According to the data from the Securities Times, Xinda Securities released a research report stating that the overall advertising market expenditure in 24H1 is under pressure, with the ladder media channel performing well. Among advertising channels, the elevator LCD channel has the highest year-on-year growth rate, with the growth rates of train/high-speed rail stations, elevator LCDs, and elevator posters being 9.4%, 22.9%, and 16.8% respectively. The growth rate of advertising on internet e-commerce platforms has slowed down, while advertising on social short video platforms has shown outstanding growth. Budgets of brand advertisers are restricted by the economic environment. The emergence of new content formats such as short dramas and AI with KeLin technology is expected to drive the improvement of retention rates for users on the Kuaishou platform.

Elevator media: The overall advertising market expenditure in 24H1 is under pressure, with the ladder media channel performing well. Among advertising channels, the elevator LCD channel has the highest year-on-year growth rate, with the growth rates of train/high-speed rail stations, elevator LCDs, and elevator posters being 9.4%, 22.9%, and 16.8% respectively. The advertising expenditure of other channels has declined to varying degrees year-on-year. Focus Media's ladder media channel advantage remains stable, with a higher year-on-year revenue growth rate in 24Q2 than 24Q1.

The growth rate of advertising on internet e-commerce platforms has slowed down, while the growth rate of social short video advertising has been prominent. The growth rate of social advertising has been good, and budgets of brand advertisers are restricted by the economic environment. 1) Tencent: Tencent's online advertising growth rate in 24Q2 is +19%, achieving double-digit positive growth for 7 consecutive quarters, showing excellent performance. 2) Bilibili: In 24H1, the number of company advertisers grew by over 50% year-on-year, and the advertising for e-commerce and games maintained high growth to drive business growth. 3) Kuaishou: The advertising growth rate in 24Q1 was +27%, and the growth rate in 24Q2 remained stable at +22%. The emergence of new content formats such as short dramas and AI with KeLin technology is expected to drive the improvement of retention rates for users on the Kuaishou platform. The advertising growth rate on internet e-commerce platforms has slowed down, with Alibaba's 24Q2 related advertising business revenue increasing by only 1% year-on-year.

According to the industry statistics, as per the Shanwan industry division, the revenue of some consumer sector industries is showing signs of recovery, and the sales investment budget is not overly pessimistic. For most sub-industry sectors in 24H1, the year-on-year growth rate of sales expenses is higher than the year-on-year growth rate of revenue. Xinda Securities believes that on one hand, this can reflect the fact that the economy is still in a recovery trend, but the company's advertising and sales expense budgets are not overly pessimistic. In Xinda Securities' industry sample, the number of companies with a positive sales expense rate in 24H1 is higher than those with a negative rate. Under the influence of the macroeconomic environment, sales expense rates in different sub-industry sectors have shown different performances. Growth and expansion-oriented companies are increasing their investment.

Overseas advertising: In 24Q2, the total advertising revenue of the four major technology companies slightly declined but still remained within a stable range. AI is gradually optimizing the user search experience. In the second quarter of 2024, the total advertising-related business revenue of the four major overseas technology companies (Microsoft, Google, Meta, and Amazon) reached 118.885 billion USD, with a year-on-year growth rate of +15.1%, slightly slower but still within a stable growth range. Among them, Google's absolute revenue value is the highest at 64.616 billion USD, followed by Meta at 38.329 billion USD, Amazon at 12.771 billion USD, and Microsoft at 3.169 billion USD, with year-on-year growth rates of 11.1%, 21.7%, 20%, and 19% respectively. 1) Meta ads: With a high base, Meta's ad revenue still increased by 22% year-on-year to 38.33 billion USD. 2) Google ads: The advertising revenue in 24Q2 was 64.616 billion USD, with a year-on-year growth of +11%. Search ad yoy was +13.8%, YouTube ad growth was +13%, and network affiliate ad growth was -5.2%. 3) Microsoft ads: The advertising-related revenue in 24Q2 was 3.169 billion USD, with a year-on-year growth of 5.6%. Excluding traffic costs, the year-on-year growth rate was +19%, exceeding market expectations.

Investment advice: Xinda Securities recommends focusing on Tencent (00700), Bilibili (09626, BILI.US), Google (GOOGL.US), Meta (META.US), and Microsoft (MSFT.US).

Risk factors: macroeconomic fluctuations, risks of AI empowerment falling short of expectations, risks of statistical deviations.