A USD 6,700 ad goes nowhere, exposing yet another Weibo’s ‘fake traffic’ issue

Weibo’s ad business, its key source of profit, has remained flattish.

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Chinese microblogging platform Weibo has suspended an account with 3.8 million followers for “data fraud,” as a dispute over an ad posted by the account thrusts it into a controversy of faking traffic and fooling advertisers.

The dispute also exposed a bevy of issues long plagued Weibo, from purchasing fake followers to fabricating likes, reposts, and likes, all these are metrics an advertiser would usually use to measure a Weibo account’s advertising value.

Last week, “Zhang Yuhan,” a female influencer with nearly four million followers, posted a promotional video-blog commissioned by an advertiser. In the video she recommended a sanitary product to her followers. Within an hour, the video gathered over 120,000 views, thousands of likes, and hundreds of reposts, in addition to comments suggesting the commenters have bought and liked the products.

However, the advertiser—a Taobao vendor—alleged that the ad placement didn’t bring in any real orders other than the fake reviews. The vendor took the case to Weibo accusing the influencer account of cheating him RMB 47,500 (USD 6,700) ad fees in a post. The post went viral as it is one of the many cases of China’s “water army” phenomenon or “Shuijun” in Chinese. Water army refers to individuals or companies that buy fake followers to boost a social media account’s popularity, hence profiteering from the move.

Abnormal traffic took up nearly one-third of internet ad traffic in 2018 and this led brands and advertisers to a total loss of over RMB 26 billion, according to Chinese ad industry data provider Miaozhen System.

Weibo, which touts over 30,000 celebrities and 400,000 influencers, has taken measures to weed out the bot accounts and inauthentic activities on its platform. But the efforts aren’t taking off because Weibo monetizes from bloggers’ traffic, according to Shi Shengyuan, who wrote about the scandal in an article on 36Kr.

Weibo reported a net income of USD 103 million in the second quarter, down 26.9% year on year. Advertising and marketing revenues inched up 0.2% to USD 371 million – the lowest growth since the company went listed on the Nasdaq five years ago.

Hive Media, the agency in the center of the controversy, initially said the deal did not guarantee any sales and that the vendor maliciously slandered the company. But it issued a second statement on Sunday, saying it felt responsible for the negative consequences incurred on all parties. It said it has sacked one staffer in the incident and penalized two others.