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Alibaba Accounts for One-Third of Chinese Digital Ad Spending Revenues This Year

| Mar 13, 2017 06:11 AM EDT

Alibaba can expect to grow from strength to strength as the company continues to invest in digital ads that closely relate to consumer preferences.

Alibaba tops rivals Baidu and Tencent in digital ad spending in China this year, with the online retailing giant expected to rake in around $16.04 billion from its digital marketing endeavors, which is around 31.9 percent or one-third of the national figure.

Cindy Liu, an eMarketer forecasting analyst, said that Alibaba can expect to grow from strength to strength as the company continues to invest in digital ads that closely relate to consumer preferences, alongside stronger user engagement on the mobile app Taobao.

The significance of digital ad spending revenues made possible by Alibaba Marketing is further supplemented by the company's constant gains from its core e-commerce business and recent acquisitions such as the Youku Tudou video platform, Campaign Live reported.

With mobile platforms set to become China's leading source of digital ad spending revenues through its emergence as the country's leading advertising channel, Alibaba expects to reap more from its digital advertising investments alongside Baidu and Tencent, the country's other two online industry giants.

Impressively, the three BAT companies have generated the bulk of China's digital ad spending revenues this year. Chinese search engine company Baidu is estimated to earn $9.31 billion from digital ads this year, which is an impressive increase by 14.4 percent from last year's figure.

Tencent, for its part, can generate $6.02 billion worth of digital ad spending revenues this year, constituting a 59.1 percent year-over-year improvement. Ongoing efforts to monetize several of WeChat's functions are expected to boost the company's fortunes as it spends more on digital ads.

Given Tencent's astonishing growth in spending for digital ads, Liu noted that the WeChat creator can go neck-and-neck with Baidu in 2021. Nonetheless, China's leading search engine company can expect a massive roadblock in the form of tighter measures on search advertising that took effect last year.

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