2021 Q2 Advertising Revenue of Major Chinese Internet Companies Shows Market Picking Up

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(Source: Tuchong)

As of this week, several major domestic Internet companies have announced their second quarter financial reports. Based on the information of 12 domestic listed Internet companies, Chinese media outlet TopMarketing has compiled the advertising revenue of major companies and found that the impact of the Covid pandemic has basically been eliminated and the advertising market is rapidly rebounding.

The reports show the overall advertising business is growing steadily compared to the second quarter of last year, with some emerging platforms growing at a record pace.

The financial reports also show the following features of changes in the advertising industry:

First is the shift from traffic to quality. Some research shows that 80% of advertisers choose to invest more in content marketing in 2021. Newly emerging media platforms such as Bilibili and Zhihu are launching marketing solutions with content at their core. Behind their rapid growth rate, these platforms are favored by advertisers. Their long-term business models, however, are still being tested.

Second, that content that is made into videos is also a long-term trend. According to a research report released by Western Securities in May this year, video has seen broader acceptance by audiences as it is often a type of dynamic content that includes not just a visual component, but an audio component, too. Video content is not only a strategic focus for short-video platform Kuaishou, but also for social platforms such as Weibo and WeChat, and is influencing the evolution of advertising formats.

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This trend was also reflected in QuestMobile’s recently released 2021 semi-annual Internet report, which shows significant growth in short-video news feed ads and a shift to video in the form of open-screen ads.

Large platforms, such as Alibaba, Weibo, Kuaishou, Xiaomi, and other, smaller, platforms have launched or upgraded their own news feed systems to keep up with the changing trends in content consumption.

Finally, competition in the new consumption industry has become heated. There were reportedly more than 280 financing events in the new consumption field in the first half of this year, with the total financing amount exceeding 19 billion yuan ($2.94 billion).

In addition, e-commerce platforms still take a large part of advertising budgets. E-commerce platforms are also launching relief policies for merchants to reduce the promotion threshold for small- and medium-sized companies.