According to eMarketer’s latest forecast, growth in digital ad spending in China has been propelled by the BAT companies—Baidu, Alibaba and Tencent.
Alibaba will draw almost one-third (31.9 percent) of China’s digital ad spending this year—a figure equal to US$16.04 billion. Alibaba is expected to continue on its growth trajectory, due to its core China e-commerce retail business and the consolidation of recent acquisitions like video platform Youku Tudou, said eMarketer forecasting analyst Cindy Liu.
“Alibaba’s ad revenues show no signs of slowing down as user engagement on the Taobao mobile app increases and the company continues to deliver highly relevant ads to consumers,” added Liu.
Baidu, at number two, is expected to generate US$9.31 billion in digital ad revenues in 2017, up 14.4 percent over the previous year.
Tencent will earn US$6.02 billion in digital advertising revenues in 2017; a 59.1 percent year-over-year increase. eMarketer expects this strong growth to continue over the next few years as well, as Tencent continues to monetise its WeChat platform by adding more interactive advertising formats and expanding inventory to local advertisers.
This year, Baidu will remain ahead of Tencent in terms of ad revenues but will continue to be affected by stricter search advertising regulations that took effect in September 2016.
Liu concluded, “We expect ad revenues for Baidu and Tencent to be neck-and-neck through 2021.”