As the pandemic forces people to spend more time at home, they are increasingly turning to their electronic devices, including smartphones, computers, tablets, gaming consoles, and smart speakers, according to a May 2020 survey by GlobalWebIndex.

Tencent endured the lockdowns well because its ad business increasingly centers on gaming and education services, and usage of these products increased dramatically in Q1. Last year, the company saw a 17.7% growth rate in ad revenues, and we estimate that number will still reach 15.5% this year, even in a recession.

In addition to linear TV, the time people spend viewing video will be fragmented between subscription video on-demand (SVOD) services, free ad-supported streaming services, virtual cable packages, video products from social media platforms and even online video games.

While gaming and entertainment are the most common use cases, more consumers are expressing interest in shopping-related AR activities. According to our March 2020 forecast, there will be 43.7 million US social network AR users this year, representing 13.2% of the US population, 15.1% of internet users and 20.8% of social network users.

Facebook is relatively less exposed to the travel industry and has attracted advertisers in categories that continued to transact heavily during stay-at-home orders, including direct-to-consumer ecommerce and digital gaming. Within the Facebook family, the spotlight continues to shine ever brighter on Instagram.

Not only are homebound people using VR headsets to play video games, explore virtual travel destinations and partake in online entertainment, they’re seeking human interaction through social VR platforms such as Rec Room, AltspaceVR, Bigscreen and VRChat. Businesses are also experimenting with VR platforms to train employees, hold conferences, collaborate on projects and connect employees virtually.

Entertainment includes amusement and recreation, box office, film, music, TV and video games (excluding video game hardware).

Tencent was able to leverage the extra time that consumers spent using WeChat and playing its video games to increase its take by 17.7% YoY in 2020. Alibaba, too, outperformed our mid-2020 expectations by several percentage points. Of the major players, only Baidu—overly reliant on search and already struggling before the pandemic—saw a net contraction in digital ad revenues last year.

Among internet users ages 16 to 64, 39% of respondents polled in France and 21% of those in Germany were spending more time with computer or video games. Many were also devoting more time to video streaming services, social media or messaging platforms. More than one in eight were spending more time with apps or audio streaming services.

While introducing its soon-to-be-available $400 software development kit (SDK), the company said the system is ideal for gaming and other VR and AR applications, where users can “have their brain directly connected to the digital world, bypassing their physical body and creating a fully immersive experience.”.

The US computing products & consumer electronics industry will be the fastest growing digital ad spender in 2020, increasing its spend by 18.0% in a year when the total US digital ad market will only grow by 1.7%.

*Non-internet activities refer to activities that do not require an internet connection, such as playing games offline, reading or listening to content that has already been downloaded or viewing photos.