Final Summary

Written by Joey WANG 

As last semester I have gained some followers via the essays written last year, I do have a pretty good impression on Blogger, so this term I chose to launch my essays on Blogger as well.

Previously, I always shared the essay links on my Wechat Moments to help drive traffic, as there are many of my friends who have the same interest with me. And I could always have a discussion with my readers. So Wechat Moments used to be the best choice of my promotion. Unfortunately, Wechat blocked Blogger somehow that all the links shared from Blogger will not work on Wechat Moments. Every time my readers open the link on Wechat Moments, all they found is a huge “ERROR”, which I bet that thanks for the action of Wechat, the bounce rate of my web must be super high this term. Such an obstacle directly and seriously affected the spread of my essay, which could be clearly read from my page views: dramatic decreases compared with previous essays.

Thus, I came up with a new idea that to launch my essays on Facebook. When I shared my link, I always wrote several lines of words to introduce the core content of my essay and tried to raise some worth discussed topics in order to make my launch more eye-catching. However, because on the one hand, I have fewer friends on Facebook compared with hundreds of friends on Wechat, the influence is really limited. Also as we know that Facebook is blocked in Mainland China as well so that expansion could be more difficult. Besides, of course there also might be a possibility that my content is not interesting and attractive enough; my keywords may not be clear enough to be caught by spiders, etc. But the necessity of proper channels should never be neglected and must be carefully chosen.  

Are The Feed Ads of Wechat Moments Based on Big Data on Earth?

Written by Joey Wang

On Jan 25^th, 2015, Wechat-the most popular Chinese instant message and social network service application, started to feed ads in Wechat Moments. Coca-Cola, BMW China, and Vivo, the Chinese smartphone maker were the first advertisers to conduct the tested advertising. Interestingly, it seemed that the sponsored ads followed some mechanisms as different users had loaded different ads, which dramatically caused a hot topic among Wechat users. All they wanted to know is why did I receive this specific ad instead of others?

Then nearly every guess pointed to big data, a kind of analytic way used to unlock hidden patterns, market trends, customer preferences and other potential business values, etc. And according to IBM data scientists, big data could be broken into four dimensions: Volume, Velocity, Variety and Veracity, which means that big data encompasses information from multiple internal and external sources.

As after analyzing by some passionate users, a conclusion was generated that the rich ones with annual income over 1 million RMB received BMW ads, those who are not iPhone users but able to afford Xiaomi got Vivo ads and those who even cannot afford Xiaomi or teenagers got Coca-Cola ads. Sounds like a joke, but worth deeply thinking, as it did show a clue that the notifications based on users’ demographics and behavior information detected from their chatting history or moment posts such as hobbies, habits, preferences, etc. From this perspective, the feature of Variety can be approved. Also, on the other hand, it is known that with the help of big data analytics, advertisers will have more opportunities to reach different consumers with personalized and provide more precise advertising. All these messages could be tailored to users interests based on the information gained from aspects mentioned above. What’s more, in the third quarter of last year, Wechat has already owns 468 million monthly active users who keep creating large scale information everyday, which ensures the volume and velocity of big data. Therefore, we have the reason to believe that it is big data that gives Wechat or its advertisers a hand to engage with their target or potential customers.

However, when taking the effect of big data into consideration, the fact that big data helps provide precise information to target customers is inevitable. Hence, precision becomes one of the standards of big data. Here we defined precision into two dimensions: precise channel and precise content. Then reflecting on those Wechat ads, which were not sent in a one-to-one private chat way but spreading with the help of Wechat moments’ socialization, they failed to reach the standard of precise channel in a way. Meanwhile, when focusing on the content of these feed ads, all of them are brand advertising instead of specific product promotion, which are actually aiming to raise brand recognition. Therefore, it is undeniable that those ads did not cover precise content, either. From this perspective, did big data real matter? I think it is worth doubting.

Overall, it seems that although the feed ads of Wechat moments have the ability of big data as they did reflect the nature of big data, the applying of big data analytics still needs to be more precise.

KPI And KPD, Which One Is More Valuable?

Written by Joey Wang

When evaluating if an organization or company has meet its business goals or whether it is a successful engaged activity, many of them would like to set a series of metrics to measure performance, among which the most frequently used type is Key Performance Indicator (KPI) as a performance measurement to measure the progress. Generally speaking, key performance indicators are numbers that reflect the outcome, which deliver messages and provide feedback about companies’ business, but they don’t really tell how these occurred and why. In other words, indicators cannot be managed.

However, there is another type of performance metric called key performance driver (KPD), which is aligned to measure different aspects of the business progress that will directly influence results and outcomes. Or we can directly regard KPD as a metric to produce performance, which also means that you can easily figure out who made the largest contribution towards the success. Unlike KPI, KPD tells you why and gives you instructions about what to do next.

Thus we can understand the differences between KPI and KPD: KPD produces performance and KPI measures performance; KPI delivers feedback but KPD provides results; KPI are not manageable while KPD could be well managed. In hat case, here comes a question: which one is on earth more valuable?

Imagine if indicators inform you that your company fails to meet the goal, the first thing came to your mind is to identify issues, find out the reason and fix it, which means that you have to check the monitored KPDs, determine the best actions to correct the problems and improve the way your key drivers perform. Also, those presenting KPIs only represent your past performance and does not guarantee the future results, while when you look at KPDs, you will have a clear version about what to do next step and which part should be put more efforts on to optimize the performance and drive the possibility of success. In a word, KPDs capture information about what is exactly driving and stimulating a business operation and management. They proactively help companies identify processes that are in danger, and processes that are in alignment with companies’ best practices, which are the essential roles that KPIs cannot play. On the contrary, when proper KPDs set, the monitored KPIs will straightly tell you whether it works and reach the objectives or not.

Hence we could draw a conclusion about the relevance between KPI and KPD: KPIs are the numbers that are produced as an effort of the KPDs. In other words, KPDs are the key components in delivering the KPI’s. Without KPDs, we cannot get KPIs.

Therefore, it seems that KPDs are more valuable than KPIs, especially when a company wants to build and lead a practice that consistently performs at the upper levels of its potential, the pursuit for decisive and actionable business metrics should not begin and end with KPIs alone, but have to pay more attention on KPDs. However, looking at the corporates in China, most of them still stay at the stage that is preoccupied with performance indicators but fail to focus on and manage performance drivers, which indeed needs to be adjusted immediately. In a word, if you want to improve the performance and growth of you corporate, focus more on key performance drivers PLEASE!

Will CPE Play An Important Role among Pricing Models?

Written by Joey Wang

It is well known that for display advertising, the pricing models of CPM (cost per thousand impressions) and CPC (cost per click) are the most frequently used ones, which are also the proof of the increasing maturity of the web and mobile channels. Undeniably, shortages exist as well. For example, there is no doubt that not all the ad impressions are dutifully viewed by the audience but it is a nature of CPM. For those advertisers who do care about ROI, it always causes waste of money. Thus, CPC is always regarded as the most common alternative model to CPM, which could reflect the readers’ initial engagement willing with the ads.

Then speaking of engagement, there are more advertisers now focusing on creating interactive content to attract audience to get involved in the online campaigns as they have realized the phenomenon that CTRs for traditional banner ads been declining for years.

Therefore, in response, it is said that an increasing number of publishers have started providing a new model called CPE, which stands for cost per engagement. In CPE model, the impressions are free, it asks advertisers to pay only when users “engage” with the ads. In the past, we always treat those “like”s, “comment”s, “share”s, page or video views, etc. on social media as vanity metrics, which make not that much sense. While the CPE model takes all these into considerations, as advertisers have begun to wonder that whether their display advertising are exactly doing something to reach their business goals, especially for those brand marketers who want to move the needle on brand awareness, purchase intention and favorability. From this perspective, it seems that the CPE model does have its necessity of existence. Some advertisers even claimed that, clicks are a good proxy for direct response, but cognition is the right measurement for branding. CPE models that guarantee message comprehension will be seen as a last mile solution for branding.

Also as mentioned above, in CPE model, the impressions are free, which means that publishers who promote CPE pricing must believe that they can ensure genuine engagement at larger scale or even lower cost than their peers or competitors. Maybe because they have effective format or they can reach audience with a more relevant context. Otherwise, if CPE publishers fail to drive the engagement as promised, they will never get paid, which is actually beneficial to marketers.

However, what must be clarified is, the CPE does not fit for all the marketers. For example, for direct response marketers who are typically very focusing on ROI when buying advertising, all they want to know is whether people are going to buy, how many of the sales and whether the media they spent is going to be profitable. Engagement is not included in their business goals and then CPE should never become the choice of them. Therefore, it also reminds the advertisers that do understand what you are paying for and balance whether the model matches with your business goals. Besides, once decided to pay for engagement, marketers also have to make sure that they target at the right audience, if not, it will not make any difference to the situation that people will ignore your advertising.

Then back to the question of the title, as discussed above, I don’t think CPE is going to replace CPM who is the dominant display advertising metric as it is closed linked with the business goals of advertisers who are aiming to influence perception and gain brand awareness. But it still matters when necessary.