Thank you for standing by, and welcome to the Weibo first quarter 2020 financial results conference call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Sandy Zhang, Weibo Investor Relations. Please go ahead.
Thank you, operator. Welcome to Weibo's first quarter 2020 earnings conference call. Joining me today are our Chairman of the Board, Charles Chao, our CEO, Gaofei Wang, our Senior Group CFO, Bonnie Zhang, and our VP Finance and Interim CFO, Fei Cao. The conference call is also being broadcast on the internet and is available through Weibo's IR website. Before the management remarks, I would like to read you the safe harbor statement in connection with today's conference call. During today's call, we may make forward-looking 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 statements. We will assume no obligation to update the forward-looking statements in this conference call and elsewhere.
Further information regarding this 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 current 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 exclude stock-based compensation and certain other expenses. We use non-GAAP financial measures to gain better understanding of Weibo's comparative operating performance and future prospects. Our non-GAAP financial exclude certain expenses, gains or losses, and other items that are not expected to result in future cash payments or are not of recurring nature, or not be indicative of our core operating results and outlook. Please refer to our press release for more information about our non-GAAP measures. [No mention prepared remarks].
We open the lines for a brief Q&A session. With this, I'd like to turn the call over to our CEO, Gaofei Wang .
Thank you. Hello, everyone, and welcome to Weibo's first quarter 2020 earnings conference call. On today's call, I'll share with you highlights on Weibo's user product and monetization, as well as progress we made on our key initiatives in 2020. Let me start with our first quarter financial results. In the first quarter, our total revenue reached $323.4 million, a decrease of 19% year-over-year or 15% on a constant currency basis. Advertising and marketing revenue reached $275.4 million, a decrease of 19% year-over-year, or 16% on a constant currency basis. 89% of our ad revenue came from mobile.
On the user front, Weibo's MAU grew 18% year-over-year to 550 million in March 2020, representing a net addition of approximately 85 million users year-over-year. Average DAU grew 19% year-over-year to 241 million, representing a net addition of approximately 38 million users year-over-year. This is the highest reported year-over-year user growth to date in terms of net addition of MAUs and DAUs. 94% of Weibo's MAU came from mobile. This quarter, amid the coronavirus outbreak in China, Weibo demonstrated its indispensable value as a social media platform, leveraging unique strengths in serving public conversations between government, media, and general public. We are delighted to see strong growth in both users and traffic to our platform, with feed refreshes growing 50% year-over-year.
On the monetization front, advertisers in broad range cut back or suspended their ad budget in response to the business disruptions resulting from the pandemic in short or mid-term. Yes, the silver lining behind it is that the pandemic has driven the transformation of selected industry and their marketing approach, presenting long-term opportunity to both our customers and us. Coupled with the ramp-up in traffic, Weibo is well positioned to further grow its social ad wallet in the long run.
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In discussing our operating update for the first quarter, I will elaborate our progress made in areas of product monetization.
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The strong growth in youth and traffic in March was mainly driven by seasonal trends and public conversation related to the COVID-19 pandemic. To be specific, first, it is a typical season for Weibo to grow users and improve user engagement around Chinese Spring Festival. Second, in response to the pandemic, Weibo has marshaled operating resources and product development to enable wider dissemination of official information from government and media, bring professional opinion and discussion to the public, and more importantly, help general public to seek quick response from government agencies. This initiative allow us to acquire users at a relatively lower cost and further solidify our competitive edge in the market. Now let me elaborate.
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First on hot trends. In order to distribute timely update of the pandemic, Weibo has facilitated official information dissemination from over 70,000 media outlets and government agencies in the form of video and live streaming, responded quickly to launch the COVID-19 feed within recommended feed and discovery zone. In the first quarter, the pandemic-related posts by media and the government reached nearly 6 million, with total views over 400 billion. On a daily basis, over 200 million users consume pandemic-related content, among which 70 million users consume COVID-19 feed. The daily views of pandemic-related content exceeded 12 billion. Meanwhile, we, along with CCTV News, verify nearly 1,500 new Weibo accounts of medical experts, medical care staff, patients, and their family members, and helps them accumulate approximately 150 million followers through content distribution on Weibo.
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Second on vertical content. In the early stage of the pandemic, Weibo has actively encouraged platform's content creators to participate in the distribution and discussion around the pandemic-related content. As the pandemic evolved, Weibo has diversified content offerings for users through initiating online events with stay-at-home themes across eight verticals, such as entertainment, food, and humor, aiming to alleviate public anxiety over the pandemic and encourage users to return to normal life. As a result, the number of daily posts by top content creators in the first quarter grew over 50% year-over-year, and traffic for top non-pandemic related verticals resumed to the pre-pandemic level.
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Let's talk about video and live streaming business. For video, we are ramping up our marketing around both PGC and UGC video content this year. In March, our daily video views and the number of users who consume videos on Weibo grew over 30% year-over-year, driven by the overall traffic and ongoing product improvement. On the UGC video front, we further optimized user consumption experience, enhanced distribution efficiency, and reinforced traffic support for UGC video content, and thus enhanced our monetization efficiency around the video content. The daily video views of UGC videos grew 50% quarter-over-quarter, leading to an over 50% sequential growth in ad revenues from UGC videos.
On PGC video front, we further optimized social interaction experience through ramp-up on the layout of PGC video main page, resulting in robust growth in the user time spent and interaction on the main page compared to the previous one. Meanwhile, we have restructured the video community to aggregate video consumption with three feeds. One with recommended PGC videos, one with popular ones, and the third one with vertical UGC videos. Since the rollout of the new version in early April, we are glad to see positive trends in terms of user retention and video consumption, which in turn encourage professional video content creator to upload content on Weibo. Moreover, benefiting from users' surge demand for video consumption during the pandemic, along with our further optimized content offering mechanism, our video community has seen recognition from users and content creators.
In March, PGC content creators who uploaded content on Weibo reached nearly a million, with their daily video posts growing over 20% quarter-over-quarter.
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Moving on to live streaming. Driven by the pandemic, Weibo's live streaming products saw wider adoption in an increasing number of vertical scenarios as enterprise, celebrity, and KOL on our platform quickly embrace live streaming tool as a desirable communication channel. With this understanding, we beefed up our investment around live streaming from both product and operational fronts, underpinned by the showroom and the e-commerce live streaming facility we already had last year. In addition to facilitating over 30,000 government and media live events around the pandemic, we've encouraged our partners and clients to go live on Weibo, such as in the case of online concert and product launch events. We also leverage short video clips and KOLs to distribute and raise awareness about live events, leading to better promotion results for our content partners and customers.
For instance, Weibo together with Tencent Music, hosted the first virtual live concert for the famous singer, Rainie Yang. The live concert itself drew over 10 million total views, with nearly 300 celebrities and KOLs creating publicity for the event. We also edited highlights of the concert into short video clips as a way to achieve viral distribution for the event. We are pleased to deliver over 100 million views on video clips and over 700 million views on related topics. This distinct advantage we have around the live streaming video event promotion will enrich Weibo's content offerings. In the first quarter, the total number of the live video exceeded 1 million, doubled from the same period last year.
Going forward, we will continue to optimize our product and improve content distribution efficiency through more traffic support, and further enhance marketing efficiency for our clients through more diversified ad offerings.
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Lastly, let me talk about the progress we made on Oasis. The pandemic negatively impact users' willingness to post and limited content generation by a certain degree. However, as people's life in domestic areas gradually return to normal, we saw the active user and content generation on Oasis in April resumed to the pre-pandemic level and continue its growth trajectory, even without large scale channel marketing activities. We will further optimize user products to promote video content generation and distribution on top of the photo community, and further drive user growth engagement with the proper channel investment.
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Weibo's advertising revenue decreased by 19% on a year-to-year basis, or 16% on a constant currency basis, due to the adverse impact from the coronavirus pandemic.
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Our KOL revenue decreased 24% year-over-year, or 18% excluding negative impacts from currency translation and barter transaction . Several industry which were directly hit by the domestic coronavirus outbreaks cut back or suspended their overall ad budget in the first quarter. That's the case with the movie industry, where the withdrawal of new movie releases left nothing to be promoted. Meanwhile, with the epidemic evolving into a global pandemic, there were other industries such as in the case of cosmetic and luxury brands, who deferred their ad spend following the delay in new product launch caused by the global supply chain disruptions. On the flip side, the pandemic has further driven the ad budget shift from offline to online.
Industries that were traditionally opted for offline product release have begun piloting to the online model, bringing forth new opportunities as well as room in the top line growth for us in the long run. Taking OPPO as an example, we pivoted quickly and rolled out an online product launch solution to address OPPO's need to release its new model, Find X2. We successfully built hype for OPPO Find X2 through the HD live stream event, leveraging improved watching and interaction experience, which traffic exposure compounding influence of over 2,000 KOLs. The ad solution resonated greatly with our customer, delivering over 1.8 billion total views on related topics. The successful campaign with OPPO showcased the potential of the online product launch during the pandemic, and thus entice other customers from the handset and auto sector to have a try.
We believe that advertisers will continue to migrate their ad budget from offline to online. Furthermore, we expect a notable trend of integrated marketing featuring elements of live streaming, super videos, e-commerce, and KOL. In light of this trend, we have focused on ad product upgrade in order to further enhance our social ad wallet share.
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Moving on to the SME. Our SME ad revenue decreased 23% year-over-year, or 19% on a constant currency basis. On the one hand, the pandemic has put pressure on most offline merchants who slash marketing spend in response to the pandemic due to disruption in work and logistics from the quarantine. On the other hand, the pandemic has structurally benefited a few industries, which deliver much better results than we had expected. For example, ad revenues from the online education and gaming sector grew by triple digit on a year-over-year basis in the first quarter. We took the opportunity to tap into a broader customer base, notably in the education, cloud, and gaming sectors. With the pandemic accelerating internet penetration in our daily lives, our differentiated value proposition resonated well among those customers with an integrated branding plus user acquisition objective.
For instance, traditionally, customers from the online education vertical came to us mainly for conversion purposes and spent on feed ads. During the pandemic, market leaders such as Yuanfudao and TAL also reached with brand awareness on top of user acquisition. With this understanding, our sales team adapted quickly by rolling out an integrated branding plus performance ad solution and leveraged the synergy with the vertical content operational team to deliver on both the branding and user acquisition aspects. This differentiated ad solution earned great recognition from SME customers. On top of that, we also made strides in improving our service capabilities to top customers while continuously enhancing our feed ad offerings. As such, we see potential headroom in growing our SME ad revenues built upon such integrated branding plus performance needs.
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Finally, let me share some color on progress around ad products. On the programmatic buying front, namely OCPC, we focused on delivering higher ROI for customers by introducing deep learning to improve the automatic bidding process. As a result, ad spend through OCPC grew over 50% on a sequential basis. For gaming and education industry, which we put more efforts on optimizing algorithms, OCPC spend accounted for over 60% of their total ad spend. On the video front, over the years, we have gradually enhanced our monetization efficiency around video, underpinned by the healthy growth in the users who consume video content as well as the overall video views. We are encouraged to see substantially higher revenue contribution from ads in video format this quarter. That said, a chunk part of the incremental ad inventory released through video consumption remain untapped or undermonetized.
To address this opportunity, we have been continuously innovating our video ad offerings. For instance, in the second quarter, we are upgrading our Watch Plus series of video ad products by introducing more direct response features to the video playing page, such as Watch Plus Download, Watch Plus Purchase, Watch Plus Following, and Watch Plus H5 Serving, et cetera. Such direct response features will give users a shortcut to the conversion end, leading to optimized ad performance around short video and photos. Consequently, we believe these initiatives can further enhance marketing efficiency among SME customers on Weibo.
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With that, let me turn it over to Fei Cao for a financial review.
Thank you, Gaofei, and hello, everyone. Welcome to Weibo's first quarter 2020 earnings conference call. Let's start with user metrics. In March 2020, Weibo's MAU reached 550 million, representing a net addition of approximately 87 million users on a year-over-year basis. Weibo's average daily users reached 241 million, representing a net addition of approximately 38 million users on a year-over-year basis. This is the highest reported year-over-year user growth to date in terms of net additions of MAU and DAU. Demonstrating Weibo's indispensable value as the leading social media platform in China and further solidifying our strategic moat in the China Internet space. Mobile MAUs represented approximately 94% of total MAUs. Turning to financials. As a reminder, my prepared remarks will focus on non-GAAP results and all comparisons are on a year-over-year basis unless otherwise noted. Now, let me walk you through our financial highlights for the first quarter of 2020.
The unprecedented COVID-19 had a broad impact on our business operations, revenue, and expenses in the first quarter 2020. Weibo's first quarter 2020 net revenue was $323.4 million, a decrease of 19%, or 16% on a constant currency basis. Operating income was $74.1 million, representing operating margin of 23%. Net income attributable to Weibo was $67.4 million, and diluted EPS was $0.30. Now, let me give you more color on revenues. Weibo's advertising and marketing revenues for the first quarter 2020 reached $275.4 million, a decrease of 19%, or 16% on a constant currency basis. Mobile ad revenues were $246.4 million, contributing approximately 89% of total ad revenues, up from 85% last year. Moving on to KA. In the first quarter, Weibo's KA ad revenues reached $127.6 million, a decrease of 24%, or 21% on a constant currency basis.
Excluding the budget transaction revenue impact, KA ad revenues would have decreased 18% on a constant currency basis. The performance of KA ad business in the first quarter is generally in line with our expectations, as pandemic has an overall adverse impact on advertising business since late January. On the positive side, with gradual stabilization of the spread of virus domestically since March, we saw general recovery trend from the trough in February. From industry perspective, consumer staples such as food and beverage fared well and exhibited resilience during the challenging period. Moreover, the pandemic has also altered people's way of life with more time spent online, with accelerating trend of ad budget shift from offline to online.
Leveraging on this, we saw solid performance of ad spend from handset and automobile sectors on our platform, especially in March, as there are growing demand from these advertisers to promote products and service online. Social media platform is better positioned in the budget shift as it builds direct connections between brands and potential customers, and to a large extent, plays a vital role in brands' marketing funnel through engaging checks from influencers in the marketing process. On the flip side, the evolving situation of the pandemic in global areas still pose uncertainties to the macro economy and would impact on advertising budget of those with higher exposure to global business operations and supply chains, such as luxury industry. Ad revenues from Alibaba for the first quarter were $27.6 million, an increase of 66%, or 23% on a constant currency basis.
The strong momentum of Alibaba advertising business reflects the resilience of the e-commerce giant against the challenging environment, as well as our strengthened cooperation in driving value for brands and merchants to achieve higher brand recognition and fast sales conversions through integrated branding campaigns on both platforms. Turning to SMEs. In the first quarter, Weibo's SME ad revenues reached $120.2 million, a decrease of 23%, or 19% on a constant currency basis. In the first quarter, we witnessed divergence in marketing spend by industries amid the pandemic. The harder hit sectors of offline categories, which slashed on marketing spend in the first quarter as their businesses nearly stalled since the COVID-19 outbreak. E-commerce sectors have experienced trough in February and entered recovery trend in March as work resumption and logistic capacity improved.
Helping mitigate the decline has been a significant ramp-up in marketing spend by gaming and online education sectors that took advantage of the rising Internet usage during the pandemic quarantine. We also made progress in delivering integrated service and driving adoption of optimized solutions among SME clients, especially the aforementioned online sectors, which lead to a relatively stabilized ad pricing trend on a sequential basis, despite the constraints in ad demand. Value-added service net revenues was $48 million in the first quarter, a decrease of 17%, or 14% on a constant currency basis, primarily due to the decrease of live streaming tickets and was partially offset by increase in membership revenue. Turning to costs and expenses. Total costs and expenses for the first quarter decreased 5% to $249.3 million. Operating income in the first quarter was $74.1 million, representing operating margins of 23% compared to 34% last year.
Our disciplined spending in response to the pandemic did not fully offset its impact on revenue side in worst-impacted quarters. Turning to income tax and the GAAP measure. Income tax expense for the first quarter was $15.9 million compared to $21.1 million last year. The decrease was partially resulted from the reduced earnings and was partially offset by increase of effective tax rate, primarily due to the expiration of the preferential tax treatment of one of the company's PRC subsidiaries in 2020. Net income attributable to Weibo in the first quarter was $67.4 million, representing a net margin of 21% compared to 32% last year. Turning to our balance sheet and cash flow item. As of March 31st, 2020, Weibo's cash equivalents and short-term investments totaled to $2.35 billion, compared to $2.4 billion as of December 31st, 2019.
In the first quarter of 2020, cash provided by operating activities was $63.6 million. Capital expenditures totaled $7.3 million, and depreciation and amortization expenses amounted to $6.8 million. Let me turn to financial outlook. In light of the uncertainties from the pandemic and the rapidly changing market conditions, we anticipate our second quarter 2020 net income, net revenues to decrease by 7%-12% year-over-year on a constant currency basis. This forecast reflects Weibo's current and preliminary view and is subject to change. Let me now turn the call over to the operator for the Q&A session.
Thank you. If you wish to ask a question, please press star then one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two. If you are on a speakerphone, please pick up the handset to ask your question. The first question today comes from Alicia Yap with Citigroup. Please go ahead.
Hi. Thank you. Good evening, management. Thanks for taking my questions. Congrats on the solid results. Can management elaborate on the recovering status and also the budget willingness for the KA account versus the SME? Any specific trend we are seeing from multinational KA accounts showing more cautious in spending? If you could give some colors on major industry verticals, how are some of the impacted factors in the recovering trend and their willingness to spend? Thank you.
Okay.
First, let me share some color on Weibo for the performance and recovery trend we have seen so far. For KA business, we actually saw a healthy year-over-year growth trend in January prior to the coronavirus outbreak. However, after the coronavirus outbreak since late January, advertisers in that range have either cut back or postponed their advertising in response to the pandemic. Entering into April, things are getting normalized, with domestic epidemic being effectively contained and business resumption underway. Accordingly, we are seeing a sequential recovery of ad spend from those advertisers with either flattish or modest growth trend on an an annual basis. However, multinational brands probably would take a more cautious view in their global ad spend given the significant headwind from the pandemic in the home market, which might have a ripple effect on their China ad budget.
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For FMCG industry, consumer staples such as food and beverage demonstrate resilience and exhibit a generally stabilized trend in the first quarter, while discretionary categories such as cosmetic and personal care subsector was negatively impacted in the first quarter as several customers reduced or postponed their ad spend in reaction to the delay in the new product launch. For the second quarter, ad budget from the top customer in FMCG vertical are picking up sequentially.
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As for the handset and auto sectors, our revenue from these two sectors actually increased year-over-year in the first quarter, despite disruption in their production of promotion in the first quarter. During the pandemic, we introduced our product launch solution to further tap into the ad budget shift from offline to online sectors. Looking ahead, since the mobile handset production is mainly concentrated in the domestic area, and this accelerating trend of the budget shift from offline to online, so we will further emphasize on optimize the ad products for this sector and capture the ad dollars from the handset sector. We actually saw nice growth of the handset sector on Weibo so far.
For the auto sector, due to its high exposure to the global supply chain, the global pandemic disrupting auto production and may cause uncertainty to the ad budget for the sector in the second quarter.
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For the e-commerce sector, since late March, the sector bounced very strongly from February's low in the logistics and work resumption, and we believe that e-commerce will see further uptick as the Q2 is industry's traditional peak season.
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Lastly, luxury brand and entertainment sectors. These two sectors were significantly impacted by the pandemic in the first quarter. We also anticipate a generally prudent attitude toward ad budget allocation from the luxury industry as operational pressure and demand softening caused by the pandemic weigh on the sector growth. For the entertainment, which we also anticipate similar kind of trends due to the impact from the pandemic can also be regulation impact.
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For the SME business, the pandemic has actually structurally benefited the online sector. Among which, the gaming and education vertical delivered very strong growth, double from the same period last year and largely exceeding our expectations. Leveraging the synergy between our product and operational team, we piloted quickly to fulfill online customers integrated branding plus the user acquisition objective, helping us to capture additional ad dollars from the online sector.
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As we enter into April and May with work resumption underway, users' online timestamp has gradually normalized, we did see some pullback of that spend for the gaming and education category on a sequential basis, while on annual basis, the growth trend is still quite encouraging. On the flip side, the offline industry such as the wedding service and the medical service, took a hard hit during the pandemic period, which offset robust growth of the online sector. It might also take a while to see a recovery from this offline sector.
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Moving on to Alibaba, we are delighted to see nice growth from Alibaba in the first quarter. For one thing, the e-commerce sector demonstrated resilience and solid recovery during the period. Weibo took the opportunity to capture additional ad budget from the Alibaba ecosystem, such as from 云端, the cloud service, DingTalk and Ele.me. For another, we have deepened our strategic collaboration with Alibaba in areas of branding plus performance, ad and e-commerce live streaming. This initiative amplifies Weibo and Alibaba's advantage in social e-commerce and big data, and thus provide better conversion for advertisers within Alibaba's ecosystem. With this positive development, Weibo's differentiated ad offerings earn better recognition from Alibaba, leading to growth in the Alibaba ad spend.
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From full year perspective, we have enhanced our competitive edge with the brand advertising and e-commerce driven power surge in traffic and rich marketing ecosystem, such as live streaming amid the pandemic outbreak. We expect a solid ad growth from ad and Alibaba sector in the second half upon normalization after the outbreak. In the SME sector, besides nice growth in ad inventory and strong performance in the gaming and education sector through our product optimization, we still see some pressure on the demand side, especially for the offline sector. We also are seeing the pressure on the supply that we oversupply of inventory, especially from the short video platform. We expect overall SME performance for the full year, barring some industry-wide happenings and also intense market competition.
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Thank you.
The next question comes from Binbin Ding with JP Morgan. Please go ahead.
Good evening, management. Thanks for taking my question. My first question is regarding the competition in the online ad market. I think in last year, one of the major concerns among investors is oversupply of ad inventory, and management just mentioned that again. How does management view the supply-demand situation in this year, especially post the COVID-19? Will there be any changes to the competitive landscape because of the pandemic? I have a follow-up question on the potential opportunity from the COVID-19. Have you identified any new user behavior changes during the pandemic? I think you mentioned a number of new initiatives such as live concert, online product launch. Can you elaborate on topic? How is Weibo positioned to capture these opportunities? Thank you.
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Overall, we see an unfavorable supply and demand dynamic in the overall advertising market, with some softness in the demand side, especially for the SME sector, and oversupply of inventory in the market. Weibo is well-positioned to capture the opportunity brought by the advertising shift from offline to online as the leading social media platform. We have influence on media celebrity and the KOL resources, and we also have a very strong growth in our overall user base. We could also tap into new opportunities with the online product launch, which will help us to capitalize on the advertising shift. We still see ample room to improve our per-user monetization rate, considering the impressive traffic scale and the growth of our platform.
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The pressure we see from the short video platform is still challenging for the short video platform. We will focus on three areas to improve our overall competitive edge in the market to acquire more advertising clients.
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First, another trend we see the integrated branding plus performance advertising is a very important trend in the market, and it's also an area we keep focused on for our products and operations.
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Amid an overall advertising CapEx led by the pandemic, we expect the key customer to emphasize more on the conversion front on top of their existing branding needs. Therefore, new product launch and various e-commerce-related promotion by brands is becoming a kind of must-have scenario in their budget allocation. For new product launch, as I mentioned earlier, our online product release resonated well with the handset customers, and we are also penetrating to the FMCG vertical as well. For the e-commerce-related promotion by brands, Weibo has great influence on social ad options and social e-commerce ecosystems, and based on our cooperation with Alibaba in terms of cultivating users' purchasing intention, KOL marketing as well as sales conversion, which enable us to attract incremental ad wallet from key customers.
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On the other hand, our top SME customers also have the incremental branding needs on top of their traditional performance-driven objectives. In fact, this incremental branding budget was one of the main drivers for the growth of the gaming and education customers in the first quarter. We also cooperated with coordinating our activity and KOL resources, and also integrated branding plus performance solutions to our customers, leading to a significant uplift in our competitive edge among these two industries, especially the online education sector. With the consumption upgrade, I think they will roll out more integrated branding plus performance solutions to our top SME customers.
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Besides the branding plus performance trend, KOL marketing is also a very important trend as well, and it's Weibo's key differentiation in the market.
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Though we may have some disadvantage for the ad design compared with the short video platform, we have plenty of celebrity and KOL resources on our platform, and it's a very important social asset in facilitating the brand recognition to sales conversion, and play a very crucial role in enhancing the conversion performance of the brand ads. The Weibo public social feature enable KOLs marketing content to achieve wide reach and also help brands accumulate social assets and help to differentiate our ad products in the market.
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In the second and third quarters, we upgrade our KOL marketing system, along with the performance ad options, and to advance our facilitating capability between customer and KOLs as a step further to differentiate us in the performance marketing. We will also drive up the adoption of the KOL marketing, provided that customers from various industries find the optimal match for their campaigns.
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For our ad technology, we are focused on improving ad technologies through the OCPX adoption, and also enhancing the conversion performance, which largely helps to increase the sales rate of our product in the first quarter. On the other side, for our Watch+ kind of product, which is the upgraded version of the photo-based product, it also help us to improve the conversion effects for the products on our platform through the upgrade of this kind of Watch+ product.
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In terms of the pandemic has also changed the user behavior. We see a very meaningful increase of the traffic and also the user content generation kind of activity. What differs from the summer vacation is that we're seeing a much live content being promoted on the platform, and also you see increased more time spent on the platform as well.
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On the content generation side, we see a lot more live broadcasting coverage on the vertical area other than the typical segment where in the past were strong at the live broadcasting, the showroom, the media, e-commerce. We see significant expansion of the vertical segments in using live broadcasting tools.
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We look at the number of live broadcasting we hold on our platform. This number is over a million , which is more than double the same period of last year, 80% higher than the quarter-over-quarter basis. Most of the live broadcasting events were focused on the e-commerce, the media, and the enterprises level.
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Yes. From a short-term perspective, we see quite limited revenue growth that can be directly derived from the live broadcasting growth. Even for the showroom live broadcasting, we anticipated there will be a short-term reduction in revenue in the foreseeable future. However, we believe with the more adoption of live broadcasting, e-commerce, and such as live concert, there will be increased demand from brands to participate in events like this. We look at the enterprise and e-commerce live broadcasting. We will convert these demand into a standard product and to push to the KOL and enterprise for them to use live broadcasting as a sales channel to facilitate their brand. In terms of media, celebrity, and live concert broadcasting, so far, they have been providing quality content and potential commercial inventory to us.
We believe brands are typical buyers of these commercial inventory, even though at this moment, we have very limited exposure on the brand revenue for the second quarter. However, we believe in the second half of this year, more brands will likely to look into these types of inventory to have opportunity to present themselves. At this moment, most of live broadcasting was more focused on the content generation and from a user consumption perspective, has brought quality content to the platform. We're promoted to commercialize or monetize these contents using different trial products.
This concludes our question and answer session. I'd now like to hand the call back to Ms. Sandy Zhang for any closing remarks.
Yes. Thanks for operating and this concludes our call. Thank you for joining us. We'll see you next quarter.
This does conclude our conference for today. Thank You for participating. You may now disconnect.