As the internet industry enters a phase of intensified competition for existing users, advertising revenue—the core monetization channel for digital platforms—serves as a barometer for sector development. In the fourth quarter of 2025, four major internet giants—Tencent, JD.com, Alibaba, and Baidu—released their advertising business results. Tencent and JD.com reported steady growth rates of 17% and 15%, respectively, while Alibaba and Baidu experienced slower growth and increased pressure. These divergent performances reflect broader trends shaping the future of the advertising industry.

**Divergent Advertising Performance Among the Four Platforms**

Tencent reported full-year 2025 revenue of RMB 751.7 billion, with marketing services revenue increasing 19% year-over-year to RMB 145 billion, driven by higher ad prices and increased ad impressions. In the fourth quarter, marketing services revenue reached RMB 41.1 billion, up 17% compared to the same period last year. Improvements in AI-powered ad targeting and expanded closed-loop marketing capabilities within the WeChat ecosystem contributed to enhanced ad performance and higher ad prices, serving as key growth drivers. Ad impressions also saw a slight increase due to improved user engagement and a modest rise in ad load. Tencent upgraded its advertising technology infrastructure and launched the AIM+ intelligent advertising product suite, enabling it to maintain a lower ad load than peers while achieving above-industry revenue growth.

Alibaba’s customer management revenue, which includes advertising and commission fees, reached RMB 10.264 billion (approximately $1.468 billion) in the fourth quarter of 2025, a 1% increase year-over-year. This growth rate slowed compared to previous quarters, influenced by macroeconomic conditions, timing differences related to the Lunar New Year holiday, and increased investments in user benefits. While core e-commerce advertising has entered a stable phase due to industry competition and shifting consumer habits, the adoption of AI-powered marketing tools like "Site-wide Promotion" is gradually unlocking advertising demand from small and medium-sized merchants, providing a recovery momentum for the advertising business. At the same time, rapid growth in Alibaba Cloud and expansion in instant retail are creating new growth opportunities within the Alibaba ecosystem. The advertising business is transitioning from traditional e-commerce marketing to omni-channel, full-scenario marketing. Despite short-term growth pressure, this shift is reshaping long-term commercial value.

JD.com reported full-year 2025 platform and advertising service revenue of RMB 107.1 billion, an 18.9% year-over-year increase, accounting for approximately 8.2% of total revenue. In the fourth quarter, platform and advertising service revenue reached RMB 30.6 billion, up 15% year-over-year and 12.6% quarter-over-quarter. JD.com’s advertising growth is supported by refined operations within its retail ecosystem and integrated traffic management. The continued improvement of its third-party merchant ecosystem has led to an increase in both the number of paying merchants and their advertising spending, highlighting the conversion value of e-commerce ads. Additionally, new businesses such as JD.com’s food delivery service synergize with retail operations, bringing incremental traffic to the advertising business. AI advertising tools further optimize traffic allocation, aligning ad placements more closely with user consumption needs. Amid intensifying competition in e-commerce advertising, JD.com has carved out a stable growth path by deeply integrating consumption and marketing.

Baidu’s traditional advertising revenue, which includes search and feed ads, declined 15% year-over-year to approximately RMB 59.3 billion for the full year 2025. In the fourth quarter, traditional ad revenue fell 26.2% to RMB 12.3 billion. This segment, once Baidu’s core revenue source, has faced sustained pressure from market competition, changes in user behavior, and the impact of AI technology. It is worth noting that Baidu has restructured its reporting segments under "Baidu Core," which includes traditional advertising and new AI businesses. The proportion of traditional advertising revenue within Baidu Core decreased from approximately 58% in 2024 to about 39% in 2025. Baidu’s advertising challenges stem from increased competition in the search ad market and a shift in user attention toward short-video and social platforms. In response, Baidu is accelerating the integration of its Ernie large model into advertising services, developing AI-native marketing solutions and focusing on new scenarios such as AI-powered search and smart recommendations to rebuild the competitiveness of its advertising business.

**Three Key Trends Shaping the Advertising Industry**

The varying growth rates and strategic focuses of these four platforms reveal that the internet advertising industry has moved beyond extensive growth into a new era driven by technology, refined scenarios, and performance-based value. Three core trends are becoming increasingly clear.

**Trend 1: Reshaping Traffic Dynamics—Private Traffic and Closed-Loop Ecosystems as Core Growth Engines**

In the past, internet advertising relied heavily on broad placements in public traffic pools. Now, with traffic红利 diminishing, private traffic and closed-loop ecosystems have become central to advertising growth. Tencent leverages the WeChat ecosystem’s integration of social, content, and transaction scenarios to build a unique closed-loop marketing system where users complete the entire journey from browsing and interaction to purchase within the ecosystem. This significantly improves ad reach and conversion rates, enabling Tencent’s advertising business to maintain a growth rate above 15% for ten consecutive quarters. JD.com capitalizes on e-commerce consumption scenarios to create a "shopping + marketing" closed loop, where ads directly connect with consumer demand, achieving both brand exposure and sales conversion. Alibaba is also accelerating the integration of e-commerce, local services, and cloud service scenarios to break down traffic barriers and build an omni-channel marketing ecosystem. In contrast, platforms relying solely on single public traffic scenarios face clear growth limitations. This underscores that future competition in the advertising industry will not be about traffic scale but about the completeness of the ecosystem and the sophistication of traffic operations. Platforms that can offer end-to-end, closed-loop marketing services will continue to gain market share.

**Trend 2: Widespread AI Adoption—Advertising Enters an Era of Intelligent Efficiency**

The advertising performance of these four platforms consistently demonstrates that AI technology has become a critical engine for growth. Tencent uses AI to optimize ad targeting, creative generation, and placement strategies, leading to a significant increase in eCPM. JD.com employs large AI models to improve traffic allocation efficiency, accurately matching merchant ads with user demand. Alibaba’s AI marketing tools lower the barrier for small and medium-sized merchants to run ads, boosting ad monetization rates. Baidu is leveraging its large model to create AI-native marketing services in an effort to reverse the decline of its traditional advertising business. AI is transforming the advertising industry comprehensively and profoundly—from front-end user profiling and AI-generated ad creatives to mid-campaign precision placement and real-time optimization, and finally to back-end performance analysis and data attribution. AI is replacing manual operations, significantly reducing ad placement costs while improving efficiency and conversion outcomes. For advertisers, AI enables more precise and efficient marketing campaigns. For platforms, AI provides the technological foundation to enhance ad quality, improve efficiency, and overcome growth bottlenecks. In the future, AI will become a standard requirement for marketing.

**Trend 3: Advertisers Prioritize Performance—Integration of Brand and Effect Becomes Mainstream**

Changes in the macroeconomic environment have made advertisers more cautious with marketing budgets, shifting the core focus toward performance-driven campaigns and measurable conversions. This marks a departure from the earlier model that emphasized brand exposure alone, directly influencing the growth logic of advertising platforms. E-commerce platforms, with their inherent advantage of "ads directly driving transactions," have become priority destinations for advertiser budgets. The e-commerce advertising businesses of JD.com and Alibaba have maintained resilience. Social and content platforms, through closed-loop ecosystems, combine brand exposure with sales conversion—the synergistic value of Tencent’s Video Channels and Moments ads continues to stand out. In contrast, traditional search advertising, if unable to deliver conversion closed loops, struggles to meet advertiser demands solely through exposure, leading to growth pressure. At the same time, small and medium-sized merchants have emerged as a new force in advertising. With limited budgets and a stronger focus on immediate conversions, they are pushing platforms to develop lightweight, cost-effective AI marketing tools, further driving the industry toward performance-based and inclusive advertising.