Home Ecommerce Alibaba’s Mobile Investments Hit PC Pay-For-Performance Business, Company Pursues Brand Dollars

Alibaba’s Mobile Investments Hit PC Pay-For-Performance Business, Company Pursues Brand Dollars


BabaChinese ecommerce giant Alibaba Group is experiencing growing pains as it introduces mobile ad formats and weans itself from its pay-for-performance model toward one involving algorithmic-based advertising.

On the company’s earnings call Thursday, COO Daniel Zhang called pay for performance a “great discovery mechanism,” but said focus on mobile monetization could have a short-term negative growth impact on its core marketing services business.

Although it did not break out specifics, Alibaba (which missed some analysts’ Q3 expectations of $4.5 billion when it posted $4.2 billion in total revenue, $1 billion of which was mobile) conceded “continued efforts to improve the mobile user experience” hurt cost per clicks on desktops.

Subsequently, its dominant pay-for-performance model didn’t perform as well as Alibaba had hoped.

Zhang said Alibaba will focus on delivering ROI for advertisers through better optimization, improvements in its “algorithms” and shopper personalization. It’s also hoping to get brand dollars – a big reason it acquired a majority stake in programmatic ad platform AdChina.

Despite these growing pains, Alibaba is optimistic its mobile investments will pay off.

“We’ve seen sustained progress in how we monetize mobile and a greater proportion of gross merchandise volume now being facilitated on mobile,” said Joe Tsai, executive vice chairman of Alibaba Group, on the earnings call. “Our mobile Taobao app is a strong driver of commercial intent and has helped introduce a large number of new users to our retail platforms.”

Alibaba has a steady increase in its total number of monthly active users (MAUs). Its Chinese retail marketplaces drew 334 million monthly active users, a 45% increase year over year. Mobile MAUs reached 265 million total, a staggering 95% increase year over year.

“When you consider our total number of monthly active users, it surpasses the number of US residents, yet it only represents about half of Chinese Internet users,” said Tsai. “This highlights the significant growth opportunities we have in front of us.”

Alibaba made further headlines this week when Yahoo CEO Marissa Mayer announced plans to sink its Alibaba Group stock stake into a separate publicly traded endeavor, SpinCo. This gives Yahoo stakeholders a tax-free safety net on Alibaba holdings.

Must Read

Comic: TFW Disney+ Goes AVOD

Disney Expands Its Audience Graph And Clean Room Tech Beyond The US

Disney expands its audience graph and clean room tech to Latin America, marking the first time it will be available outside the US. The announcement precedes this week’s launch of Disney+ with ads in Latin America.

Advertible Makes Its Case To SSPs For Running Native Channel Extensions

Companies like TripleLift that created the programmatic native category are now in their awkward tween years. Cue Advertible, a “native-as-a-service” programmatic vendor, as put by co-founder and CEO Tom Anderson.

Mozilla acquires Anonym

Mozilla Acquires Anonym, A Privacy Tech Startup Founded By Two Top Former Meta Execs

Two years after leaving Meta to launch their own privacy-focused ad measurement startup in 2022, Graham Mudd and Brad Smallwood have sold their company to Mozilla.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters

Nope, We Haven’t Hit Peak Retail Media Yet

The move from in-store to digital shopper marketing continues, as United Airlines, Costco, PayPal, Chase and Expedia make new retail media plays. Plus: what the DSP Madhive saw in advertising sales software company Frequence.

Comic: Ad-ception

The New York Times And Instacart Integrate For Shoppable Recipes

The New York Times and Instacart are partnering for shoppable recipe videos.

Experian Enters The Third-Party Data Onboarding Business

Experian entered the third-party data onboarder market on Tuesday with a new product based on its Tapad acquisition.