With the undisclosed investment, Alibaba will become a majority shareholder in AdChina, which will work closely with Alimama (Alibaba Group’s online marketing technology platform) and Aliyun (Alibaba Group’s cloud computing unit).
This deal is expected to allow Alibaba to develop an end-to-end, data-driven digital marketing platform that provides comprehensive brand-building and sales integration products to online media clients and third-party service providers.
Hua Wang, general manager of Alimama, laid out the next three to five years to be crucial in building this platform that will ultimately aid e-commerce merchants in the Alibaba ecosystem.
“The rapid rise and development of the e-commerce industry in China has made the relationship between e-commerce and marketing ever more linked," said Wang. "AdChina’s data marketing platform and Alimama’s existing online marketing business and data management platform are very complementary,” he added.
According to Alan Yan, founder and chief executive officer of AdChina, Alibaba's stake will enhance AdChina's competitiveness in its existing businesses. "The data sharing between both companies will help AdChina strengthen its multi-screen marketing capabilities," he said.
Forrester Research analyst Wang Xiaofeng has the following to say, "According to Alibaba's current business model, most of its income comes from advertising. It is no surprise that it invests in areas to improve its advertising revenue: content companies previously, and now an ad-tech firm".
Programmatic buying has been the emerging trend of digital advertising in China, with the mobile side of things requiring better targeting ability and analytics. "This is still at a very early stage and so has great potential to grow," she pointed out.