SOCIAL
Weibo Corporation (WB) Q4 2022 Earnings Call Transcript
Weibo Corporation (NASDAQ:WB) Q4 2022 Earnings Call dated Mar. 01, 2023.
Corporate Participants:
Sandra Zhang — Investor Relations
Gaofei Wang — Chief Executive Officer
Fei Cao — Chief Financial Officer
Analysts:
Timothy Zhao — Goldman Sachs — Analyst
Felix Liu — UBS — Analyst
Xueqing Zhang — CICC — Analyst
Presentation:
Operator
Good day and thank you for standing by. Welcome to Weibo’s Fourth Quarter and Fiscal Year 2022 Financial Results Conference Call. [Operator Instructions]. Please be advised that today’s conference is being recorded.
Now, I’d like to hand the conference over to Ms. Sandra Zhang from Weibo IR team. Please go ahead, ma’am.
Sandra Zhang — Investor Relations
Thank you, operator. Welcome to Weibo’s fourth quarter and fiscal year 2022 earnings conference call. Joining me today are Chief Executive Officer, Gaofei Wang, and our Chief Financial Officer, Fei Cao. The call is also being broadcast on the Internet and is available through Weibo’s IR website.
Before the management remarks, I would like to review the safe harbor statement in connection with today’s conference call. During today’s conference call, we may make forward-looking statements, statements that are not historical facts, including statements of our beliefs and expectations. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Weibo assumes no obligation to update the forward-looking statements in this conference call and elsewhere. Further information regarding these and other risks is included in Weibo’s Annual Report on Form 20-F and other filings with the SEC. All the information provided in this press release is occurring as of the date hereof. Weibo assumes no obligation to update such information, except as required under applicable law.
Additionally, I would like to remind you that our discussion today includes certain non-GAAP measures, which excludes stock-based compensation and certain other expenses. We use non-GAAP financial measures to gain a better understanding of Weibo’s comparative operating performance and the future prospects. Our non-GAAP financials exclude certain expenses, gains or losses, and other items that are not expected to result in future cash payments or nonrecurring in nature or not indicative of our core operating results and outlook. Please refer to our press release for more information about our non-GAAP measures.
Following management’s prepared remarks, we will open up the lines for a brief Q&A session. With this, I would like to turn the call over to our CEO, Gaofei Wang.
Gaofei Wang — Chief Executive Officer
[Foreign Speech].Thank you. Hello, everyone, and welcome to Weibo’s fourth quarter and full year 2022 earnings conference call.
[Foreign Speech].On today’s call, I will share with you highlights on Weibo’s user products and monetization, review the progress made in 2022 and elaborate our strategies for 2023.
[Foreign Speech].Let me start with our fourth quarter financial results. In the first quarter, our total revenue reached $448 million, a decrease of 27% year-over-year or a decrease of 1% quarter-over quarter as marketing activities on Weibo were largely impacted by the COVID factor as well as other major affair. In renminbi term, our total revenue decreased 20% year-over-year and remained flattish quarter-over quarter. Advertising and marketing revenues reached $390.5 million, with 94% of our revenues coming from mobile. Leveraging solid execution of our cost optimization initiatives, our non-GAAP operating income reached $152 million, representing a non-GAAP operating margin of 34%. Meanwhile, non-GAAP net income attributable to Weibo reached $178.5 million, up 50% quarter-over-quarter representing a non-GAAP net margin of 40%.
[Foreign Speech].For full year 2022, Weibo’s total revenue reached $1.84 billion, a decrease of 19% year-over-year or a decrease of 15% year-over-year in renminbi term. Advertising and marketing revenue was $1.6 billion, a decrease of 19% year-over-year or a decrease of 16% in renminbi term. Our non-GAAP operating income reached $601.1 million representing a non-GAAP operating margin of 33%, mainly attributable to our strategic focus on improving operating efficiency since Q2 last year.
[Foreign Speech].On the user front, in December 2022, Weibo’s MAUs reached 586 million, a net addition of approximately 13 million users on year-over-year basis. Average DAUs reached 252 million, a net addition of approximately 3 million users on year-over-year basis. In December, 95% of Weibo’s MAUs came from mobile.
[Foreign Speech].Looking back to 2022, due to the negative impact from macro-environment and the COVID factor, the overall market continued to face challenges and the ad demand showed limited recovery trend. To mitigate through the challenges from ad demand side, we adhered to the strategy to optimizing costs and expenses and improving operating efficiencies throughout the year, adopted a more disciplined ROI requirement for costs and expenses and improve efficiency in product operation. As a result, user engagement was broadly improved, and overall traffic maintained steady growth from the previous year. In 2022, we also made efforts in content control and content distribution for major political affairs [Technical Issues] Weibo’s advantages of resource integration and content distribution for the COVID-related publicity and assistance representing Weibo’s unique social values. Our monetization despite the challenging market environment in 2022 and the volatile ad market with descending trend, we successfully enhanced adoption of our strengthened brand plus performance ad with content marketing solutions among advertisers from automobile, handset manufacturers and online gaming industry that allowed the celebrities, media and KOLs to generate topics and content and combining our hot trend product to create industry [Technical Issues] for clients and distribute them to audience in the vertical areas and thus, [Technical Issues] core competitiveness and risk resistance capability in brand ad market has further strengthened.
[Foreign Speech].Let me share with you our progress made in product and monetization [Phonetic] in Q4 and they are our key initiatives for 2023.
[Foreign Speech].In the fourth quarter, on operational side, we focused on content monitoring and [Phonetic] discussion for major public affairs as well as COVID-related publicity after reopening. And meanwhile, we further optimized the distribution mechanism for relationship-based feed and interest-based feed to improve users’ consumption efficiency. These initiatives contributed to traffic growth in information feed in Q4 on a year-over-year basis.
[Foreign Speech].On the channel front, in Q4, our hot trend [Phonetic] product has fully covered the core position on the devices of leading domestic handset manufacturers, which increased our content consumption of users from a domestic handset. In December, the number of our hot trend users from domestic handset increased 40% from September, which further enhanced the influence of Weibo’s hot trend product among handset manufacturers and strengthened the user consumption of hot trend.
[Foreign Speech].On social attributes, in Q4, we continued to optimize the distribution mechanism and product structure of relationship-based feed, which further increased exposure of high-quality social content to users. Our user and traffic for relationship-based feed picked up rapidly in December and reached the peak level in 2022 [Technical Issues] to the strengthening of the social functions of our products. We also clarified the position of relationship-based feed and reinforced content distribution [Technical Issues] social network in the relationship-based feed. We hope that relationship-based feed can help users with high quality and real social connections for more enriched and diverse social network and encourage high-quality content creator to recognize the value of brands and generate more interaction with other [Technical Issues] the more exposure in the relationship-based feed. During the beta test period for the algorithm upgrade, the impression per user and increased follow-up behavior per user have picked up. This year, we will continue to invest on these initiatives to improve exposure of high-quality content and enhance data [Phonetic] accumulation for valuable content creator for a more enriched social network, so as to further enhance Weibo’s core competitiveness in the social sector.
[Foreign Speech].On the video front, we focused on operation of high-quality video accounts. To this end, we introduced and encouraged video content creators to produce [Technical Issues] and topic based video content to accumulate more presence and also to produce content in the past from photo on daily life for those interactions [Technical Issues], which could further enhance engagement of video content creators on Weibo. In December, both the number of video accounts that generate video and [Technical Issues] grew double-digit year-over-year. And moreover, the optimization of video products continued to improve the [Technical Issues] and video playing experience in the video feed and promoted social interaction on the playback page as [Technical Issues] the effective use of the video feed in December 2022 increased over 50% year-over-year, and the number of users who interact on video playing page increased over 20% year-over-year, which improved the user engagement and increased video ad inventory laying a solid foundation for the video ad revenue growth in 2023.
[Foreign Speech].On the content front, in 2022, we strengthened strategic cooperation with partners, media, entertainment, online gaming and sports vertical and secured the production of IP-related content and hot topics. Coupled with effective execution of our operational strategy, the traffic and number of engaged user in key verticals increased by varying degrees from 2021. On the media front, we reached a full cooperation with [Technical Issues] in content and monetization side. To elaborate, we encouraged media account to lead discussion around here to discuss the social topics on Weibo, facilitated media discussion [Technical Issues] topics to those in vertical areas to ensure the popularity of hot trend in vertical areas. In addition, we motivated media to actively participate in the marketing campaigns on Weibo. With the effect of media endorsement and distribution value, both advertisers’ brand influence and the commercial value of the media were promoted and also [Technical Issues] self-reinforced ecosystem of content distribution and monetization for media account on Weibo. As a result, revenue earned by media accounts scaled up in 2022, up 20% from 2021. In terms of entertainment vertical, we worked with agents to promote content generation and engagement of top celebrities and also worked with video platforms and producers to strengthen the topic generation and discussion around the popular movie and TV series. As a result, the traffic and the number of engaged user in the entertainment vertical resumed [Phonetic] its healthy growth trend consistently.
[Foreign Speech].In response to the overall sluggish end market in 2022, we optimized the monetization model for Weibo’s top content creators and thus, the number of content creators who earn revenue on Weibo increased over 20% year-over-year. In 2023, we will continue to strengthen the monetization for top KOLs to improve Weibo’s marketing capability to serve brands and increase top KOLs monetization skill and improve the engagement on Weibo.
[Foreign Speech].In 2023, we will continue to focus on growing on [Technical Issues], improving operational efficiency to drive up traffic and strengthen the core competitiveness of Weibo.
[Foreign Speech].First on user growth, in 2022 [Phonetic], user engagement around hot trend and entertainment vertical [Technical Issues] as marketing and industry trends gradually improved. For the movie vertical, driven by the blockbuster effect from movies scheduled for the spring festival and TV series early this year, the number of users [Indecipherable] engagement was up 86% year-over-year. And the total engagement volume grew 136% year-over-year and [Technical Issues] 2023, we are working actively with our partners in movies, TV series and variety shows in order to promote the healthy development of the ecosystem around entertainment world. On product front, we will also step up investment in hot trend and thus reinforce users’ mindset of hot topic consumption as well as bolster user growth and engagement. And meanwhile, we plan to resume investment and operation of certain channels and marketing campaigns based on the recovery trend of the market and industry this year, so as to further drive user growth.
[Foreign Speech].Certainly on traffic growth in 2023, we will further focus on strengthening our core competitiveness in hot trends and social attributes and efficiently grow our traffic and the monetization value. On the operational front, we will beef up our efforts to reinforce our content ecosystem in key verticals as well as deepen engagement of social accounts. As for use of product, we are dedicated to further optimizing product structure and distribution efficiency to continue to improve the user consumption. In particular, we’ll broaden the social network coverage for relationship-based feed and nurture the interaction live [Phonetic] within our community products. These initiatives are crucial to solidify our competitive moat in the social product landscape. We’ll further facilitate Weibo’s [Technical Issues] and healthy development in future.
[Foreign Speech].In the fourth quarter, Weibo’s ad revenue decreased 29% year-over-year or 23% year-over-year on a constant-currency basis and flattish quarter-over quarter on constant-currency basis as macro headwinds and COVID disruptions weighed on the overall advertising demand side. Despite the challenging marketing environment, we are pleased to see certain industries sustain an upward trend year-over-year in this quarter.
[Foreign Speech].In the first quarter, there was [Technical Issues] event for many clients, especially in the food and beverage industry [Technical Issues] enhance operation efficiency this year, the traffic and interaction volumes are forecast to pass that of the Beijing Winter Olympics. [Technical Issues] achieve [Technical Issues] growth [Technical Issues] as customer [Technical Issues] in the market. We are pleased to see total ad revenue generated in that World Cup season exceed that of the Beijing Winter Olympics, especially notable ad growth of the food and beverage industry on a year-over-year basis. Ad revenues from automobile industry also took the year-over-year growth benefiting from better recognition of the new car launch among the industry clients. And meanwhile, we successfully introduced the new product launch model with handset sector, which delivered double-digit year-over-year growth in Q4 despite a weak market environment of the handset sector throughout the year. For instance, we showcased our content marketing solution with the launch of Vivo X90. From the phase of pre-launched product release [Indecipherable] digital product industry, vertical KOLs capable of breaking the limitation of [Technical Issues] as well as media to generate [Technical Issues] client-specific topics. [Technical Issues] hot topic effect of the World Cup, we delivered brand recognition beyond the clients’ expectations. Top views related to the new Vivo X90 exceeded 2.5 billion. Once again, we showcased Weibo’s unique value proposition with our content marketing solutions and service capabilities in turning a new product into a blockbuster to our clients in the handset industry.
[Foreign Speech].Beyond advertising, we have been monetizing our traffic through multiple channels, such as membership and e-commerce, to amplify the commercial value of the platform. Social e-commerce has always been an integral part of Weibo’s content ecosystem and also the key monetization channel for [Technical Issues] in 2022, in addition to ongoing ad collaboration with Alibaba and JD.com, we also tapped into the closed loop e-commerce, starting with the aesthetic medicine, industry which enjoys a relatively high [Technical Issues] featuring KOL live streaming on our platform. In 2022, [Technical Issues] for the aesthetic medicine e-commerce business on Weibo doubled from the previous year. Currently, although the contribution of revenue and profit from [Technical Issues] e-commerce business is not material at this stage, the combo of online promotion and offline conversion could be replicated to more similar industries in the future upon the trial and error with the aesthetic medicine e-commerce business. It will also help further strengthening users’ mindset of e-commerce on Weibo, facilitating monetization growth of [Technical Issues] as well as providing a strong support for the long-term ad monetization opportunities.
[Foreign Speech].Let me share some color on overall monetization strategy in 2023. We will continue to focus on enhancing the marketing [Technical Issues] which centers around media and celebrities reported by KOL distribution across verticals while underpinned by traffic context, [Technical Issues] social and Mindsight [Phonetic] cultivation. In particular, [Technical Issues] Weibo’s unique hot trend IP and new product launch ad offerings aiming to earn recognition from more industries and customers and thus further strengthen Weibo’s core competitiveness in the ad market.
[Foreign Speech].Based on Weibo’s [Technical Issues] overall advertising [Technical Issues] gradual recovery trend month by month. Nevertheless, due to the outbreak of COVID-19 in various regions and spring festival, [Technical Issues] time for clients to gradually return to normal life and work, although the country has passed [Technical Issues] faster than expected, most companies do need time to determine on the overall marketing plans for 2023. Recently, we are glad to see the issuance of a series of favorable economic and industry policies. However, we may have to wait a while for full recovery on ad demand side since it takes time for the policy implementation to [Phonetic] macro-economic rebound and then to pick up [Technical Issues] by industry with the tailwinds of favorable policy and the stable recovery of the consumer market, the automobile and luxury industry, which had nice growth in 2022 are expected to deliver positive growth in 2023. Hopefully, ad revenues from the cosmetic industry may resume growth in the second half of this year, assuming new product marketing campaigns in the cosmetic industry come back that time. In 2023, we will strengthen Weibo’s capability of capturing ad budget in the cosmetic industry through optimizing the marketing models, featuring celebrities, new product and shopping festivals. As for the online gaming industry, we still have room for further revenue growth with the resumption of the gaming license issuance. In addition, we are also excited to see opportunities for certain industries, such as tourism and real estate, to recover following the economic rebound.
[Foreign Speech].In [Technical Issues] industry, on ad products front, leveraging Weibo’s strength in content marketing, we will step up our efforts to drive sales and ad performance of hot trend ad product and maximize the monetization efficiency of hot trend-based traffic. And meanwhile, we’ll also continue to explore and expand the targeting audience package and improve its reach accuracy and conversion, particularly for industries such as automobile, tourism, real estate and home furnishing that require lead generation. We will further strengthen the synergy between user and ad product to enhance users’ social interaction around ad, aiming to elevate our capability as opportunities to reach users in multiple scenarios and optimize the conversion cycle of our social ad offerings as well as conversion results.
[Foreign Speech].With that, let me turn the call over to Fei Cao for financial review.
Fei Cao — Chief Financial Officer
Thank you, Gaofei and hello, everyone. Welcome to Weibo’s fourth quarter and fiscal year 2022 earnings conference call. Let’s start with user metrics in December 2022. Weibo’s MAU and average DAU reached 586 million and 252 million respectively, representing a net addition of 13 million and 3 million users on year-on-year basis in 2022. Our user community and engagement remained healthy [Technical Issues] we executed well a disciplined channel investment strategy with 21% cut in the sales and marketing expenses versus 2021.
Turning to financials. As a reminder, my prepared remarks will focus on non-GAAP results. All monetary amounts are in U.S. dollar terms, and all the comparisons are on a year-over-year basis, unless otherwise noted.
Now let me walk you through our financial highlights for the fourth quarter and fiscal year 2022. Weibo’s fourth quarter 2022 net revenues were $448 million, a decrease of 27% or a 20% on a constant currency basis. Operating income was $152 million, representing an operating margin of 34%. Net income attributable to Weibo reached $178.5 million, representing a net margin of 40%. Diluted EPS was $0.75 compared to $0.83 last year. For full year 2022, total revenues reached $1.84 billion, a decrease of 19% or a 15% on a constant currency basis. Operating income was $601.1 million representing operating margin of 33%. Net income attributable to Weibo reached $540.1 million, representing a net margin of 29%. Diluted EPS was $2.27 compared to $3.08 in 2021.
Let me give you more color on the fourth quarter and the full year 2022 revenue performance. Weibo’s advertising and marketing revenues for the fourth quarter 2022 were $390.5 million, a decrease of 29% or a 22% on a constant currency basis, reflecting the disruption from COVID resurgence and the volatile advertising market [Technical Issues]. Mobile ad revenue was $367 million, contributing approximately 94% of total ad revenues. Full year 2022 advertising and marketing revenues reached $1.60 billion, a decrease of 19% or 16% on a constant currency basis with mobile ad revenues contributing 94% of total ad revenues.
Recording on Q4 performance first, consistent with our expectations, Q4 advertising revenue remained under pressure from weak demand side, resulted from uncertain macro landscape and sales execution challenges and with the COVID back. In terms of growth, food and beverage was one of the major positive contributors to year-over-year growth in Q4. With customer embracing the [Technical Issues], we’re also delighted to see solid growth in 3C products, automobile and entertainment sectors. As our customers from these sector leveraged our social ad playbook to build [Technical Issues] a few large verticals continued on a descending trajectory year-over-year, such as cosmetics and personal care, suffering from disruption from pandemic wave and broader-based stringent marketing expenses control among our customers.
Moving on to full year 2022 performance. 2022 was challenging in many ways. Weibo’s advertising and marketing revenue decreased 19% or 16% versus 2021 on a constant currency basis with uncertain COVID policies and the volatile macro economy [Technical Issues] advertising demand. The industry, our largest three verticals were FMCG, 3C products and e-commerce. With respect to growth, online game, automobile and luxury sectors outperformed, underpinned by secular tailwinds in the industry development as well as unique value proposition of our ad offerings. However, the rest of consumption related verticals and e-commerce faced the broad-based headwinds against the backdrop of weak consumption data [Phonetic]. On the conservative marketing budget, the ad product promoted feed was the largest followed by social display ad and topic and search in 2022. In light of industry-wide pricing pressure, [Technical Issues] we proactively beefed up our performance-based ad capabilities and the content marketing offerings to [Technical Issues] ad goals. We are also delighted to see further videolization trend in our ad revenue mix [Technical Issues] rebuild traffic optics and optimize video ad technologies. Ad revenues from Alibaba for the fourth quarter were $42.3 million, a decrease of 7% or an increase of 3% [Phonetic] on a constant currency basis. [Technical Issues] released to drive inventory clearance during the Double 11 Shopping Festival. Full year ad revenues from Alibaba decreased 23% to $107 million correlating with [Technical Issues] marketing strategies in 2022 amid the recurrent business disruptions.
Before turning to past settlements, let me share some preliminary color on the channel entering 2023. [Technical Issues] with COVID situation during the past three years, we kicked off 2023 with reopening and the gradual normalization in business activities. Despite limited visibility in the recovery pace of macro-economy and consumption ad, we believe the worst is behind us and we are turning more constructive on the broad recovery of advertising market in 2023. With many sectors [Technical Issues] 2022, our team will build up sales execution and work relentlessly to capture higher ad wallet of pent-up budget from consumption sectors as well as sectors seeing secular growth tailwinds, such as automobile and online gaming. Leveraging our full spectrum of social ad offerings, we remain confident in our long-term monetization opportunities that our unique value proposition and a diversified content ecosystem will unlock. Value-added service, VAS revenues were $57.5 million in the fourth quarter, a decrease of 12% or 2% [Phonetic] on a constant currency basis. The decrease of net revenues was mainly due to less revenue contribution from membership services and live streaming business. Full year 2022 VAS revenues decreased a 13% to $239.7 million, mainly due to less revenue contribution from membership services and live streaming business as well.
Turning to costs and expenses. Total costs and expenses for the fourth quarter were $296 million [Phonetic], a decrease of 25%, demonstrating strong execution of our efficiency initiatives. The reduction flowed into each cost and expense items. Thanks to ongoing stringent cost-control measures on our various operational fronts, especially disciplined channel investments and the optimization of organizational structure. Full year costs and expenses totaled $1.24 billion, a decrease of 13%. Speaking to our commitment to stabilize earnings against the top line [Technical Issues], 2023 will continue to be a year of efficiency for us. Upon solid execution of cost optimization initiatives in 2022, we’ll have [Technical Issues] team and a leaner cost structure positioning us a clear path to earnings growth in 2023. Operating income in the fourth quarter was $152 million, representing operating margin of 34% compared to 36% in the same period last year. Operating income for full year 2022 was $601.1 million, representing operating margin of 33% compared to 37% in 2021.
Turning to income tax and the GAAP measures. Income tax benefit for the fourth quarter was $18.7 million compared to an expense of $45.6 million last year. The change in income tax amount was primarily due to, first, the reversal of tax liabilities recognized related to uncertain tax positions and, the second, lower taxable income in the fourth quarter of 2022 versus the same period last year. Full year income tax expenses were $30.3 million compared to $138.8 million in 2021. The decrease was mainly resulting from, first, lower taxable income in 2022 versus 2021 and, the second, the reversal of tax liability recognized related to uncertain tax positions. Net income attributable to Weibo in the fourth quarter was $178.5 million, representing a net margin of 40% compared to 32% last year. Net income for full year 2022 was $540.1 years, representing a net margin of 29% compared to 32% in 2021.
Turning to our balance sheet and the cash flow items. As of December 31st, 2022, Weibo’s cash, cash equivalents and short-term investments totaled $3.17 billion compared to $3.13 [Phonetic] billion as of December 31st, 2021. In the fourth quarter, cash provided by operating activities was $158.7 million, capital expenditures totaled $15.3 million, and depreciation and amortization expenses amounted to $12.4 million. On a full year basis, cash provided by operating activities was $564.1 million, capital expenditures totaled $43.1 million, and depreciation and amortization expenses amounted to $54.7 million.
With that, let me now turn the call over to the operator for the Q&A session.
Questions and Answers:
Operator
Thank you. [Operator Instructions]. Our first question comes from the line of Timothy Zhao from Goldman Sachs. Please ask your question, Timothy.
Timothy Zhao — Goldman Sachs — Analyst
[Foreign Speech].Thank you, management, for taking my question. I have two questions, first, our commitment, please share with us [Technical Issues] around the new trend of ad revenue recovery and year-on-year growth trend from first quarter last year to January and February this year. And how is the recovery path before us across various industries? And secondly, on the monetization plan for the new year, is there any new ad product or monetization model that we may launch for this year? Thank you.
Gaofei Wang — Chief Executive Officer
[Foreign Speech].Okay. And thank you for the question. Let me answer the first one first. So first of all, in last Q4, especially in October and also in December of last year, we’ve been having some of the political issues happening and also from December to January of last year — of this year, also we had the COVID ramping and also infections here in Shanghai and Beijing very quickly. So that is to say that in December of last year, we’ve been having negative impact on our operations and also some of the negative impact due to the lower budget allocated by our customers. But we were never having a big impact from the World Cup preparations and also operations because of a closed-loop preparation of that World Cup itself as an event. So, overall speaking, last year Q4, we had some of the missing [Phonetic] and also some of the negative impact on the overall business, due to a lot of accidents and also a lot of issues happening in December of last year.
[Foreign Speech].And also in January and also February of this year in January, we had the Chinese New Year and also of course, from the standpoint of traffic, we had actually a lot of growth on that. But still if you’re talking about the advertisement businesses, we do not have a very good comparison, if you’re talking about the year-on year basis and also, of course, if you’re talking about quarter-on-quarter and definitely speaking, we had increased, but that was not an appropriate and legitimate comparison. And also second point is that in February, we had the recovery, but the thing is that, if you’re talking about the budget given by the customers while they were doing the marketing plan for Q1, normally this particular plan was already made in December of last year. So, these customers were pretty much conservative back then in December of last year. We’ve been seeing some recoveries in the mobile and phone industry and also entertainment industry as well. But still the budget on the FMCG and also from the e-commerce industries or verticals have been postponed until the two sessions [Technical Issues] of this year or after April, so that we believe that we are going to wait until the late March or the early April for us to have an overall and also appropriate evaluation of the recovery speed of the whole industry.
[Foreign Speech].And also in terms of the detailed verticals, so two-thirds of our total revenues were from the verticals that were related to consumption in Q1 of this year and primarily speaking FMCG, 3C products and e-commerce, etc., etc. So it is pretty much subject to the macroeconomic recovery and also the recovery of the consumption power as a whole for the society. And also in Q1 of this year, we have been seeing a very good thing about the launch of new products by the 3C products industry or the luxury vertical. But still, we were not positive over the total shipments [Phonetic] of the mobile phone or smartphones, but still what’s good is that the manufacturers or those OEMs were pretty much focusing on the medium to-high end smartphones. So this is something that is beneficial to us. And also in 2022, we had witnessed a 15% decrease in terms of the total sales volume, but still in terms of Weibo’s revenue, we had a very good stabilizing trend and also a little bit increase on the revenue, so that we are very much positive in this new year, especially with an increasing sales volume of the smartphones and also some of the other consumption related products.
[Foreign Speech].And the next vertical is on the automotive. So last year we had a very good development in terms of the advertisement revenue on the automotive industry and also in 2023, with a further electrification of the whole industry and also with a more-and-more intense competition from this whole industry, Weibo will leverage further our ability of promoting the new product marketing and also do the advertisement on that. So you can see that after Q1 of this year, we’ve been already seeing a very positive trend of the growth from Weibo side.
[Foreign Speech].And also the next one is on the strategy of our advertisement and also advertising products in 2023, so as I already stated in the prepared remarks that in most of the time last year, we had been promoting the advertisement of brand plus performance, but actually in 2022 for some of the verticals, for instance, automotive and also the smartphones, we had [Technical Issues] having the brand and performance advertisements, also some of the new ways of doing marketing via constant and also hot trends. For instance, we had integrated manner of combining the media and KOLs and some of the exposures and brought together to obtain a steady or well more budget from our customers in terms of the marketing and advertisements. So in 2023, this particular integrated way of doing advertisement is also going to be continued, and also for — especially for some of the new product launch from the industries like luxury products and also the smartphones and also furnituring and decorations, etc.
[Foreign Speech]So on the overall basis in 2023 first half, we’re still experiencing a lot of uncertainties, but the core thing here is that we have to further enhance our marketing efficiency and also operational efficiency and also really trying to laser-focus on those advantageous areas as continued.
Operator
Thank you. Our next question comes from the line of Felix Liu from UBS. Please ask your question, Felix.
Felix Liu — UBS — Analyst
[Foreign Speech].Let me translate myself. Thank you, management, for taking my question. My question is on the efficiency improvement and cost control that we have done very well in 2022, so looking ahead into 2023, what are our plans on improvement and cost control? Is there any pace or trend that we can expect on the investment side? Thank you.
Gaofei Wang — Chief Executive Officer
[Foreign Speech].So for this particular question, first of all, in 2022, we had already had the impact from COVID starting from the end of Q1 and also continued [Technical Issues] from Q2. So we started to actually reduce the cost and improve our efficiency starting from then. So in 2022, the overall cost has been actually reduced by more than 10% versus 2021 and also of course, this year the major way for us to further improve the efficiency and also reduce the cost is by further reducing the marketing-related expenses by as many as 20% and also in Q4, at the end of Q4, we started to actually do the reorganization of structure of the Company and this is going to generate impact to things in 2023, so that is to say that from this year onwards, we’re going to really continue to focusing on the core businesses and also we have a very flexible financial and also accounting performance and also really have a very sustainable competitive edge being built continuously.
[Foreign Speech].And also in 2023, our key focus will still be on the further recovery of revenue and also the traffic as well and also further increase our operational efficiency. So as I have already said that, we’ve been starting — doing the reorganization or restructuring of our organization since the end of Q4 and this had a little bit impact and especially positive ones on our profit and profit margin, but it is going to generate higher impact in 2023 with regards to the profit and margin and also before 2021, we had the total operational cost, which was around like 60% of total revenue and this particular figure has been increasing to around 55% [Technical Issues] due to the impact of COVID and also in 2022, because of some other issues together with COVID, we had those particular operational cost as high as 70% in some occasions or some of the months and quarters. But in 2023, our focus is that we want to regain our operational efficiency and also would like to have the operational efficiency recovered to the approximate level and appropriate level, which was about the level of 2019 or 2020. This is continued — going to be our goal and objective and also, of course, that we really wanted to realize the enhancement of the operational efficiency on top of the recovery of our traffic and also the revenue as well. This is going to be the objectives for our company in 2023 and onwards.
Operator
Thank you. In the interest of time, I would like to take our last question from Xueqing Zhang from CICC. Please go ahead, Xueqing.
Xueqing Zhang — CICC — Analyst
[Foreign Speech].So my question is related to [Technical Issues] could management share with us the structure of [Technical Issues] in 2023, also with progress and outlook of social e-commerce business. Thank you.
Gaofei Wang — Chief Executive Officer
[Foreign Speech].So thank you for those questions. If you are talking about the non-ad businesses, we’re talking about the social e-commerce and also the membership services. So of course, for the social e-commerce, definitely speaking, now when primarily speaking when trying the advertisement module, for instance, form the alliance together would be Alibaba or JD and also to realize the traffic monetization, so of course, last year, we’ve been trying some of the closed loop e-commerce as well and especially focusing on a scenario of O2O for those high ARPU customers, and we found that the efficiency of the traffic monetization was way higher than of the advertisement module only. So in 2023, we are able to further increase the total scale and also enlarge the scale and size and also enlarge our market share by leveraging the method of, for example, KOL e-commerce live streaming or some of the — like the celebrities live streaming, and also we are trying our best to re-obtain as many customers with a high ARPU value as possible.
[Foreign Speech].And also last but not least, let’s talk about some of the membership service, so that you can see now the primary part of the membership revenue was contributed from the Weibo membership, which was contributive as many as $500 million to $600 million [Phonetic] a year. This was actually very fractional part of total revenue, but still that was very much enjoying a high gross margin for the Weibo membership business. And in 2022, especially in the second half, we had the ratification and also the some kind of adjustment of the entertainment industry. So this particular business witnessed or experienced the very first drop or decrease of the contribution to the revenue for the first time in the history. However, in 2023, while we are seeing the recovery of the entertainment and cultural industry and also with regards to the expectation of increasing revenue, we really hope that we could really develop this Weibo membership business further, because nowadays the DAU penetration is very low or relatively lower than expected, so that is to say that there is still a large room for further improvement and we really hope that Weibo membership business is going to contribute more to our total revenue and also to the profit in specific occasions. Thank you.
Operator
Great. Thank you very much for your questions. I would now like to turn the conference back to Ms. Sandra Zhang for closing remarks.
Sandra Zhang — Investor Relations
Thanks, operator. And thank you all for joining us. We’ll see you next quarter.
Operator
[Operator Closing Remarks].SOCIAL
12 Proven Methods to Make Money Blogging in 2024
This is a contributed article.
The world of blogging continues to thrive in 2024, offering a compelling avenue for creative minds to share their knowledge, build an audience, and even turn their passion into profit. Whether you’re a seasoned blogger or just starting, there are numerous effective strategies to monetize your blog and achieve financial success. Here, we delve into 12 proven methods to make money blogging in 2024:
1. Embrace Niche Expertise:
Standing out in the vast blogosphere requires focus. Carving a niche allows you to cater to a specific audience with targeted content. This not only builds a loyal following but also positions you as an authority in your chosen field. Whether it’s gardening techniques, travel hacking tips, or the intricacies of cryptocurrency, delve deep into a subject you’re passionate and knowledgeable about. Targeted audiences are more receptive to monetization efforts, making them ideal for success.
2. Content is King (and Queen):
High-quality content remains the cornerstone of any successful blog. In 2024, readers crave informative, engaging, and well-written content that solves their problems, answers their questions, or entertains them. Invest time in crafting valuable blog posts, articles, or videos that resonate with your target audience.
- Focus on evergreen content: Create content that remains relevant for a long time, attracting consistent traffic and boosting your earning potential.
- Incorporate multimedia: Spice up your content with captivating images, infographics, or even videos to enhance reader engagement and improve SEO.
- Maintain consistency: Develop a regular publishing schedule to build anticipation and keep your audience coming back for more.
3. The Power of SEO:
Search Engine Optimization (SEO) ensures your blog ranks high in search engine results for relevant keywords. This increases organic traffic, the lifeblood of any monetization strategy.
- Keyword research: Use keyword research tools to identify terms your target audience searches for. Strategically incorporate these keywords into your content naturally.
- Technical SEO: Optimize your blog’s loading speed, mobile responsiveness, and overall technical aspects to improve search engine ranking.
- Backlink building: Encourage other websites to link back to your content, boosting your blog’s authority in the eyes of search engines.
4. Monetization Magic: Affiliate Marketing
Affiliate marketing allows you to earn commissions by promoting other companies’ products or services. When a reader clicks on your affiliate link and makes a purchase, you get a commission.
- Choose relevant affiliates: Promote products or services that align with your niche and resonate with your audience.
- Transparency is key: Disclose your affiliate relationships clearly to your readers and build trust.
- Integrate strategically: Don’t just bombard readers with links. Weave affiliate promotions naturally into your content, highlighting the value proposition.
5. Display Advertising: A Classic Approach
Display advertising involves placing banner ads, text ads, or other visual elements on your blog. When a reader clicks on an ad, you earn revenue.
- Choose reputable ad networks: Partner with established ad networks that offer competitive rates and relevant ads for your audience.
- Strategic ad placement: Place ads thoughtfully, avoiding an overwhelming experience for readers.
- Track your performance: Monitor ad clicks and conversions to measure the effectiveness of your ad placements and optimize for better results.
6. Offer Premium Content:
Providing exclusive, in-depth content behind a paywall can generate additional income. This could be premium blog posts, ebooks, online courses, or webinars.
- Deliver exceptional value: Ensure your premium content offers significant value that justifies the price tag.
- Multiple pricing options: Consider offering tiered subscription plans to cater to different audience needs and budgets.
- Promote effectively: Highlight the benefits of your premium content and encourage readers to subscribe.
7. Coaching and Consulting:
Leverage your expertise by offering coaching or consulting services related to your niche. Readers who find your content valuable may be interested in personalized guidance.
- Position yourself as an expert: Showcase your qualifications, experience, and client testimonials to build trust and establish your credibility.
- Offer free consultations: Provide a limited free consultation to potential clients, allowing them to experience your expertise firsthand.
- Develop clear packages: Outline different coaching or consulting packages with varying time commitments and pricing structures.
8. The Power of Community: Online Events and Webinars
Host online events or webinars related to your niche. These events offer valuable content while also providing an opportunity to promote other monetization avenues.
- Interactive and engaging: Structure your online events to be interactive with polls, Q&A sessions, or live chats. Click here to learn more about image marketing with Q&A sessions and live chats.
9. Embrace the Power of Email Marketing:
Building an email list allows you to foster stronger relationships with your audience and promote your content and offerings directly.
- Offer valuable incentives: Encourage readers to subscribe by offering exclusive content, discounts, or early access to new products.
- Segmentation is key: Segment your email list based on reader interests to send targeted campaigns that resonate more effectively.
- Regular communication: Maintain consistent communication with your subscribers through engaging newsletters or updates.
10. Sell Your Own Products:
Take your expertise to the next level by creating and selling your own products. This could be physical merchandise, digital downloads, or even printables related to your niche.
- Identify audience needs: Develop products that address the specific needs and desires of your target audience.
- High-quality offerings: Invest in creating high-quality products that offer exceptional value and user experience.
- Utilize multiple platforms: Sell your products through your blog, online marketplaces, or even social media platforms.
11. Sponsorships and Brand Collaborations:
Partner with brands or businesses relevant to your niche for sponsored content or collaborations. This can be a lucrative way to leverage your audience and generate income.
- Maintain editorial control: While working with sponsors, ensure you retain editorial control to maintain your blog’s authenticity and audience trust.
- Disclosures are essential: Clearly disclose sponsored content to readers, upholding transparency and ethical practices.
- Align with your niche: Partner with brands that complement your content and resonate with your audience.
12. Freelancing and Paid Writing Opportunities:
Your blog can serve as a springboard for freelance writing opportunities. Showcase your writing skills and expertise through your blog content, attracting potential clients.
- Target relevant publications: Identify online publications, websites, or magazines related to your niche and pitch your writing services.
- High-quality samples: Include high-quality blog posts from your site as writing samples when pitching to potential clients.
- Develop strong writing skills: Continuously hone your writing skills and stay updated on current trends in your niche to deliver exceptional work.
Conclusion:
Building a successful blog that generates income requires dedication, strategic planning, and high-quality content. In today’s digital age, there are numerous opportunities to make money online through blogging. By utilizing a combination of methods such as affiliate marketing, sponsored content, and selling digital products or services, you can leverage your blog’s potential and achieve financial success.
Remember, consistency in posting, engaging with your audience, and staying adaptable to trends are key to thriving in the ever-evolving blogosphere. Embrace new strategies, refine your approaches, and always keep your readers at the forefront of your content creation journey. With dedication and the right approach, your blog has the potential to become a valuable source of income and a platform for sharing your knowledge and passion with the world, making money online while doing what you love.
Image Credit: DepositPhotos
SOCIAL
Snapchat Explores New Messaging Retention Feature: A Game-Changer or Risky Move?
In a recent announcement, Snapchat revealed a groundbreaking update that challenges its traditional design ethos. The platform is experimenting with an option that allows users to defy the 24-hour auto-delete rule, a feature synonymous with Snapchat’s ephemeral messaging model.
The proposed change aims to introduce a “Never delete” option in messaging retention settings, aligning Snapchat more closely with conventional messaging apps. While this move may blur Snapchat’s distinctive selling point, Snap appears convinced of its necessity.
According to Snap, the decision stems from user feedback and a commitment to innovation based on user needs. The company aims to provide greater flexibility and control over conversations, catering to the preferences of its community.
Currently undergoing trials in select markets, the new feature empowers users to adjust retention settings on a conversation-by-conversation basis. Flexibility remains paramount, with participants able to modify settings within chats and receive in-chat notifications to ensure transparency.
Snapchat underscores that the default auto-delete feature will persist, reinforcing its design philosophy centered on ephemerality. However, with the app gaining traction as a primary messaging platform, the option offers users a means to preserve longer chat histories.
The update marks a pivotal moment for Snapchat, renowned for its disappearing message premise, especially popular among younger demographics. Retaining this focus has been pivotal to Snapchat’s identity, but the shift suggests a broader strategy aimed at diversifying its user base.
This strategy may appeal particularly to older demographics, potentially extending Snapchat’s relevance as users age. By emulating features of conventional messaging platforms, Snapchat seeks to enhance its appeal and broaden its reach.
Yet, the introduction of message retention poses questions about Snapchat’s uniqueness. While addressing user demands, the risk of diluting Snapchat’s distinctiveness looms large.
As Snapchat ventures into uncharted territory, the outcome of this experiment remains uncertain. Will message retention propel Snapchat to new heights, or will it compromise the platform’s uniqueness?
Only time will tell.
SOCIAL
Catering to specific audience boosts your business, says accountant turned coach
While it is tempting to try to appeal to a broad audience, the founder of alcohol-free coaching service Just the Tonic, Sandra Parker, believes the best thing you can do for your business is focus on your niche. Here’s how she did just that.
When running a business, reaching out to as many clients as possible can be tempting. But it also risks making your marketing “too generic,” warns Sandra Parker, the founder of Just The Tonic Coaching.
“From the very start of my business, I knew exactly who I could help and who I couldn’t,” Parker told My Biggest Lessons.
Parker struggled with alcohol dependence as a young professional. Today, her business targets high-achieving individuals who face challenges similar to those she had early in her career.
“I understand their frustrations, I understand their fears, and I understand their coping mechanisms and the stories they’re telling themselves,” Parker said. “Because of that, I’m able to market very effectively, to speak in a language that they understand, and am able to reach them.”Â
“I believe that it’s really important that you know exactly who your customer or your client is, and you target them, and you resist the temptation to make your marketing too generic to try and reach everyone,” she explained.
“If you speak specifically to your target clients, you will reach them, and I believe that’s the way that you’re going to be more successful.
Watch the video for more of Sandra Parker’s biggest lessons.
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