Interview Synopsis

Tencent financial report outlook – ads business update

  • Public Equity
  • TMT
  • Greater China

Shenzhen Tencent Computer Systems’ former Senior Product Manager spoke to Third Bridge Forum regarding the online advertising industry in China, paying close attention to his previous company. The Interview focused on market share shifts, growth targets and the dynamics between major digital media advertising platforms and their agents.

Market shifts in China’s online advertising industry

The specialist commenced the Interview by noting the changing trends that have occurred in China’s online advertising industry. He explored the breakdown in demand from various clients, explaining which areas had experienced growth and which were sluggish, as well as his outlook on the ability for companies with low demand to recover. The former Senior Product Manager also examined the contributory factors behind Tencent’s clients being more careful advertisement placements in comparison to last year. 

Advertising spend for companies in the educational industry has risen dramatically despite relative inactivity in the advertising space, noted the former Tencent Product Manager. He delved into the market share between top platforms such as Toutiao and Tencent, expressing his thoughts on their market share battle in light of the different advertising budgets. Whilst the cost of lead generation on Toutiao is lower than that of Tencent, the specialist suggested that the latter platform could perform better for clients in the educational industry, which might have led to Tencent’s increased popularity here. 

WeChat’s Moments function is highly popular, and this will only lead to increased revenue for the company, explained the specialist. The social media platform has opened a third daily advertising slot in user feeds, which could be partly behind the company’s revenue increase. However, the former Senior Product Manager warned investors that this could eventually hinder the company. He explained that the company runs the risk of offering advertising slots whilst the ability to sell these slots in third- and fourth-tier cities is uncertain. 

The specialist continued by outlining the early signs investors should watch out for in order to gauge whether the advertising industry had recovered; Tencent’s advertising distributors and agents that have performed well; and Weimob trends. 

To access all the human insights from Third Bridge’s Tencent Financial Report Outlook Interview, click below to view the full transcript.

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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