Weibo Taking a Leaf from Facebook?
Earlier this month (August, 2016), Sina Weibo’s stock price experienced a positive jump. The boost came after the social platform released their financial results for Q2, 2016. Despite many commentators forecasting the demise of Weibo, the platform is still being used many netizens (albeit with lower engagement numbers). Weibo’s CEO, Gao Feiyang, put the growth down to a “strong adoption of social marketing”, robust user growth, and an increase in short video and live video consumption.
Weibo’s stock market success can be chalked up to two moves made since the social platform listed independently of its parent company, Sina, in 2014: a search for new profits and developing new offerings for users.
Profits: Weibo’s Reachpocalypse
Unlike its often-cited counterpart, Twitter, Weibo actually turns a profit. Advertising and marketing revenue on platform is up on last year. This is in part due to an increasing number of smaller sized advertisers (earlier this year a cooperation agreement between Alibaba and Weibo ended, which has freed more space for other advertisers) and increasing pressure put upon marketers to spend rather than relying on organic reach.
Starting in 2012, Facebook began to restrict the organic reach of content published by brand pages. By 2014, analysts put the organic reach of brand page content at 6% of their audience, this number fell further for pages with large followings.
After an initial panic, marketers adjusted to the new norm, allocating small amounts of budget to content to “unlock” reach. Facebook’s revenue soared.
Beginning last year, Weibo began to make similar cuts to the organic reach of posts on the platform. On Weibo, the cut to organic reach wasn’t limited to official accounts but any post that was considered by Weibo to be “commercial”. Brand accounts have had their organic reach halved as posts simply do not appear in the feed of many followers. KOLs, bloggers and influencers were also hit by the reduction of organic reach on Weibo.
Weibo collaborations between brands and KOLs now require an extra spend, to be paid to Weibo to ensure success. Chinese bloggers and KOLs have been commanding increasingly high fees for collaborations. Weibo has previously attempted to take a cut of these transactions through providing an automated KOL management system. The system failed as the system was too simplistic and often resulted it many faked interactions and followers.
While the large increase in advertising revenue cannot be entirely attributed to this decision, Weibo restricting organic reach on commercial posts seems to have been a factor in this success. Facebook risked driving marketers off its platform by doing the same in 2012, and while Weibo isn’t in the dominating position that Facebook enjoys, Weibo has succeeded in taking a cut of the marketer-KOL business.
New Weibo Products
Weibo’s initial product wasn’t dissimilar to that of Twitter: a one-to-many, 144 character message. When Twitter announced the introduction of long-form messages, Weibo also followed suit. Where they differ is that there has always been a strong visual element to a user’s Weibo feed, more akin to Facebook than Twitter. Up to nine images can be included in a post, and GIFs are not only supported but have long been encouraged. More recently, just like Facebook’s shift to both live and recorded video, Weibo has been moving to video too.
Weibo’s secret weapon in product development is Yixia Technology, an app developer that specialises in mobile video. Weibo was an early investor in Yixia and have partnered with the developer on numerous projects.
In 2013 Yixia and Weibo launched Miaopai, a short video shooting-editing-sharing mobile app similar to Vine. The app stands alone however has a number of features that work with Weibo’s mobile app. Miaopai was well-placed to capitalise on the increasing capabilities of affordable smartphones in China, riding the trend of the mobile-phone production and consumption of online video.
Weibo and Yixia have recently launched the live video streaming app Yizhibo. Yizhibo lets users stream from their mobile in a similar way to Periscope and Facebook Live. Yizhibo also allows viewers to send virtual gifts to their favourite live-stream hosts. The gifts range from the predictable: sports cars, flowers, shoes, diamond rings; to the more edgy: cartoon vibrators, blow up dolls and syringes. These gifts are bought with real money which currently goes to the performer, however it is assumed that Yizhibo will take a cut of this revenue in the future.
The edginess of the content, something that China’s government censorship has been keeping a close eye on, could potentially prove difficult for advertisers. Periscope and Facebook Live have given some advertisers pause for thought as brands have very little control over the content of a live video. Association with some content might prove embarrassing or damaging for brands. Facebook is actively seeking partnerships from media organisations to create advertiser-friendly live streams and this is something that Weibo seems to be doing too.
Weibo has always relied on the strength of it’s celebrity accounts. The “Big Vs” (verified accounts of highly influential writers) held much influence until a government programme against online rumours clipped many bloggers’ wings. Yizhibo’s promotional strategy seems to similar to early Weibo: get celebrities on the platform, grow the user base, and develop “safe” content that will attract advertisers.
Weibo has managed to stay relevant, despite predictions that Tencent’s WeChat was going to make it obsolete. Weibo has lost “top dog” status among social platforms, however the company’s recent shifts in revenue model and product offering has kept the platform profitable and growing. Weibo’s ability to evolve, both its business model and its product offering mean that the platform is far from dead, but marketers will need to keep sharp to get the most out of the social network.
This story was first published on Halfaworld’s blog, visit us to keep up to date with the latest developments in digital in the Asia-Pacific