Sina Weibo Begins Placing Sponsored-story Timeline Ads

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It is found that paid posts, labeled as “sponsored”, appeared in the news feed of Sina Weibo today, which is long-awaited as its management mentioned it long time ago. It’s a self-serve system that is open to any user, not limited to businesses, as described by its CEO, Charles Chao, on the latest earnings conference call. No such posts found in the news feed of the mobile versions, so far.

A Weibo post labeled as “sponsored”.

The company launched a handful of services for monetization, including a display ad system and Micro-task. The company recorded 20 million dollars as Weibo revenue in the third quarter of 2012, but that’s far from enough, given the high expectations and hundreds of millions dollars in cost. Even worse, the daily active user rate was only 4%  in the first week of December 2012, according to a survey conducted by iResearch. Charles Chao, announced a restructuring of management at the very end of 2012, assigning its former mobile division head to lead the Weibo team and Chao would focus on Weibo as well.

Third-party Weibo Marketing Agency Sees Business Shrink

Weiboyi, one of the well-performing Weibo marketing services, told media lately that its revenue decreased by 30% – 40%, and partnered Weibo accounts reduced by 20%, thanks to Sina Weibo’s moves to suppress third-party social marketing agencies on its platform in 2012

While building its own revenue sources, Sina Weibo tried to have third parties who had been making money from content marketing surrender to it. In March and April, Sina announced to “clean” fake fans of those famous marketing accounts’ and adverts they posted. In September Micro-task, a marketing system similar to what Weiboyi built, was launched; in December, those third parties were asked to join in the Micro-task program and hand in 30% of future revenues, or they couldn’t send out links included in Weibo posts.

Weiboyi-style third-party Weibo marketing companies partners with celebrities or Weibo accounts with considerable numbers of fans to post and distribute ads. Theyreceive payments from advertisers and share revenues with partnered accounts.

Weiboyi started as a mobile micro-blogging service in 2009. Almost all independent micro-blogging products failed back then, for reasons from operation to regulation. After Sina Weibo managed to get traction, the company changed the direction to where Xu Yang, its CEO and one of the first sales people at Baidu years ago, was good at — online marketing. Before long, hundreds of, if not thousands of, Weibo marketing agencies emerged, for it wasn’t hard to sense such a business opportunity given Sina Weibo became the hottest online service then, and other players, Tencent, Sohu, Netease, among others, joined in.

I got a chance to visit Weiboyi in March 2012. The Beijing-based company had one hundred employees. At that time the company was doing well that just finished big cases for 360Buy, Meilishuo and also had orders from small businesses. Mr. Xu was confident the market would grow even bigger, but sensed that Sina Weibo wouldn’t be that open for it limited API use then. What was unexpected was Sina reached to those marketing companies pockets after having gained little from other monetization approaches. Some social marketing veterans began trying out new platforms such as Tencent’s Weixin as Sina Weibo isn’t such a good market as before.