The author | He Yueyang
Edited | Jasin
After experiencing the "storm" of 2021, Weibo finally handed over the annual report card.
Weibo's annual report shows that the size of users increased by 10% year-on-year, with revenue of US$2.257 billion, an increase of 33.6% year-on-year, and net profit attributable to the mother of 428 million US dollars, an increase of 36.7% year-on-year.
Judging from this set of data alone, this is a relatively solid report card.
However, the B side of Weibo is that behind the data is facing risks such as peaking user scale, industry supervision, and declining macroeconomic growth, which point to the future of Weibo, that is, the growth is worrying.
01 Can users still grow?
The first indicator that reflects weibo's steady development in 2021 is the size of users, an increase of 10% year-on-year. The annual report says this: The monthly active users in December 2021 were 573 million, a net increase of about 52 million users year-on-year.
Vertically, the monthly active activity of 573 million hit a new high, stretching the timeline, and we will see that in the first quarter of 2020, due to the impact of the epidemic and working from home, the monthly active activity has reached 550 million, and in the second quarter of 2021, this figure is 566 million. In contrast, 573 million monthly active people are not stable.
The number of users, the future may not necessarily follow the upward trend. By the end of 2021, there are 1.032 billion netizens in the mainland, considering that Weibo is not a social necessity, nor a leisure essential, nor a shopping essential, it is difficult for middle-aged and elderly people in the sinking market to be developed into users, and 573 million monthly active people is already not a low figure.
In other words, the story of user scale growth can no longer be told.
Let's look at user stickiness and activity.
Because Weibo is not a must-have in various scenarios, the daily use time of users is far lower than that of Douyin Kuaishou and B Station, which has a daily use time of more than 80 minutes, and according to Quest mobile statistics, in December 2020 and December 2021, the average daily usage time of Weibo users was 46 minutes and 43.8 minutes, respectively, showing a downward trend.
The length of time weibo users use has a lot to do with the number of hot events and the degree of "explosion".
Zheng Shuang, Hua Chenyu was exposed to have a baby, Wu Yifan collapsed the house, Wei Ya tax evasion, Li Lianglei small essay, when these hot spots appeared, many netizens almost lived in Weibo, as if missing a little news to lose hundreds of millions, as if constantly brushing Weibo can promote the progress of things.
But these events are not concocted by Weibo, and what Weibo can do is timeliness, that is, "discover new things anytime and anywhere". In the "hot" and "explosive" events that Weibo can concoct, it often involves the gray interest chain, the most typical of which is to buy hot searches and withdraw hot searches, and the false prosperity of traffic brought by them.
The market capitalization list pointed out in "Who Is Concocting the Rice Circle Culture" that in the entertainment industry's idol-centered business model, traffic has become an absolute factor to measure the influence and commercial value of celebrities, and in the Weibo ecology, this value is quantified by the number of resents, hot searches, clicks and other data of celebrity Weibo.
This has formed a kind of public secret of collecting money to send stars to hot searches and withdrawing hot searches for stars, and the data can be clearly marked with prices. Caijing once asked Weibo's official business cooperation telephone, and the other party made it clear that the price of the third article of the hot search list was 1.4 million yuan per day, and the sixth article was 1.2 million yuan per day.
These data are also the activity of Weibo.
After the Qinglang Movement, the group in the direction of Douban Entertainment was almost completely wiped out, and Weibo began to reduce the proportion of entertainment content, and the entertainment content also put works first, rather than stars as propaganda points.
Weibo CEO Wang Gaofei said at the performance meeting that the importance of community business in the Weibo ecosystem is getting stronger and stronger, and investment in this regard can promote Weibo social stickiness and activity.
Weibo Super Talk, unlike the Douban Group, Baidu Tieba and Zhihu Circle, is to provide a communication platform for people with the same interests and needs, which is not much different in essence.
Originally, super talk was a star singing the protagonist, and now the super talk content is more diversified, there are a certain area of the examination and research super talk, rent a house super talk, there are also fried steamed bun slices super talk.
When it comes to user stickiness, such as graduate school, renting, these super talk tools are strong, after reaching the purpose, you can go; shopping super talk, planting grass can, pulling grass or jumping out; hobby super talk, such as game stickiness will be stronger.
Overall, these vertical super words are bigger and stronger, the endogenous motivation of hitting the list and rushing the ranking is not strong, and the activity and stickiness are bound to be weaker than the star super talk.
02 Advertising is robust, but the outlook is unclear
The second dimension that reflects the stability of Weibo is profitability. In 2021, Weibo's full-year revenue was US$2.26 billion, up 34% year-on-year, and net profit attributable to the mother was US$428 million, up 37% year-on-year.
Weibo's main source of revenue has always been advertising. In 2021, advertising revenue was $1.98 billion, accounting for 87.6%, with other revenue coming from membership, live streaming and game-related revenue.
In Weibo's advertising revenue system, Alibaba is an indispensable existence, Ali once brought 40% of Weibo's advertising revenue. By 2021, this proportion has dropped to 7%, and Weibo's weakening dependence on Ali is a good phenomenon.
Another phenomenon is that advertisers are decreasing, with 2.9 million, 2.4 million and 1.6 million Advertisers on Weibo in 2018, 2019 and 2020, respectively, and only 600,000 remaining in the first half of 2021.
Correspondingly, average spending per advertiser (excluding Alibaba) is improving, corresponding to $470, $593, $825 and $1379 for the periods described above.
This means that the number of small and medium-sized customers (SMEs) decreases and the number of large customers (KA) increases. Is the loss of small and medium-sized customers and the increase in the average budget of advertisers a good thing or a bad thing? We analyze both the external environment and the advertising industry internally.
First, the development of the advertising industry is highly correlated with GDP.
Soochow Securities combed the 105-year history of global advertising and came to two conclusions:
1. The scale of advertising expenditure is closely related to the level of economic development, and advertising expenditure grows with the growth of GDP.
This is because people's consumption expenditure increases with gdp growth, at this time, advertisers are also willing to spend more advertising expenditure to convert the increase in human income into actual consumption of products and services, and the advertiser's delivery scale will increase.
This is also why the advertising industry is a barometer of the national economy.
2. The proportion of mainland advertising expenditure in GDP is relatively low compared with other developed countries.
Savings is our long-term culture, and Consumer spending in China has always been low. In recent years, high housing prices have overdrawn some of the spending power of residents.
The economic goal in 2022 is to maintain 5.5%, and many years have passed since the rapid growth of 8% that we remember, and the development of the macro economy determines that the life of the advertising industry will no longer be thriving.
Second, the structural changes in the industry, is the east wind overpowering the west wind or the west wind is more intense?
Ads are divided into brand ads and performance ads.
The former is to occupy the minds of consumers with high-frequency exposure and characteristic high-frequency advertising words, aiming to establish a brand image, but it is far from the final purchase behavior of consumers, and the results are generally difficult to quantify. The latter is placed at the stage closest to the consumer's purchase behavior, and the short-term effect is better.
Of course, as marketing tools and processes become more complex, the difference between the two is getting smaller and smaller, and it is not a black-and-white relationship.
However, it is clear that Weibo is longer than brand advertising, because its own e-commerce closed loop is missing, and open-screen advertising and Weibo hot search are also more suitable for brand advertising.
From March 1, 2022, the "Provisions on the Recommendation and Administration of Internet Information Service Algorithms" began to be implemented, which stated that algorithms must not be used to manipulate the list to control hot searches, which undoubtedly put a tight curse on Weibo.
In terms of performance advertising, Weibo's competitiveness is weak. For example, its information flow advertisements are full of advertisements for dental implants, hair transplantation, and acne removal, which are high unit prices and poor repurchases, and the short-sighted psychology of "slaughtering one is one" makes them have to cast a wide net and be willing to spend money on marketing.
Such a combination has a strong ability to resist risks in the current environment, so weibo's growth rate in 2021 is eye-catching, but it is also equivalent to cutting off an arm.
In the short term, Guosheng Securities believes that there is still uncertainty in the advertising industry, and considering the higher growth rate in 2021, it is expected that the growth rate will slow down in 2022. Guotai Junan Securities also believes that in terms of advertising and marketing, the overall outlook for 2022 is expected to be less optimistic.
03 Content, customer acquisition and e-commerce
For a "social + content" platform like Weibo, sufficiently rich content construction is the basis for keeping customers on the platform.
In terms of content, after the reduction of cultural and entertainment categories, Weibo will increase investment in other vertical categories, specifically games and sports events will be the focus.
Weibo revealed in last year's third quarterly report that it will vigorously develop the e-sports industry, form a team and hold events, and in August, Weibo acquired an e-sports team to promote commercialization in the upstream and downstream layout of the game.
Last year's EDG won the championship, and the various operations of fans also proved that the stickiness of users in this field is extremely high.
In addition, Weibo's topics during the Winter Olympics also contributed a huge amount of traffic. According to the winter Olympics viewing report released on February 25, Weibo, the total number of related topics read reached 469 billion. In the future, sports and related events will also be an important point of power for Weibo.
In terms of customer acquisition, Weibo said that it will pay more attention to the balance between user acquisition costs and user monetization, focusing on improving the ROI of channel user acquisition and keeping user acquisition costs within a reasonable range.
As the number of Weibo users increases, and users gradually peak in Internet surfing time, the incremental cost of new Weibo customers, that is, the absolute value, will only get higher and higher, and what Weibo can do is to increase the value of individual users.
E-commerce is a direction of choice.
According to the research report of Guosheng Securities, Weibo plans to upgrade its products for Weibo small shops in 2022, and some industries try to do closed-loop transactions, and e-commerce investment may increase.
On the one hand, this can improve the value-added business income of Weibo, on the other hand, after forming a closed loop of e-commerce, it is also conducive to attracting small and medium-sized enterprises that value performance advertising.
Weibo e-commerce has been opened as early as March 2020, and it has been nearly two years since then, and there has been almost no sound.
In terms of e-commerce, there are not many opportunities left for Weibo, Douyin and Kuaishou have formed a stable content ecology, the closed-loop ecology between users, advertisers and creators has also tended to be stable, and WeChat video accounts have natural user and resource advantages in WeChat sites.
Weibo has lost the first-mover advantage of e-commerce, if it only relies on the number of users, and does not provide better services in logistics, payment, guarantee, after-sales and other aspects, there is no way to have a place in e-commerce.
Overall, in terms of revenue, Weibo has a certain ability to resist risks, but it cannot resist the uncertainty of macroeconomic and advertising industry supervision.
In terms of profits, advertising is a high gross margin industry, in 2021, Weibo's comprehensive gross profit margin is as high as 82.11%, the layout of games such as the acquisition of teams may not be able to maintain such a high gross profit margin, coupled with increased investment in content and e-commerce, and the implementation of cultural construction fee policies expires, taxes and fees will also rise, and Weibo's net profit margin may decline.