Stronger by Paying Salaries and I Have 1 Billion Employees

”Boss, the Toutiao creator platform includes four modules: creator incentives, content quality improvement, user growth, and monetization. We’ve also added a credit score system and violation penalties.”

In a spacious and bright office, Liang Bo spoke slowly.

A large screen directly in front of them displayed the creator tiers and their corresponding benefits.

Chen Yansen nodded slightly, motioning for Liang Bo to continue.

’To put it bluntly, the underlying logic of this thing is identical to FoxTao’s. At its core, it’s all about the redistribution of traffic and profits.’

’Take FoxTao, for example. It’s essentially a shopping guide e-commerce platform, what you might call a traffic intermediary, that provides shopping guide services to users.’

’For an item priced at 100 yuan, the merchant might set a 60% commission. FoxTao only releases 40%, so the buyer gets a 40 yuan rebate upon completing the order. Ah Li takes 10% of the total commission as a technical service fee, leaving the remaining 14 yuan as the platform’s pre-tax revenue.’

The Toutiao creator platform that Liang Bo designed basically adopted FoxTao’s revenue-sharing model for its monetization.

It divides advertising revenue into two parts: one to reward content creators and the other to be kept as project profit.

”Incentives for high-quality, original content can be divided into two parts: traffic rewards and cash rewards...” Liang Bo continued.

”Once the feature goes live, self-media articles will flood the platform. How will we determine if the content is high-quality and original?”

Chen Yansen interrupted Liang Bo, cutting straight to the heart of the matter.

”I’ve considered that. We’ll launch an originality-check system at the same time. It’ll use a hybrid review process with both automated tools and human moderators to reduce the prevalence of plagiarism, article spinning, and low-quality content.

Furthermore, for a piece of high-quality content, the higher the clicks, read-through rate, engagement, and time on page, the better.”

Liang Bo was clearly prepared, answering without a moment’s hesitation.

”That works. As for the traffic allocation mechanism, let’s use the plan we discussed last time. We’ll start with a small-scale test run, select the content with the best performance data, and then push it into a larger traffic pool.”

Chen Yansen said calmly.

”Understood, Boss. Next is the ad revenue sharing system.” Liang Bo clicked the mouse, changing the slide on the screen.

Regular Creator: 0.5 yuan per 1,000 reads;

Premium Creator: 1 yuan per 1,000 reads;

Top Creator: 1.5 yuan per 1,000 reads.

In addition to the basic ad revenue share, there would also be various bonuses for high-quality content, with rewards ranging from 0.3 to 3 yuan per 1,000 reads.

”Have you had the finance and data departments run the numbers? Will the ad revenue cover our costs?” Chen Yansen asked.

”No problem, Boss. Last year, CPM rates in the advertising industry were between 2 and 10 yuan per 1,000 impressions. With a conversion rate from impression to read of only 10% to 20%, our actual payout ratio is between 5% and 20% of revenue.”

Liang Bo said with a grin.

’Chen Yansen did a quick calculation. A piece of original content with over 100,000 reads would earn the author anywhere from 50 to 450 yuan. It wasn’t a huge amount, but back in 2012, it was still incredibly appealing to self-media creators.’

”Huang Zheng is currently building the Pinbei Alliance. Once he has it up and running, you can talk to him about adding a product recommendation module to highly relevant content. That should further increase profitability.”

Chen Yansen added casually.

The Pinbei Alliance was analogous to programs like Ali’s Mother, Jingtiao Ke, and the Suning Alliance, serving as Pinbei’s official affiliate marketing platform.

The only reason it hadn’t been created sooner was that they were too busy. But as Pinbei’s business expanded and they had enough manpower, Huang Zheng immediately prioritized the development of the Pinbei Alliance.

For one, it would bring in external traffic, breaking through their growth bottleneck. For another, it would consolidate long-tail traffic, tapping into latent consumer demand and converting that traffic into actual purchasing power.

Platforms like FoxTao, Mogujie, and Meili Shuo, for instance, provided a steady stream of third-party traffic for Taobao and Jingdong.

If Pinbei continued to go without one, it would lose out on at least 5% to 10% of its sales.

For the merchants on Pinbei, it would mean being able to increase conversion rates and expand their sales channels through targeted promotions.

Once the Pinbei Alliance was established, Pinbei’s merchants could participate in branded group-buying campaigns on platforms like FoxTao, Mogujie, and Meili Shuo, or post product recommendations on What’s Worth Buying to gain more off-site traffic and sales.

Moreover, Pinbei would be able to charge a 10% technical service fee, in line with standard industry practice.

”Okay, I’ll discuss this with Mr. Huang later.”

Liang Bo replied in agreement.

”Get this online as soon as possible. If we keep relying on data feeds from Penguin, Sina, and Sohu, it’ll be difficult for Toutiao to ever grow.”

Chen Yansen stood up and patted Liang Bo on the shoulder.

Generally speaking, the content on a news portal or information platform consists of three main types: UGC (User-Generated Content), BGC (Brand-Generated Content), and PGC (Professionally-Generated Content).

BGC is equivalent to the official brand accounts on Weibo, while PGC comes from traditional sources like newspapers, journals, and broadcast media, resulting in more professional and polished content.

A good balance between these three is crucial; all are indispensable.

If the proportion of UGC is too high, the platform’s content quality becomes inconsistent and misinformation runs rampant. If the proportion of PGC and BGC is too high, engagement suffers, leading to low user stickiness.

Chen Yansen decided to leave it up to Liang Bo to strike that delicate balance.

At 6:00 PM, the creator section of Toutiao went live. In just one hour, it racked up over three million page impressions, attracting a massive amount of attention from content creators.

Earning a share of the platform’s ad revenue based on readership was hardly a new concept in 2012. NetEase, Sina, and Sohu had all implemented similar policies back when they were running their blog platforms.