [-]) Alibaba Factions Compete for Maps

On September 2013, 9, Lu Zhaoxi, CEO of Alibaba Group, announced the group's decision: the establishment of the Alibaba Network Communication Division, which consists of the original Wangxin business and business transactions, reporting directly to Lu Zhaoxi; the establishment of the Taodiandian Division, which was originally The wireless intra-city team and the Diandian team of local life report directly to Lu Zhaoxi; the OS business department is upgraded to the OS business group, which is composed of the OS mobile phone business department and the OS home smart entertainment business department; the Alibaba digital entertainment business group is established, led by music , video, reading, home entertainment, and original composition, the original Xiami Music Division entered this business group.

This is the first large-scale deployment of organizational structure and business segments after Lu Zhaoxi took over as CEO of Alibaba Group.In the previous January, Alibaba was split into 1 business divisions.Ma Yun’s retirement and the appointment of new CEO Lu Zhaoxi in May have made people full of curiosity about Alibaba’s intricate business structure and the resulting personnel shocks: Why did Ma Yun announce his retirement at the critical moment when Alibaba is seeking a secondary listing? How are the management team members of the 25 divisions composed?In connection with Alibaba's cadre rotation system and the successive resignations of the executive team, is there any factional dispute in the Alibaba executive team?If yes, in what structural condition?How are executive factions fighting for control of Alibaba?How did Ma Yun effectively grasp the control of Alibaba's executive team?
Changes in the organizational structure lead to a major shake-up at the top
During the 1999 years from 2013 to 14, Alibaba’s organizational structure has undergone three major changes, and accordingly, the senior management team has also undergone tremendous changes.

The first organizational structure - "Five Fingers of Dharma".Front-line executive team: "Five Tigers".

After the acquisition of Yahoo China in July 2005, at the end of 7, Jack Ma made the first organizational change to Alibaba, turning Alibaba into a holding company, independent of each business department, and established five wholly-owned subsidiaries: Alibaba, Taobao, Alipay, China Yahoo and Alisoft.This is the prototype of a giant company, but only the B2006B business is profitable. Taobao and Alipay have a certain market share and have not yet started to make profits. China's Yahoo and Alisoft have mediocre performance.At that time, Wei Zhe, CEO of B5B Group, Zeng Ming, President of Yahoo China, Sun Tongyu, President of Taobao, Lu Zhaoxi, President of Alipay, and Wang Tao, General Manager of Alibaba Software, were known as the "Five Tigers" of Alibaba's front-line management.

However, the good times didn't last long. In 2008, affected by the financial crisis, the growth of B2B business has been sluggish, and fraud incidents occurred frequently. Wei Zhe was forced to resign for the company.The business version promoted by Alisoft was also greatly impacted. Investors were seriously dissatisfied with Wang Tao, who was forced to resign in 2009.Zeng Ming was appointed as the president of the new Alisoft to clean up the mess. Jin Jianhang took over Yahoo China from Zeng Ming and was in charge of the remaining three parts of finance, entertainment and sports.And Sun Tongyu left as early as the end of 2007 for the reason of "rotation study".The financial crisis wiped out the "Five Tigers", and the only survivor is Lu Zhaoxi, who founded Alipay in 2004 and succeeded Sun Tongyu as the president of Taobao in 2007.Prior to this, he established the South China Region in Shenzhen to promote B2B business.

The second organizational structure - seven major business groups.Front-line executive team: "Seven Swords of Dugu".

In order to separate Taobao from the notoriety of "fake goods", in June 2011, Jack Ma announced that Taobao would be split into three companies: Yitao.com, Taobao.com and Taobao Mall (later renamed Tmall).After the split, under the efforts of CEO Zhang Yong, Taobao Mall quickly gathered a number of high-quality flagship stores. In July 6, Jack Ma separated Juhuasuan from Taobao, and divided the B2012B business into two major sections: Ali International Business and Ali Small Enterprise Business.In this way, Alibaba Group’s business has become seven major business groups: Taobao, Yitao, Tmall, Juhuasuan, Ali International Business, Ali Small Enterprise Business, and Alibaba Cloud. The presidents of the seven business groups are Jiang Peng, Wu Yongming, and Zhang Yong. , Zhang Yu, Wu Minzhi, Ye Peng and Wang Jian, known as the "Dugu Seven Swords", they report directly to Ma Yun.Ma Yun hopes that Wang Jian, who was the vice president of Microsoft Asia Research Institute, can build Aliyun, which is an extension of Alisoft.This structural adjustment does not involve Alipay and China Yahoo.The presidents of these two companies are veteran figures Peng Lei and Zeng Ming respectively.

The third organizational structure—split into 25 business divisions.Front-line executive team: "Dugu Nine Swords".

In January 2013, Jack Ma announced that on the basis of the "Seven Swords", the Alibaba Group would be split into 1 small business divisions.There are only 25 managers. On the basis of the "Seven Swords", Zhang Jianfeng and Lu Zhaoxi were added, known as the "Nine Swords".This is part of the listed company of Alibaba Group, and Lu Zhaoxi is the CEO.

Alipay was split into a shared platform business group, a domestic business group and an international business group, and merged with the Ali Finance business group to form Ali Finance. The Ali Micro Financial Services Group formed by these four business groups has Peng Lei as CEO.The financial business has always been the business that Ma Yun wants to develop. If there is no accident, Alibaba will set up an online bank, mainly for small and micro enterprises and personal services for consumers.Unable to be valued at the beginning, it belongs to the part of non-listed companies.

Ma Yun's split this time is mainly based on his original intention of starting a business "to make the world easy to do business".The part of the listed company that Lu Zhaoxi is in charge of mainly continues Ma Yun’s two major positionings of “helping small and medium-sized sellers start businesses and making the manufacturing industry profitable”.In the formation of the team, Ma Yun completed it based on the vision of Alibaba's future transformation of the three major businesses of "platform, finance and data": Lu Zhaoxi is in charge of the traditional platform business and data business; Peng Lei is in charge of the financial business.

Are there factions in the new system?
The new system consists of a strategic decision-making committee (responsible for the board of directors) and a strategic management executive committee (responsible for the CEO).In the organizational structure announced as early as January 2013, the board of directors was a separate level above the two committees, but this level was removed later.The members of the strategic decision-making committee include Ma Yun, the group's chief financial officer Cai Chongxin, chief marketing officer Wang Shuai, chief risk officer Shao Xiaofeng, chief human resources officer Peng Lei, chief data officer Lu Zhaoxi, and chief strategy officer Zeng Ming.One of Ma Yun's requirements for the group CEO is "to reassure the decision-making committee headed by Ma Yun".This shows that although Ma Yun retreated to the second line and only served as the chairman of the board of directors, this did not affect his control of everything.

B2B business, Taobao's C2C business and Alipay's third-party payment business have always been the absolute main force of Alibaba's faction.On the issue of successors, Jack Ma has inspected more than a dozen senior executives including Lu Zhaoxi, Peng Lei, Zeng Ming, Shao Xiaofeng, Zhang Yong, Jiang Peng, Zhang Yu, Wu Yongming, and Wang Shuai. All factions are leaders, and they are considered to have the ability to coordinate various factions and become the best candidates.

As Ma Yun's chosen successor, Lu Zhaoxi is neither the founding veteran nor Ma Yun's fellow countryman. What Ma Yun values ​​is his management ability.Like Ma Yun, he is not an IT major and knows nothing about IT technology. He is trusted by Ma Yun only because he firmly believes that the Internet will further change the world and is willing to work hard for it.He is also trusted and affirmed by Ma Yun because of his low-key and introverted expression, which complements Ma Yun's extroverted and kind words, but this does not mean that he can successfully lead the 25 business divisions that have just been split to a new level.

If Lu Zhaoxi wants to achieve results in the short term, he must learn Tai Chi like Jack Ma.Because in this process, the strategic decision-making committee representing the will of the board of directors can carry out vertical management among the subsidiaries in various forms. Also vertically, there is the "political commissar system" in the ideological field. The business between them and the subsidiaries There is a clear check and balance.

Take another look at Alibaba's Eighteen Arhats. During the 2009th anniversary celebration in 2011, Eighteen Arhats re-competed for employment and changed the founder system to the partner system.Wei Zhe and Lu Zhaoxi are both newly joined partners.Among the Eighteen Arhats, except for Cai Chongxin and Peng Lei who entered the senior management team, most of them work in the middle and high levels and become the backbone of the group's development.They are very authoritative in the monitoring and impeachment of the company's business and executives. The "Fraud Gate" incident in 2 came from the exposure of Jiang Fang, one of the Eighteen Arhats.Lu Zhaoxi, who was just promoted to CEO of the group, was approved by Cai Chongxin, and he was strongly recommended by Cai Chongxin to succeed Wei Zhe as the CEO of B12B.Shao Xiaofeng, who set a record for Alipay's daily transaction volume exceeding [-] billion yuan, was asked to report to Peng Lei.After the split, some founders began to move from behind the scenes to the front stage. For example, Dai Shan succeeded Peng Lei as the group's CPO, and she had previously reported to Peng Lei.

Lu Zhaoxi is recognized within Alibaba as the most executive executive.He founded Alipay, and after Sun Tongyu left, he took over Taobao; after Wei Zhe left, he took over as CEO of B2B.Later, he served as chief data officer, and the data platform he was in charge of was one of Jack Ma's important strategies for Alibaba's future planning.Peng Lei is the cadre with the most rotations in Alibaba. Except for the CTO, she has done almost all of them.When Sun Tongyu resigned, Peng Lei knew the news but did not tell him. From this matter, Peng Lei won the trust and reuse of Ma Yun.Therefore, under the new structure, under the "dual CEO" model of Lu Zhaoxi and Peng Lei, whether to "refer to Lu as a horse" or "refer to Peng as a horse" is obviously an unavoidable question.In addition, chief marketing officer Wang Shuai is said to be Ma Yun's direct lineage, and chief risk officer Shao Xiaofeng is Ma Yun's fellow. When Taobao was attacked by merchants in 2011, it was Shao Xiaofeng, Zhang Yong, and Wang Shuai who provided the solution. They were trusted by Ma Yun, and they all have the possibility of challenging Lu Zhaoxi's position again.

Before the appointment of the new CEO, Jiang Peng and Zhang Yu from "Dugu Nine Swords" reported to Lu Zhaoxi; Wu Yongming reported to Peng Lei; Zhang Yong reported to Zeng Ming.Ye Peng, who used to be the COO of Baidu, and Wang Jian, who came from Microsoft, did not have a deep foundation in Alibaba.Zhang Jianfeng and Wu Minzhi belong to the new executives who have been adjusted this time, and their qualifications are not deep.

(End of this chapter)