[Chen Jiao’s point of view] For the fledgling Dangdang, the wisest decision is not to cut off search advertising, but to maximize the use of search advertising, improve the conversion rate, and improve the user experience to bring more search traffic. Visitors settle down. This should also be a choice for e-commerce companies such as Joyo, Dangdang, and JD.com.
Recently, Dangdang CEO Li Guoqing broke the news: starting from April 1, 2011, Dangdang will completely stop Baidu advertising and search engine placement. After hearing the news, I felt a little sweat for Li Guoqing - Baidu has always been the most important promotion channel and the largest source of traffic for Dangdang. Is "weaning" really so free and easy?
According to data from the Alexa website traffic statistics platform, Dangdang’s traffic from search engines accounts for about 13%, which is almost the same as the proportion of Sina, the largest domestic content website. Judging from the trajectory of visitors, approximately 18% and 17% visited Baidu respectively. In other words, Dangdang’s traffic is extremely dependent on Baidu. In fact, there is only one platform in China that is less dependent on Taobao, but even so, traffic from search still accounts for 6% of Taobao's traffic.
To be sure, search engines, with almost 100% netizen coverage, are still the largest entrance to e-commerce. The reason why Taobao blocks Baidu is not because Baidu cannot bring traffic to Taobao, but because Alibaba considers competing with Baidu, and Taobao has been frantically looking for traffic sources to replenish the traffic after "weaning" There was such a vacuum that Jack Ma abandoned his vow to "not do business with companies related to Zhou Hongyi" and started buying traffic from 360.
We can imagine what will happen to Dangdang after April 1st.
First, the traffic from Baidu’s precise keywords will plummet. Judging from Dangdang's financial report, its marketing expenditure in the fourth quarter of 2010 was 21.2 million yuan, which means that it is close to 100 million yuan a year. How much of it was invested in Baidu is unknown to the outside world, but based on Li Guoqing's original words, it was probably "tens of millions."
Secondly, without Dangdang as a competitor, there will undoubtedly be an additional opportunity for many e-commerce companies, including Joyo, JD.com, and even Ctrip, which will not only save promotion costs greatly, but also gain more user traffic and thereby generate marketing returns. Rate increased significantly. As a result, Dangdang is likely to be left behind to a large extent, and at the same time, its market share will be squeezed by its peers. For many years, occupying search marketing traffic channels has actually been both a self-promotion strategy and a containment strategy for competitors. It is a pity that Dangdang has to voluntarily give up this strategic location now.
I guess that, like Taobao back then, Dangdang will definitely launch new traffic import solutions, such as spending money on other traffic sources. However, once the new traffic system does not achieve a high conversion rate, Dangdang will face the embarrassment of riding a tiger. Looking at the current traffic channels, the prosperity of e-commerce has generally made its traffic prices rise. In comparison, Baidu is undoubtedly the most stable and secure one. Dangdang, which does not have Taobao's general monopoly advantage, has many variables to follow Taobao.
Dangdang's financial report shows that the company's net profit dropped by 33.2% year-on-year in the fourth quarter of 2010. By cutting Baidu's promotion budget, Dangdang may be able to increase profit margins in the short term. This is also the main reason for Dangdang's decision. But Dangdang must face a severe test.
In fact, for the fledgling Dangdang, the wisest decision is not to cut off search advertising, but to maximize the use of search advertising, improve the conversion rate, and accumulate visitors brought by search traffic by improving the user experience. Come down. This should also be the choice of e-commerce companies such as Zhuoyue, Dangdang, and JD.com.