Sina Executives on Weibo Monetization:Sponsored Stories Ten Times More Efficient than Display Ads

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The general manager of Sina’s business strategy, Ai Yong, and spokesperson, Liu Qi, talked about Weibo monetization in an interview lately. It sounds like Sina wants to convince us that, unlike what we thought about, the Weibo advertising business doesn’t cannibalize that on its portal, and that Sina is technologically capable of building workable advertising platforms.

Sina management once acknowledged that Weibo ads had been bundled with portal ads in contracts between brands and Sina portal before Weibo started selling display ads separately. It was perceived that brands wanted to dump portal adverts which weren’t that effective and shifted to Weibo. Sina executives, however, said in the interview that brand advertisers didn’t fancy the Weibo platform and small businesses would be their major Weibo advertising customers.

Never being a tech-driven company, Sina wasn’t considered as having made a good product or figured out good monetization approaches by mining user data or building powerful advertising platforms. Mr. Ai kind of acknowledged that Sina wasn’t strong on technology but they were not worried about it in terms of monetization, saying “there may be gaps in user-facing products in terms of technology, but I think most companies are at the same starting line in technology when it comes to monetization.”

 

image credit: pay.sina.com.cn

Below are some details the two gentlemen told media.

Weibo are for SME Advertisers.

When it comes to display ads, Weibo platform is aimed at small- and mid-sized enterprises (SMEs) and CPA-based, while Sina news portal advertising is mainly for brands and CPM-based.

Most of the current 260 thousand enterprise edition users are not brand advertisers they previously had with the news portal. The SMEs will be the major force they’d serve on Weibo and there is great potential in advertising in this group.

To educate small businesses, the company held over ten events in a variety of cities to promote Weibo marketing and is building regional teams to support local businesses with Weibo marketing like what Baidu built for search marketing.

Sponsored-story Ads are Ten Times more Efficient than Display Ads.

The newly launched sponsored-story ads are charged based on how many users have seen the story. They are testing CPE — cost per engagement — ads that will charge fees according to how many times a post is forwarded, saved or a link included in the post is clicked on.

The effect of news feed ads is ten times better than the display ads placed on the right side of a Weibo user’s homepage. Mr. Ai kind of acknowledged that ads mixed in the feed hurt user experience, saying more data and improved algorithms could reduce the impact on user experience to a much lower level as proved by Facebook and Twitter.

That Sina Weibo did selling events for Xiaomi to sell fifty thousand phones and Smart sell vehicles recently was to show enterprises that it’s possible to complete deals on Weibo platform, but it’s only suitable for well-recognized brands or products, said Ai. It is generally perceived that what matters isn’t how much money Sina could earn from the two cases but the users they lured to its own payment platform. It is reported that more than one hundred thousand users signed up to Sina’s payment service, Weibo Wallet, in the Xiaomi case.