---
title: "Advertising is fierce - Ten details and incremental information about the advertising section in Tencent's financial report"
description: "Tencent's financial report shows that advertising revenue grew by 20%, achieving double-digit growth for 11 consecutive quarters, with gross profit increasing by 24%. AI technology significantly impro"
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/253002301.md"
published_at: "2025-08-14T09:15:54.000Z"
---

# Advertising is fierce - Ten details and incremental information about the advertising section in Tencent's financial report

> Tencent's financial report shows that advertising revenue grew by 20%, achieving double-digit growth for 11 consecutive quarters, with gross profit increasing by 24%. AI technology significantly improved advertising effectiveness, with click-through rates rising by 15%-22%. The advertising revenue from video accounts increased by over 50% year-on-year, accounting for 35%. The advertising revenue from mini-programs grew by 50%, and WeChat search advertising revenue increased by approximately 60%

Yesterday, I reviewed Tencent's financial report and the Q&A session of the earnings call, and found that there are quite a few points to discuss regarding the advertising segment. Here’s a quick summary of the details and thoughts I gathered for everyone's reference—

1.  Advertising revenue grew by 20%, marking the 11th consecutive quarter of double-digit growth, while the gross profit of the advertising business increased by 24% year-on-year, outpacing revenue growth. This indicates that cost control in the advertising business is very effective.
    
2.  The official statement directly mentioned that AI has a significant additive effect on advertising.
    

I looked at the content disclosed by the account "Goose Factory Business Insights," which revealed that Tencent Advertising is using large models for "multi-modal generative recommendations" at the algorithm level. It claims to be leading in terms of the scale of data used for model training, and the diverse product forms within the Tencent ecosystem also provide an advantage for cross-application training.

As for the results, AI-driven advertising click-through rates have increased by 15%-22%. Those who have run ads will know that this improvement ratio is quite impressive.

1.  The application of AI in Tencent Advertising is also reflected in other areas—

The advertising platform ADQ has upgraded various types of "smart bidding," and AI advertising material creation: As far as I know, the advertising creation assistant has gone through many iterations and has a good reputation in the industry;

It has also launched the MiaoWen AI assistant and MiaoBo digital human live streaming; at the same time, products like "RuYi," which measure performance, will also see upgrades soon.

1.  On the specific business front, video account advertising: Revenue grew strongly by over 50% year-on-year, benefiting from increased traffic and transaction density, indicating that the overall market for video accounts is still growing, and the increase in transaction density suggests that WeChat e-commerce is starting to gain momentum.

The "hope of the whole village" is beginning to take over in terms of revenue. The financial report disclosed that video account advertising now accounts for 35% of the total.

Looking at competitors like Douyin and Kuaishou, I predict this ratio will eventually exceed 70%.

1.  Mini-programs (GMV) grew by 18%, total transaction volume increased by 20%, and advertising revenue related to mini-games and short dramas grew by 50%. Mini-programs are now 8 years old and continue to grow rapidly; the depth of WXG's bench is indeed impressive.
    
2.  WeChat search advertising: Revenue increased by approximately 60% year-on-year. Everyone is talking about search, with Douyin and Xiaohongshu making a lot of noise, but WeChat search is quietly making money.
    

During the earnings call, it was mentioned that this is mainly because "consumers and advertisers are increasingly interested in the search results of mini-programs."

This means that compared to traditional search, one very important advantage of WeChat search is that it can find items within mini-programs, meaning that the internal workings of mini-programs are no longer a black box. There is still a lot of potential to be explored in this regard.

1.  During the earnings call, management disclosed several key factors contributing to the robust advertising business—
    
2.  Click-Through Rate: AI has brought more precise targeting, resulting in more clicks.
    
3.  Traffic: We see that the traffic for video accounts and WeChat search is continuously growing, and the native application scenarios of AI can also bring in new traffic
    
4.  Revenue per Click: The use of generative AI for ad creative and a more complete e-commerce closed-loop transaction has brought about more advertising demand.
    
5.  Ad Load: Currently, our short video ad load rate is still at a low single-digit percentage level, while peers generally range between 10%-15%.
    

So, which of these four points is the most important?

In fact, the first point and the third point multiplied together represent the ad ECPM, which can indeed continue to improve through AI and closed-loop efficiency.

However, in my view, this does not count as Tencent's unique advantage. Logically speaking, ByteDance and Alibaba can also improve, and the financial reports of Google and Meta in recent quarters have also proven the additive effect of AI in advertising.

Therefore, I believe the second point and the fourth point are Tencent's more unique advantages—

First, looking at traffic, in my opinion, WeChat Channels and Xiaohongshu are the only two products that have continued to outperform the market growth on a super-large scale basis in the post-mobile internet era.

Next, regarding Ads Load, the "low single-digit percentage" compared to peers' 10%-15% indeed shows significant room for improvement.

Moreover, an important point is that compared to the natural Ads Load ceiling of Moments ads, which cannot be too high, the theoretical Ads Load of WeChat Channels, as a product more inclined towards content rather than social, can rival Douyin.

Considering Douyin's current scale, my statement that the future revenue share of WeChat Channels ads could reach 70% is not exaggerated at all.

1.  Of course, in addition to the above four points, I believe there is actually another important factor— the overall advertising market.

The overall advertising market largely depends on the economic market, and perhaps we can see some small signs regarding this aspect from Tencent's financial report: during the QA session about payments, management revealed the following information—

"In the past, our transaction volume has been steadily growing, but the amount per transaction has been continuously declining. Recently, we have seen an improvement in that the rate of decline in the amount per transaction has narrowed."

1.  Looking at the academic achiever's control over scores and the Versailles effect—

When discussing the resilience of Tencent's advertising, management said—

"In the second quarter, although some takeaway and e-commerce companies reduced their ad spending and allocated budgets for subsidies, which had a certain negative impact on us, our overall ad revenue still achieved a 20% year-on-year growth."

That's definitely a Versailles effect.

When asked about the future growth rate of advertising, management said—

"We are satisfied with the current growth rate. Of course, if the costs of deploying AI in the future— including GPU depreciation and other expenses— rise significantly and become a heavy burden, we may choose to accelerate the pace of ad commercialization (for example, by increasing ad load rates). However, we believe there is no need to do so at this time."

This is the reality of an academic achiever controlling scores!

1.  An important growth point for Tencent's advertising in the future is— "adding ads to AI." What has been discussed above is actually still "adding AI to ads." The management stated in this conference call—

"In the Chinese market, the model of charging users directly (which is very common in AI tools in the United States) is very difficult to implement. We are exploring whether commercialization can be achieved through advertising support in the future."

In the previous conference call, the management also made similar statements—

"As for how AI can be monetized, time will prove everything, but I believe we have already seen in the Western world that the first monetization method is through subscription models, and then over time, performance advertising will follow. I believe in China, it will start with performance advertising, and then value-added services will follow."

So, if one day in the future we see advertisements in the WeChat AI Agent's responses, please do not be too surprised.

Author of this article: Wei Xi, Source: Wei Xi Zhi Bei, Original title: "Advertising is Fierce—Ten Details and Incremental Information about Advertising in Tencent's Financial Report"

Risk Warning and Disclaimer

The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial conditions, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investing based on this is at your own risk

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> **Disclaimer**: This article is for reference only and does not constitute any investment advice.