Affected by Apple's new information security regulations, the revenue of major advertising platforms has plummeted. Personalized advertising platforms such as Snapchat, Facebook, Twitter and YouTube lost about $9.85 billion in revenue in the months that Apple changed its privacy settings, according to the Financial Times.
However, not all advertising platforms live in misery. For example, Google has managed to rise against the trend under Apple's New Deal.
On October 26, Google's parent company Alphabet released its third-quarter 2021 financial report. The company's third-quarter revenue reached $65.118 billion, an increase of 41% over the same period last year, the highest in 14 years; net profit was $18.936 billion , an increase of 68% year-on-year.
Since the implementation of the iOS 14.5 update in April this year, most of the lost share of advertising such as Snap and Facebook has been wiped out by Apple itself, but a part of such a large volume has finally flowed out, and Google has benefited the most.
Why is this lucky one Google and not other Internet companies? This is determined by the nature of the ads they run.
The biggest difference between Google and Facebook, Twitter and other advertising platforms is that the advertising services provided by Google are search engine advertisements, while those provided by Facebook and Twitter are personalized advertisements.
The former refers to advertisements in which advertisers determine relevant keywords according to the content and characteristics of their own products or services, write advertisement content, and place prices at their own discretion. When the user searches for the keyword placed by the advertiser, the corresponding advertisement will be displayed (if the keyword is purchased by multiple users, it will be displayed according to the principle of bidding ranking), and after the user clicks, it will be charged according to the advertiser's bid for the keyword , no click, no charge.
The latter is better understood. It refers to those advertisements that pop up suddenly when users ignore the user's wishes when browsing the page. Of course, the recommended products are those that users have paid attention to before or are in short supply, but it is not that they are disturbing anytime, anywhere. User's excuse.
Under the influence of last year's high base, Google advertising still performed very strongly in the third quarter. Among them, search advertising and affiliate advertising both showed growth resilience higher than market expectations, with year-on-year growth of 44% and 40% respectively, while the original market expected growth was 39% and 31%. According to market research, search advertising CPC increased by more than 25% year-on-year in the third quarter, that is to say, Google search advertising is still enjoying the revenue expansion brought by the premium.
The reason for this, in addition to Google's own great business, is that it has significantly optimized the effect of search advertising through some technical improvements, which has greatly promoted the growth of advertising revenue.
Apple's new information security regulations have weakened the efficiency of personalized recommendation advertising on Facebook and other platforms, so some advertisers will transfer part of their advertising budget to other advertising types in the short term, such as search engine advertising. Based on this logic, Google's search engine advertising will gain more demand for advertising in the short term under the influence of Apple's new information security regulations.
The rise of search engine advertising is the result of a combination of factors. Of course, the factors of the advertising platform itself are very important. What role does the seller play in this process?
In fact, as the price of traffic continues to rise, even if personalized advertising platforms such as Facebook are not suppressed by Apple, sellers as advertisers will soon be unable to afford the high traffic pricing.
Facebook currently has about 7 million advertisers, but daily active users have not grown significantly in the past few years. Simply put, personalized advertising has entered a stage of oversupply, and more advertising costs have been transferred to sellers.
Therefore, Apple's new information security regulations have only played a catalytic role, and it is only a matter of time before Facebook's collapse and the rise of search engine advertising.
The consequence of this phenomenon is that advertisers will gradually withdraw from the field of personalized advertising and invest resources in other forms of advertising such as search engine advertising. In response to the current situation, Google also took advantage of the situation to propose a "cost reduction and efficiency increase" style of advertising scale, automation and process optimization.
The current sellers often fall into a misunderstanding: they are often entangled in the acquisition rate of new users, while ignoring the re-operation of old users.
According to the marketing theory of Philip Kotler, the father of marketing, the cost of developing a new customer is 5 times that of maintaining an old customer, and every time the customer churn rate is reduced by 5%, the seller's profit will increase by more than 25%; from reality From this point of view, it is more cost-effective for sellers to strengthen the connection and cooperation with old customers than to develop new customers.
As previously analyzed, Google has achieved another success in search advertising business, and Facebook has suffered from Waterloo due to personalized advertising, which reflects the increasing importance of users to information security.
The general trend of the industry is such that sellers need to accept and digest it in the shortest possible time. In addition, Google's excellent performance also includes advertising costs from private domain platforms, which in turn shows that Google's crawler logic is helpful for sellers to gather private domain traffic.
Of course, no matter whether the seller chooses search engine advertising or other types of advertising, it must be clear that advertising is only a marketing method in the end, and it requires high-quality products or services to really make intended customers place an order and pay. , Gather private domain traffic, with the goal of forming the seller's own ecological closed loop.
This returns to a common topic. It can be seen from previous cases that even giants like Apple are now starting to build their own private domain traffic. Small and medium-sized sellers are the most powerful in the cross-border e-commerce industry. On the thin part, there are third-party platforms such as Amazon that are coveting them, and there are competing sellers fighting against each other. It is out of date to imagine working and living for the platform as before.
Because the policy risks of the platform are also increasing day by day, such as the title storm in mid-2021, it may make a comeback. If you cannot attract private domain traffic, it will be difficult for consumers to develop brand dependence, and it is impossible to gather core users. Therefore, sellers are actually in a relatively dangerous situation, which is also an important reason for the rise of small and medium-sized sellers building independent stations in the past two years.
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