Weibo Corporation (NASDAQ:WB) Q2 2020 Earnings Conference Call - Final Transcript
Sep 28, 2020 • 07:00 am ET
Thank you. Ladies and gentlemen, we'll now begin the question-and-answer session. [Operator Instructions]. First question from the line of Gregory Zhao of Barclays. Please go ahead.
Hi, management. Thanks for taking my question. So my question is about advertising business. So first, how shall we think about the KA and SME advertising recovery trend in the second half? And what's your plan to further improve the monetization? And also, in the prepared remarks, you mentioned advertising system upgrade. So, how shall we think about the OCPX trend and coverage post the upgrade?
And also, it'd be helpful if you can share some colors for the entire online advertising market. Any colors about competitive dynamics will be very helpful. Thank you. Okay. [Foreign Speech]. First, let me briefly recap on our second quarter performance and share some color on the recovery trends we've seen so far for KA and SME business in the second half. [Foreign Speech]. On the KA front, we saw the overall KA business come back at a nice pace during the second quarter and leveraging the recovery of the market demand and also the improvement of the social marketing capability of our team. And several key industries, including FMCG, e-commerce and automobiles, already delivered positive year-over-year trends. However, entertainment and travel sectors still fell short of the ad dollar compared with same period last year due to the pandemic which dragged the growth of KA business. [Foreign Speech]. Entering into the third quarter, we saw the overall brand sentiment has turned more positive backed by the stabilization of pandemic situation and improvement of the macro environment, especially the consumption side. As mentioned earlier, key sectors of brand business such as FMCG, automobile and handset continued to book healthy growth trends in the third quarter. But on the flip side, despite some sequential pickup, sectors like entertainment are still on a descending trend, given the relatively weak market demand compared with same period last year. At this moment, assuming no further impact from the pandemic in the coming quarter, we expect the KA business to continue to improve sequentially with the stronger demand fueled by the e-commerce seasonality. [Foreign Speech]. On the SME front, the performance ad front, despite the overall ad budget pickup from a low point in the first quarter, SME business, largely remained -- customer remain cautious in their marketing spend since the SME advertiser are generally more vulnerable to the macro downside, particularly for the offline merchants. So, the SME business continued to decline on a year-over-year basis. While on the upside, sectors like gaming and education continued to grow very strongly with triple-digit growth year-over-year. And also, e-commerce sectors, leveraging the June 18th, e-commerce festival and the live streaming kind of e-commerce improvement, we see the overall sector rebounding nicely on a quarter-over-quarter basis. [Foreign Speech]. Entering into the third quarter, our SME business further recovered sequentially with gaming and education sector continue to outperform. And sequentially, it's also growing very robustly. However, offline