Passers-cow suffering from “advertising-dependent” three incentives
Online travel community in the country, the way traditional media advertising volume is one of the largest cattle, and is rising at a rate more than twice per quarter times the insane. In my opinion, passers-cow ads has deviated from the boundaries of reason, suffers from severe “advertising-dependent”.
Advertising sector defines “advertising-dependent”: companies not familiar means of communication in the case, there is no scientific proof, uncontrolled spending substantial costs sustained advertising in various media, phenomena that affect corporate profits and quality of life. Way cows are basically in line with this definition.
Earnings data displayed, way cattle 2014 years II quarter and three quarter of marketing costs increases respectively for earlier revenue increases of 4.71 times times and 2.41 times times, advertising put spending high of media are for TV of hit entertainment program, broadcast and the other traditional media are has large advertising put, worthy of is online tourism within most crazy of advertising main (way cattle 2015 only TV advertising a items of budget conservative estimated in 2 to 300 million Yuan Zhijian). There is no doubt that passers-cow suffered from severe “advertising-dependent”, the core incentives mainly in the following three aspects.
1. empty product innovation
A theory in the economics textbooks call “adverse selection” also known as “reverse elimination”, described the phenomenon can be summed up in five words: on the market, the more “problematic” ‘s main competition will be more active in selling yourself. Passers-cow ads behavior consistent with this crazy situation, “problematic” of its products.
Passers-cow market in order to create and maintain stock prices, launched with much fanfare “sale”, “older than that recommended” so-called new products, such as, and increase it to a strategic height. However carefully research Hou, author found, way cattle so-called of “special sold” exists such as “special sold not specials”, and price system chaos, and resources lack, problem, basic is in play text game, and “variable magic”, surface Shang of “fire” cover has many greatly small of problem, interested in of readers can himself to way cattle officer online personally find a find, certainly will has harvest.
Then say that Yu Dunde personally endorse “things to recommend” series of products, specifically, this thing cannot be described as an independent product, at best, merely emulating Internet “CEO endorsement fever”, basic products are the products, more apparent than real.
Product not “hard”, you can only build momentum on publicity, is highly dependent on advertising “pulls” users. In this way, large-scale advertising for passers-cow has become a kind of “medicine”, as long as their products have been playing virtual, this “medicine” cannot disable it.
2. abnormal low operational efficiency
Passers-cow suffering from “advertising-dependent” should be the root causes of its abnormal low on the operational efficiency of excavation. According to the path listed two earnings reports released after cattle, passers-cow 2014 revenue of $ 716.4 million dollars in the second quarter, compared with an increase of 84.9%, and the increase in marketing expenses for the same period was 399.9%; its third-quarter revenue of $ 1.31 billion yuan, compared with an increase of 85.6%, marketing expenses increased by 206.1% over the same period. According to passers-cow official interpretation of the results, most of the marketing costs for its quarterly ad spending for the brand. It is well known that caliber passers-cow’s revenue accounting is based on transaction flow statistics, if the General modalities for the accounting of revenues in the industry, way cattle each quarter’s revenue growth may be even worse, increases in relative to the increase in advertising and the loss of the gap will be even greater. Reasons leading to this situation are the way the cattle operation in low efficiency, because of this, way cattle had to make continued efforts to increase advertising this kind of extensive ways to pull new users to maintain revenue growth, but the tactic was a “vicious circle”, and a “dead end”.
Earnings data does not look good–increased advertising revenues–no hope – stop – continue to increase advertising … … If you do not change the current pattern of growth, passers-cow would be in such a “vicious circle” trapped in death.
3. ambiguous strategic layout
Passers-cow is another important cause of excessive dependence on traditional advertising strategies vary. Passers-cow listed from the beginning up to now, has not been able to give an investor spirits can future development plans. How to develop wireless? What is the business model of the future? From passers-by in cattle management publicly, I still can not find the answers to these critical questions, investors had the same confusion, which is why the way cattle a month ago to abandon open additional switch to redirect private-access to finance one of the reasons.
Symptom of the passers-cow strategy of fuzzy is that its mobile development lags behind. According to data released powerhouse consulting, passers-cow cumulative Downloads Mobile Android version in November 2014 ranked fourth, but with ctrip, where the top three, the same way the gap is very large, amount of total downloads is less than half the average download the three. This can be seen only, way cattle lacking vision on the management of strategic deployment, whether to develop mobile has been hesitant.
Strategies vague, unresponsive to external environment changes, so crazy expensive advertising is becoming the way cattle make a false prosperity, the only alternative paths to shore up investor confidence.