Shifting patterns in Tencent’s advertising landscape
How Tencent has been performing this year amid the coronavirus pandemic was first on the agenda. Q1 was stronger than expected, as the “boom of industries such as game and education… boosted Tencent’s social advertising services, which partly offset the decline in its media advertising services.”
Q2 is expected to see a slower growth rate for social and media advertising, as revenue from the gaming industry “dropped sharply”. However, as e-commerce and gaming consumed a fair amount of advertising traffic during this time, the specialist believes that revenue should grow by about 10% YoY.
The specialist also went into detail about advertising consumption across different industries, as well as noting their revenue fluctuations this year. Together, the e-commerce, game, education and internet service industries make up the majority of traffic.
Turning to Tencent’s platforms and products, the specialist said “I think there was an increase in the revenue contributions of WeChat and Guangdiantong but a decrease in those of Qzone, Mobile QQ and QQ Browser”. However, these were not “sharp” changes.
When asked about the effectiveness of performance-based ads, the specialist compared Tencent with Toutaio, a competitor. Both companies record similar results, but they focus on different types of clients. In addition, “Toutiao sets lower standards in selecting clients. Some clients, such as independent e-commerce merchants, can’t open an account on Tencent but can do so on Toutiao.”
To access all the human insights from Third Bridge Forum’s Tencent Advertising – Q2 2020 Performance Forecast Interview, click here to view the full transcript.
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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