Announcement of weibo.com by Sina at Sina Weibo Developers Conference 2010

How much is social advertising worth? The metrics to define the actual value of social advertising is still not definite, so it’s really up to the third parties to judge how much they are willing to pay for promotion on the site.

Sina Weibo, the Chinese Twitter, has came far since it’s launch in September 2009. After a year of heavy investment from Sina, the site now has an estimated of 70 million users with over 70,000 verifications for the well-known public figures, and it is now looking to monetize via social ads.

How much is social advertising worth? The metrics to define the actual value of social advertising is still not definite, so it’s really up to the third parties to judge how much they are willing to pay for promotion on the site.

A set of “standard rates” recently spread on Sina Weibo–the prices that Chinese advertising agencies charge for “social ads.” For an account with 600,000 followers, advertisers are willing to pay 2,000 RMB (300 USD) per post. At first glance that seems like a sweet deal relative to the price of traditional media.

Weibo Ads Pricing Per Post

But of course there is no free lunch–such a “sweet deal” is no longer so sweet if we ask the right questions:

1) Are the Followers of High Quality? – Many agencies buy followers or create zombie accounts to boost their numbers. So out of the 600,000 followers how many are actually active with purchasing power? To determine that is extremely difficult. A “standard rate” for advertising via user accounts on Weibo is a silly concept as the quality of followers varies dramatically.

2) What is the Standard Conversion Rate? - In the social games industry in China, a maximum of 5% of users pay real currency for virtual goods. And social gaming is the most consolidated form of online interaction in China.

3) What is the Multiplier Effect? – The match between content and followers is key. In Sina Weibo, being RTed by a public figure (with a verified “V”) can dramatically increase the multiplier effect. One of the main attractions of Sina Weibo is still its verified users, the celebrities of Chinese society.

TechRice expects Sina Weibo to be one of the top internet trends in 2011. Personally, I believe just how far it will go depends on users’ willingness to explore deeper social bonds with each other. When social ads come with the power of a personal recommendation, traditional media channels cannot compete. But without that social connection, it’s just the same spammy advertising on a different platform.

 

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  • http://twitter.com/adhigoen just adhi

    There is still the issue in quality, as we know there are Water Army of China. Although the users growth are growing, but there are no known apps or tools to determine the geo-location, gender, demographic, etc. At least Twitter has other developers working on this based on the open API.

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