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.

Final Summary

Written by Joey Wang

When asked to pick up a platform for our essays, the first choice came to my mind is LinkedIn, as it is my most familiar one with many of my professional connections there. So I thought that my essays might gain some valuable comments from them. However, LinkedIn will not allow users to write long blogs until reaching a proper level while I failed to fulfill the level. Finally I just turned to choose Blogger as my friends around me are all using it.

In order to make my essays more eye-catching, I created all titles as questions such as “Will Apple Pay Threaten The Status of AliPay in China?”, “Can E-commercialization of Paper Media Be Successful?” and “Will Wechat Contacts Grab Chinese Mobile Operators’ Market?”, which may inspire readers’ interests and thoughts and make them more willing to read my insights. At the same time, such questions also help encourage readers to present their own thoughts and interactions as well as discussions may occur. Besides, every essay has relevant picture I picked to match with the main idea, which also helps attract readers and make them better understand what I am talking about.

As I am a newcomer of Blogger who has no connections with anyone, raising the attention of others became one of the most significant tasks. Therefore, every time I finished one piece of essay, I would like to share the link through Wechat Moments to my friends and ask them to have a look at the topic I discussed about if they are interested. I will make a brief introduction of the issue I focused on this time, putting forward my own opinion and invite them to give their own ideas. At last, my Blogger gained 521 page views totally with the visitors from 9 different countries and districts such as Hong Kong, America, France, Mainland China, Japan, Taiwan, Canada, Britain and Macau, which surprised me very much. And 58% of them viewed my Blogger through the link I shared on the Wechat Moment, showing that such a sharing is helpful. Thus, it also proves the influence of social media.

Even so, there are also some limitations of my promotion this time. The expected heated debate and interactions failed to achieve because every comment from my friends is about praising the structure, the topic as well as the so-called “insightful thoughts” and nobody would like to present their own critical ideas of the topic I mentioned. Maybe it is because that what I talked about is still not attractive enough or not insightful enough, which should be optimized in the future!

Will Wechat Contacts Grab Chinese Mobile Operators’ Market?

Written by Joey Wang

2014, Nov 11^th, nearly everyone was focusing on 
Single’s day online shopping, while Tecent launched a new product called Wechat Contacts, enables users make phone calls with their friends of Wechat FREELY, which seems may give Chinese mobile operators another hit. Flashing back, the figure of short message users dropped dramatically because of the popularity of Wechat, which triggered complaints and panics of mobile operators several months ago. Today, Wechat Contacts comes to challenge mobile operators again. Thus here comes a question: will Wechat Contacts grab or even shake mobile operators market in terms of calling service?

For mobile operators, on the one hand, the bargaining power of users gets increasingly stronger as they have substitutes such as communicating through Wechat so they are gradually hard to be pleased and satisfied. On the other hand, the appearance of new threat Wechat Contacts with its FREE service and similar call quality does burden their situation. For the mentioned reasons, Chinese mobile operators should loose considerable numbers of users theoretically. However, user adoption towards new product or service depends on multiple elements because the long-term generated user habit of calling can be difficult to change. That is to say, there are still limitations existing of Wechat Contacts that cannot easily shake mobile operators’ market position from my perspective.

In spite of its call quality, is the Free service really free? Actually, this so-called free calling is nothing but a strategy to attract users. Because users still have to use it by consuming network traffic, which has the similar price with normal communication by phone or even more expensive, even when using Wechat Contacts in Wi-Fi environment, users also have to pay for Wi-Fi. On the other hand, actually, before Wechat Contacts, they are already several apps with similar functions produced to serve users but failed to generate a large user scale, shows that the free calling service is less popular than expected. Since Wechat Contacts is not a real free service, what on earth is its core competitiveness and unique differenriation to catch users’ eyeballs? As one of the users, I cannot find anything special from its current app version, which also proves that the importance of user experience towards the promotion and popularization of a new product/service.

Apart from the product itself, its penetration can also become a challenge. According to recent research, there is increasing number of young generation users who are also the main force of smartphones preferring texting to calling as texting is asynchronous (non-blocking), low bandwidth (full attention not needed; answer when ready) and convenient in almost any situation. Admittedly, such a status does bring an obstacle to the penetration of Wechat Contacts, as calling is no longer the first choice among considerable users when communication happens. In addition, it is believed that early adopters play significant roles in the promotion of a new product. And Wechat Contacts is based on Wechat, whose users mainly gather in higher tier cities. That is to say, even there are numbers of early adopters willing to use Wechat Contacts, its penetration towards lower tier cities could be limiting. Therefore, Wechat Contacts is not competitive enough to conquer with the mobile operators, not to mention grabbing their market.

However, does it mean that Wechat Contacts will not threaten the market of mobile operators? Since it is a newly developed product with much potential to be exploited, maybe an integration of some O2O services or Yellow Pages navigation can enhance its competitive force towards mobile operators. As users are always the center of the products and services, only better user experience can help grab more market share in market competition.