Brands are increasingly shifting budget to short video apps, which are outperforming other internet platforms.
Douyin and TikTok owner Bytedance has overtaken search giant Baidu to hold the second-largest share of China’s digital ad market during the first half of 2019, according to CNBC.
Why it matters: As short videos continue to encroach upon Chinese netizen screen time, brands have started to prioritize ad budget for short video platforms, which are taking share from other consumer internet platforms such as mobile games.
- The average time that users spent on short video apps increased 8.6% year on year to 22 hours per month, according to a report from research firm QuestMobile released in June.
- Time spent on other categories of apps, such as video streaming, mobile games, and online reading, all dropped during the same period.
Details: Bytedance took 23% of all digital media spending in China in the first half of the year, or around RMB 50.0 billion ($7.1 billion), led only by e-commerce giant Alibaba, which accounted for 33% of the total during the period, according to the report citing marketing consultancy R3.
- Bytedance’s digital ad revenue for the first half of 2019 surpassed that of Baidu, which was around RMB 36.9 billion, as well as Tencent’s RMB 29.8 billion.
- The company’s ad revenue in the first half of the year surged 113% compared with the same period last year, powered primarily by growth from short video app Douyin and content aggregator Jinri Toutiao.
- R3 expects that Bytedance’s rate card will increase 10% in 2020, referring to advertised prices for ad placements. The average inflation rate in China is around 2.5% currently, according to the report.
Context: Bytedance has been building an advertising ecosystem to streamline ad creation, deployment, and management across its content platforms.
- The company launched two ad-creation tools in September, with one targeting the domestic market and the other intended for ads on short video app TikTok.
- Prior to the ad-creation tools, Bytedance also released two apps that track advertising and marketing campaign performance.
– This article originally appeared on TechNode.