How Crucial Are Small & Mid-Sized Businesses For Sina’s Advertising Business?

May 16th, 2016 by Trefis Team
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SINA: Sina logo
SINA
Sina

Sina (NASDAQ:SINA) generates a major portion of its revenues from online brand advertising and marketing on Sina.com and Weibo.com. As you can see in the table below, the contribution of advertising revenue to Sina’s net revenue has increased from 79% in 2013 to 84% of net revenue last year.

Sin_SME1

Within the advertising segment, portal advertising includes revenue generated from online brand advertising on Sina.com and Sina mobile properties, while Weibo advertising revenue is comprised of revenue generated by advertising and marketing on microblogging and social media platform Weibo. Sina’s core portal business has struggled over the last couple of years, with revenues declining due to increasing competition in the online advertising market and low ad budgets by brand advertisers. Comparatively, Weibo advertising revenue has consistently grown over the past few years. Despite varying trends among both segments, Sina has witnessed explosive growth from revenue generated by small and medium enterprise (SME) customers over the last couple of years.

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Sin_SME2Sina’s management attributed the solid growth in advertising and marketing expenditures from SME customers to an increase in small and mid-sized businesses in China in addition to the introduction of self-serve ads in 2014. [1] The growth spree has continued in 2016 thus far, with SMEs contributing about 43% of total advertising revenue for Sina through the March quarter. [2]

Sin_SME3

As a result of a strong demand from SME customers, the company has set up a nationwide SME distributor network to meet the marketing requirements in this segment. Sina expects the demand in this space to grow at a stable pace through 2016. [3]

Have more questions about Sina? See the links below:

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Sina.

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Notes:
  1. Good News for SMEs: Self-serve Advertising Comes to Sina-Weibo, Moonlight Hong Kong, May 2014 [↩]
  2. SINA Q1 2015 Earnings Call Transcript, Seeking Alpha, May 2016 [↩]
  3. Sina 20-F 2015 Filing, SEC, April 2016 [↩]