Jenny Chan 陳詠欣
Nov 16, 2017

Tencent's advertising revenue reaches 17% of total as WeChat nears a billion users

Overall third-quarter revenue hit US$9.83 billion, up 61% year-on-year.

Screenshot from the back end of a Tencent ad-serving system.
Screenshot from the back end of a Tencent ad-serving system.

Tencent has reported third-quarter revenue of RMB65.2 billion (US$9.83 billion), achieving an increase of 61% year-on-year.

The growth still came primarily from the company's gaming businesses, but revenue from all of its various advertising properties, at RMB11 billion (US$1.66 billion), accounted for 16.9% of the total.

Starting in the first quarter of 2017, Tencent reclassified online advertising revenues, in light of increasingly blurred boundaries between performance-based advertising and brand display advertising.
Revenue in Q3 is now classified by advertising properties, rather than advertising pricing models. 
  • Media advertising revenue (mainly generated from news, video and music properties) increased by 29% to RMB4.12 billion (US$620 million), due to Tencent Video in particular. Pony Ma, chairman and CEO of Tencent, said: "We believe it has become China’s top online video platform in terms of mobile daily active users and subscriptions".
  • Social advertising revenue (mainly generated from the YingYongBao Android app store, QQ browser and ad networks) grew by 63% to RMB6.92 billion (US$1.04 billion), thanks to a boost in WeChat Moments' advertisement 'fill rate' (meaning ad requests made by publishers that were delivered by the ad networks)

The keenly-watched MAU (monthly active users) of Weixin (Chinese version of the app) and WeChat (English version for international markets) combined came up to 980 million, an increase of 15.8% year over year.

Revealing figures for Tencent Video for the first time, the company claimed to have exceeded 43 million fee-based subscribers, who are binging on popular dramas such as Nothing Gold Can Stay (那年花开月正圆), and self-commissioned variety shows such as The Temptation of Dinner (Season 2) (饭局的诱惑第二季).

Last week, at a conference held in Beijing, Tencent showcased its 2018 plans with regards to content, marketing and product technology. Thirty Sun, vice president of Tencent and CEO of Tencent Penguin Pictures, gave advertisers a preview of six marketing scenarios surrounding Tencent's content, termed as IP in China, not without some hyperbole.

"Excellent content is the soul that lets video become a deeper part of each user's personal world, entertaining them and provoking their thoughts and feelings. This is the meaning behind video content, and is also the greatest value that the video industry brings to its users," said Sun.

In September, Tencent also launched shopping accounts on QQ, one of its older social media platforms, where subscribers can follow e-commerce platforms and brands to receive promotions once every four days. Tencent has over the past few years deliberately paced itself in introducing "hardcore" advertising to its platforms gradually to improve user stickiness before thinking about monetisation.

Campaign China

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