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Tencent, the Chinese internet giant that owns WeChat, finally launched WeChat ads, Shanghai-based China Business News reports.|
Before the ad launch, the WeChat environment has been mostly ad-free. Brands can interact with users through official accounts, though they're quite limited in how they can reach out to their clients.
On Jan 21, WeChat began allowing contents to have a test ad format, marked "promoted" and offered by brands to promote their name and products.
Sina Corp conducted a survey, showing 88.8% of the respondants can not accept ads in their friend circles.
The WeChat team used to be concerned that launching ads in its friend circles might affect the user experience, but as WeChat now has so many users, launching such ads has become an inevitable choice.
Pang Yiming, analyst at Beijing-based Analysys International, said similar ad formats have been proven successful on Facebook, Twitter and Weibo, as such an ad format is seen affecting user experience with the smallest impact.
According to Analysys statistics, in December 2014 WeChat had over 383 million active users. Pang sees great potential for WeChat's marketing efforts.
So far, WeChat's test ads are restricted to some quality brands such as BMW and Vivo.
Tencent has been cautious in selecting ad sponsors, trying to reduce the disturbance of ads to a minimum so as not to affect users' experience.
An unnamed source at Vivo confirmed that the firm has become of one of the first ad sponsors on WeChat, with planned its first round of ad launches beginning January 22 and lasting a week.
WeChat has selected 50 ad sponsors in its first round of test ads, according to information obtained by the reporter.
According to Tencent's 2014 third-quarter financial report, the firm had ad income of 2.44 billion yuan (US$392 million), accounting for 12% of its total revenues, indicating the growth potential of its ad business.
Twitter first introduced such ad formats in July 2011, followed by Facebook, Weibo and QQ.
In Weibo's 2014 third-quarter financial report, Weibo reported net revenues of US$84.1 million, up 58% from the same period a year earlier, of which ad income surged 438% from a year earlier, becoming the most important engine for its revenue growth. While Facebook had quarterly mobile-end ad income of nearly US$2 billion, of which information-flow ads accounted for two-thirds.