Text | Ma Weibing, Shao Lanjie

Edit | Chen Fang

The chaos problem of online education was once again detonated and was criticized by the Central Commission for Discipline Inspection by name, saying that it was a boost in capital Under the circumstances, online education may deviate from education itself. In order to obtain customers, some online organizations advertise overwhelmingly, instead of spending money on improving service quality, and not relying on course quality and teaching effects to attract users. There is fierce competition between the two countries, high customer acquisition costs, and serious internal consumption in the industry. They call for online education to return to education itself as soon as possible.

The fuse is four videos. In these four videos, the same person, one is a mathematics teacher in elementary school who has been teaching all his life in Yuanjiao, and in a blink of an eye, he has been teaching English in Gaotu classes for 40 years. The teacher, then turned into an”expert” of Qingbei Online School, still creating anxiety in the homework help live class, saying”destroy the child” It may be the parents themselves”. These videos are without exception, urging parents to buy lessons.

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The screenshots of the four videos are put together to form a huge contrast , Sparked heated discussion on the Internet. AI Finance Agency found that the”teacher” in the video was not a real teacher at all, but a short video actor. It can be said that this mode of operation of online education is undoubtedly a reappearance of the medicine selling routine of pretending to be an old Chinese doctor.

In addition to false propaganda, there are many chaos in the online education industry, such as false teacher qualifications, institutions running schools without a license, and overlord clauses. The online education industry with a market size of over 500 billion yuan in 2020 is an industry on the cusp. The amount of financing in one year exceeds the sum of the previous ten years , Up to 50 billion yuan, why are there frequent chaos?

The cost of an advertisement is as low as 1,000 yuan

“This is not an isolated case. Before that, I found several online education companies’ advertisements It’s exactly the same.” Shen Qing, who works for an online education company, revealed to AI Finance and Economics that the reason for this phenomenon is that the advertising company of Party B, which is cooperating with online education, entrusted it to the advertising supplier. Came to shoot the same commercial.”Even if you go to Party B to be accountable, it is useless. The entire industry chain is very long. It is not easy to confirm where the leak came from, and Party B will not admit it.”

Dong Hang, who is engaged in the information flow advertising industry, also encountered There have been many advertisements using the same actor, but it is still rare that the four leading companies, such as Yuanjiao, Homework Assistant, Gaotu Class, and Qingbei Online School, use one. Dong Hang revealed that there are two types of K12 educational advertisements. One is the plot type, where actors and actresses recommend each other; the other is celebrity endorsement recommendation, usually a real famous teacher is found.

“If it is the most famous teacher in a certain subject, all four of them will look for her, so I understand.” Dong Hang said, like this time I will be an English teacher and another will be a math teacher. Obviously it was outsourced.

In this regard, AI Finance and Economics asked the four companies of Yuanjiao, Homework Assistant, Gaotu Classroom, and Qingbei Online School why this happened? They were silent and did not respond as of press time.

It is understood that most effective advertisements such as online education are placed on information flow platforms such as Tencent and Toutiao. Although the platform will review the upload, Dong Hang said that if no one reports it, the platform will not take the initiative to hold accountable. These infringing advertisements are also very difficult for the platform to find.

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Inline People can tell at a glance that if the”teacher” only talks about himself in the video, it may be a proxy reuse, that is, after the material is ready, several customers will use it together. If there is an oral broadcast brand, then it will be the agency’s own employees, and the plot will be interpreted as an endorsement advertisement.

A person who provides services for online education brands said that, under normal circumstances, agency companies will pass the shot advertisements to online education companies, but their focus is that the content of this advertisement is No problem, they don’t care who the person in the advertisement is.

Another reason is that the form of online education advertising is changing. In the past, it was normal for companies to spend millions of dollars on advertising, which required relatively high quality. The above-mentioned person said:”The qualitative changes have now taken place. The cost of making advertisements is low, and the cost is controlled very low. It is horribly low. It costs 1,000 yuan to shoot this kind of advertisement, but for large quantities, the advertising agency has to bear the traffic conversion. According to him, many advertising agencies now rent a building and build different types of scenes in different rooms to quickly complete the production of similar advertising content in batches, but online education companies Instead of paying for advertising alone, companies only pay for results.”For example, how many trial users did you bring to me, and the proportion of these trial users who eventually converted to regular courses cannot be lower than that.”

The only thing that online education companies care about is the effect. Dong Hang said, “This type of advertising is often updated, the volume needs to be large, and the number of people reached is large, and it is enough to have a better conversion rate.” According to Dong Hang’s understanding, last year, Gaotu Class signed a contract for 800 million advertising on Toutiao alone, and there may be more actual implementation in the end.

Burning money is a choice that all online education companies have to make. Ape tutoring spent 1 billion yuan in effective advertising in 2020. Together with homework help and learning and thinking, the three companies burned 5.5 billion yuan in advertising in the first three quarters of 2020, twice the amount in the same period in 2019. In addition, the marketing cost of learning with whom is as high as 2 billion yuan, and NetEase Youdao also has 1.15 billion yuan, Good future, New Oriental, etc. are also not low.

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Picture/Photographed by Ma Weibing

According to third-party estimates, the top 10 online education institutions may put more than 10 billion yuan on the summer market in July and August. According to an insider from GSX, “The company’s advertising budget is at least tens of millions of billions every month, because traffic is the foundation of the business.”

Customer acquisition costs are as high as Thousands of thousands

Before the winter and summer vacations, it is a good time for online education platforms to spend money everywhere. Under the epidemic, there is less competition from offline educational institutions, which can be described as the right time and place.”The winter vacation is in full swing, and the ape tutoring and homework help are particularly fierce.” From mid-December 2020, the spring recruitment plan for the online education industry It has been opened. According to Shen Qing, the leading companies have opened the distance of 500,000 users. In order to narrow the gap, competing products have tried their best.

“Currently there are still two years of online education window. All online education companies are facing two difficulties-reducing customer acquisition costs and increasing renewal rates.”New Oriental founder Yu Minhong said in a public speech.

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Shen Qing It was revealed to AI Finance that the cost of customer acquisition is a core secret for each organization, and the cost of large classes and one-on-one is different. Before 2020, the average customer acquisition cost of each company is around 2,000 yuan, but in 2020 Later, with the increase in the volume of delivery, the cost of acquiring customers has risen sharply. The average has reached about 3,000 yuan, and some have exceeded 4,000 yuan. The cost of acquiring customers for real-person one-to-one courses has even reached more than 10,000 yuan.

Therefore, users often see advertisements with great discounts on online education courses in major apps, such as 20 lessons at 19 yuan, a bunch of gifts, and 33 lessons at 49 yuan. Industry insiders analyzed that for online education companies, the cost of these special courses is not worth mentioning compared with the cost of customer acquisition, and it is possible to continue to give money to the courses.

“In the beginning, the customer acquisition cost was very low, about 100 yuan, but with the fierce competition, the customer acquisition cost on today’s headlines has risen to seven or eight hundred.” Dong Hang explained, This customer acquisition refers to consumers who click on the webpage from the advertisement, fill in the contact information, and participate in the trial class, which is called”pull form” in the industry.

“Those ads with particularly stimulating content must be very good to attract customers. He uses the most exaggerated method to attract eyeballs, just like live broadcasts. They must be much better than peaceful content, which also intensifies the entire industry. Here, using this kind of stimulating anxiety, especially exaggerated advertising content.” Shen Qing said.

For the distribution channels, online education companies are not let go, WeChat Moments, Douyin Kuaishou, TV, radio, subway, bus, etc., almost as long as there are parents in the place. Their ads. A person from the Elevator Media Marketing Department told AI Finance and Economics that online education companies are their largest customers in recent years, and the amount of investment in first-tier cities is almost 100 million.

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Picture/Photographed by Ma Weibing

In addition to online advertising, the online education industry’s customer acquisition methods include telemarketing that people hate and helpless.

“Almost every other month, I will receive calls for sales promotion. Unsubscription and interception are useless.” A netizen vomited.”In the beginning, there was still a real person talking to you on the phone. Later several times it was a robot. No matter what you said, I kept reading ads.” Another netizen encountered a more serious situation. She received nearly 100 in just one month. Phone bombing of online educational institutions.

“It’s all because of the pressure of getting customers.” Shen Qing’s company has also used marketing text messages before, and was able to get 3%to 4%of the user share. “It’s not easy for a user to reply to unsubscribe. He will unlock it again after a period of time.” Shen Qing explained that because there are too many complaints from users, there are now fewer marketing messages.

In addition, as the most critical determinant of teachers, it is also an area where online education companies tend to fish in troubled waters. Although the state stipulates that those who have not obtained the teacher qualification certificate, training institutions are not allowed to hire them for subject training, but the reality is that teachers in the online education industry Not all staff have a teacher qualification certificate. There are some people who do not have a teacher qualification certificate who are teaching and educating people. Some of these people are out of hobbies, and some use this as a means of making a living.

“Online education now has a unified requirement for lecturers to be certified, but many companies often recruit college students directly from Qingbei when they promise to implement it.” Shen Qing said.

Chen Lili transitioned from a public school to an online education platform more than a year ago. She revealed that the current online education live courses tend to recruit people who graduated from Qingbei. These people do not necessarily have a high level of teaching. What a wealth of experience. As long as he graduated from Tsinghua University or Peking University, or he was from a competition background in high school, he will be more popular.

Start the last war

Behind the frequent occurrence of chaos in online education, a fact that cannot be ignored is that the capital’s frantic grabbing of this field, a The areas that should have grown slowly have been artificially pulled into fast growth.

The naming criticism of the Central Commission for Discipline Inspection is youthful reason, and the online education platform is fed by money. It is understood that in 2020, online education will raise a total of 50 billion yuan, which is higher than the total financing amount of the industry in the past ten years.

The Tianyancha APP shows that Yuandaodao, founded in 2012, has received 11 rounds of financing totaling US$4.042 billion. The most recent one was at the end of December 2020. The investor was Yunfeng Fund with an amount of 300 million. US dollars; and two months ago, Yuanjiao had just won US$1 billion in financing from CITIC Industry Fund and other institutions; before the end of August, Tencent and Hillhouse Capital invested US$1.2 billion. The six-year-old Job Helper is not to be outdone. It has received 8 rounds of over 3.4 billion US dollars in financing, and the financing amount at the end of 2020 will exceed 1.6 billion US dollars. The investors are Sequoia Capital China, Alibaba, etc.

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The stock prices of listed companies have a bright future, GSX, etc., have been rising all the way. As of January 21, the market value of Good Future is as high as 40.6 billion US dollars, and GSX has 16.679 billion US dollars.

The top online education giants with strong funds spend all their money on the market. From FY2016 to FY2020, Good Future’s marketing expenses have increased from US$74 million to US$853 million, and the proportion of operating revenue has increased from 11.87%to 26.05%. The year-on-year growth rates in the past three years are 92.14%, 99.92%and 76.20%, which are much higher than the revenue growth rate. The same goes for GSX and Youdao. Sales expenses far exceed revenue, and Youdao’s sales expenses account for 128 in total revenue.%, and learn from anyone is not as low as 114%

The cost is greater than the revenue and the online education companies are generally at a loss. On January 21, Good Future released its financial report for the third quarter of fiscal 2021, which turned from profit to loss, with a net loss of US$43.6 million. GSX’s third quarterly report showed a loss of 766 million yuan. GSX founder Chen Xiangdong said that some radical companies will lose more than 7 billion yuan in 2020. Shen Qing revealed that Ape Guidance and Homework had a loss of around 8 billion yuan. With the frantic advertising by various agencies, the customer acquisition cost of the entire industry has been pushed up.”The blow to unlisted companies is even greater. It requires constant blood transfusions to replace the source.”

Online education upstart, Chen Lin, senior vice president and head of education business of ByteDance, said:”In the next three years, we will invest a huge amount every year, and even in the third year, we have no profit expectations.”

In this context, even New Oriental was dragged into a loss. In fiscal 2020, the company’s net profit has fallen sharply, increasing by 17.66 times year-on-year, with a loss of 742 million yuan.

Can online education advertise without burning money? The answer is no. Fang Zhe, who has been researching the online education industry for many years, revealed that he has discussed with some market leaders in the education industry whether it is possible not to advertise, but the other party said that if they do not do advertising, the background data will fall instantly. ,”Brands are now a bit difficult to ride the tiger. They are currently competing for whoever spends the money and who has not spent it, and who can carry it to the end.

Currently, in the K12 field, the leading companies have basically reached the first echelon. , The second echelon is clearly divided, but there is also a significant phenomenon this year that the leading companies are taking money frantically, whether it is financing or going to the secondary market. Fang Zhe believes:”The online education industry is not making money now. It is because the competition is too fierce, everyone is fighting a price war, thinking that as long as the competitors are killed, they will have more possibilities.”

Industry insiders judge that online education will start the last war in 2021.”Now all online education companies have stockpiled a lot of ammunition, because the time for the big battle has already arrived.”Fang Zhe told the AI ​​Finance and Economics Agency,”The battle will be more tense next year, but it is uncertain whether the outcome will be determined.””

“Now it is like the battle between Didi and Kuaidi. Two years later, there may be a merger event, but these investment institutions are currently very capable of making money, and it is not the last moment.”Fang Zhe said that there is no good business model for online education at present, and learning tyrants will not be the only case. There must be a group of companies that may be able to live well now, but will not do well in the future. In this process, there must be very Cruel elimination.

The relevant person in charge of the Department of Basic Education of the Ministry of Education criticized that in order to occupy the leading power of the industry, some online training institutions operated through a money-losing model, squeezing small and medium-sized enterprises and causing unbalanced industry development. , It also faces operational risks. Once the financing fails to keep up, the capital chain is broken, and the company may quickly close down. This is the case for academic masters and excellent education.

This is for the long-term development of the online education industry. Disadvantageously, Zhai Lei, the person in charge of the online children’s English companion fish market, believes that online education companies should try to avoid “price war”-style vicious competition. Only companies with low customer acquisition costs and high retention conversion can achieve long-term development. The quality of teaching and teaching services is the foundation of online education companies. This sentence cannot be overemphasized.”

(Shen Qing, Dong Hang, Fang Zhe, and Chen Lili are pseudonyms in the article at the request of the interviewees)

This article was originally created by the account AI Finance and Economics of the Weekly of Finance and Economics Produced, please do not reprint without permission from any channel or platform. Offenders must be investigated.