Interview Synopsis

Tencent Advertising – Q2 2020 Performance Forecast – 30 June 2020

  • Multi Asset
  • TMT
  • Greater China

Tencent is a Chinese conglomerate focused on internet-related industries, from social media and gaming to music and artificial intelligence. Third Bridge Forum interviewed a senior executive from iClick (Beijing) Data Technology Co Ltd to learn more about how its advertising function has performed this year.

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.”

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