Author Topic: Why Advertisers Banking on performance Based Ads ?  (Read 290 times)


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Why Advertisers Banking on performance Based Ads ?
« on: December 09, 2016, 02:02:10 PM »
Since 3Q16 results, performance ads have continued to grow faster than brand ads. This observation matches with iResearch data trend, which shows the market share of brand ads decreasing from 19.5% in 3Q14 to 13.4% in 2Q16E while the market share of other forms of ads (including effect-based advertising on navigating sites, portals and social media) increased from 7.7% in 3Q14 to 11.4% in 2Q16E.

We believe the growing popularity of mobile news app has been one of the key growth drivers for performance-based ads in 2017 and the other is revival of user engagement levels on the Weibo social media platform, helping it to gain traction for its promoted news feed.

Tencent mentioned 1/3 of ads on its news app were performance-based while 2/3 were brand ads, compared to 90-95% of brand ads over one year ago. Due to the demand from advertisers, Tencent is reallocating the news app inventory more towards performance-based rather than the time-based segment.

An interesting dynamic for Weibo this year has been its ad budget shifting for its key account customers (brand) from the display ad format to the more promoted news (performance base) ad format. For Baidu, currently the majority of the advertisements on its news feed are performance-based ads. Hence, in 2017, we expect performance-based ads to continue to grow faster than brand ad.