Active users: By the end of 2017, Weibo’s monthly active users had grown to 392 million. The figure was up 79 million from the end of the previous year. The report also showed a significant trend in the way Weibo users accessed the platform, with 93% doing so through mobile devices. In addition to a rise in monthly active users, Weibo’s daily active users also increased to 172 million.
Revenue : Weibo’s 2017 financial results exceeded the company’s expectation, with revenue for the fourth quarter totalling $377.4 million. This figure helped them reach a significant financial milestone, with yearly revenue surpassing $1 billion for the first time in the company’s history. As a result, Weibo enjoyed a significant 75% rise in revenue from 2016.
Advertising and Marketing: Weibo’s revenue figures in the fourth quarter of 2017 were driven by advertising and marketing, which accounted for $332.3 million during this period. In keeping with the substantial increase in overall revenue, this is a 77% increase from the fourth quarter of 2016. Advertising and marketing revenue from small and medium-sized enterprises and key accounts were vital to this growth, accounting for $294 million. Whilst the number of key accounts enjoyed substantial growth, up 34% year-on-year, Weibo took huge steps in monetizing these accounts and, year-on-year, revenue jumped 106%. A final key area of growth for Q4 came in the number of advertisers on Weibo, which enjoyed a 31% increase year-on-year.
Media Posting: In line with Weibo’s expectations that short videos will become the primary avenue of communication for users, short video posts in December 2017 increased 50% year-on-year. The platform worked with 300 more multi-channel networks in Q4 2017 compared to Q3. This meant Weibo had 1300 MCN partnerships by the end of 2017.
What is Weibo?
In 2009, as foreign companies like Twitter and Facebook were looking to gain a foothold in the Chinese social media market, the foundations were laid for China’s ‘Great Firewall’ and access to the sites within the country was blocked. The virtual blockade, still in place today, has claimed a number of other foreign social media victims since. But it also opened the door for Sina Corp to establish its China-based social media service to fill the void, and in August 2009 Weibo was launched.
Weibo, which literally translates as ‘micro-blog’, quickly lured a number of celebrity users to its platform, helping accelerate the growth of its user base. By mid-2011, the site had expanded to 100 million users, but trouble lay ahead. Due to a combination of controversies, including questions around the authenticity of its user numbers, and the explosive growth of Tencent’s WeChat, Weibo’s growth stalled.
By late 2014 many observers predicted the site was nearing its end, but since then Weibo has undergone a massive recovery and reinvigorated its growth in revenue and active users. To cap this recovery, in mid-2017, Weibo hit another milestone as its user numbers overtook Twitter’s.
Although it started life as an almost exact replica of Twitter, Weibo has pre-empted its US counterpart in launching a number of additional features; including quoted retweets, comments, and photo posts. Customizable pages for commercial accounts have also established Weibo as one of the most attractive platforms for digital marketing in China.
During its development, Weibo has diversified by introducing features inspired by other popular media platforms. Video editing, recording and hosting capabilities, advanced photo sharing, and more of an emphasis on user-to-user communication make it a multi-functional social platform. As a result, it is now less often referred to as China’s Twitter and more as China’s Twitter, YouTube, Instagram and Facebook rolled into one.
Weibo introduces Weirenwu
Weibo offers an abundance of opportunities for brands looking to develop a digital strategy in China. Key opinion leaders (KOLs) are one such option. KOLs on Weibo fulfill an important role when it comes to digital marketing in China. The use of influencers in a digital marketing strategy is standard across social media networks, and Weibo has long been considered a key component of a successful digital marketing strategy in China. However, changes enacted by Weibo at the end of 2017 have created issues for brands and influencers alike.
As part of a strategy to accelerate the monetization of Weibo, the platform introduced a service branded Weirenwu, or ‘Micro-tasks’, in order to control the dissemination of content by KOLs and extract more revenue from the process.
Prior to the change, brands and influencers—often assisted by a third party agency—agreed the terms of their partnership amongst themselves and used the site to promote their content. Now, if creative content is not loaded and approved through Weibo’s Micro-tasks system it will likely be blocked or removed from the site.
The problem? Weibo charges a 100% commission to manage the process.
As part of the process, brands wanting to utilize influencers on Weibo have to declare the fee to be paid to the KOL, from which Weibo’s commission is calculated. For an agreement that would pay the KOL 5000rmb for a branded post, the brand now forks out 10,000rmb. Weibo pays half to the influencer and pockets the rest.
Speaking on the China Tech Talk podcast, Elijah Whaley from KOL agency PARKLU says the issues with this new process are plentiful. For brands whose digital strategy involves utilizing influencers on Weibo, the cost of their digital marketing goes through the roof. This cost also discourages new content creators from focusing their business on Weibo. In addition, due to the nature of the system, submitting creative content through Micro-task reduces its resolution and thus its quality.
Despite these difficulties, KOLs on Weibo remain an important communication tool for brands engaged in digital marketing in China. The enormous potential consumer base the platform promises, and, according to Whaley the sheer volume of content produced on the site, make it too much of an attractive prospect to abandon.