China's Online Advertising Witnessed Innovative Development in 2016

Source:iResearch February 06,20174:06 PM
Despite the influence of new advertising law, China’s online advertising had innovative developments in advertising technologies and advertising forms. Online advertising has become the most important advertising form among advertisers, and streaming video ads were the trend of online advertising sector. The upsurge of socialized Olympic Games and online celebrities further accelerated the innovative development of online advertising.

Meanwhile, advertisers now pay more attention to the effect, cost and prediction of integrated marketing. The big data from advertising platforms not only helps advertisers to better communicate with clients with more efficient advertisement exposure, but also offers reference for their future adjustment of their marketing strategies. What’s more, with the upgrading of their services for enterprises, the connection between marketing and advertisers was getting increasingly close, and advertising’s impact on convention rate of advertisers’ supplies and services was increasingly direct and significant.

China's Online Adertising Revenue

Generally speaking, China’s online advertising market kept a rather fast development. In 2016, China’s online advertising revenue totaled 276.9 billion Yuan with a growth of 29.7%, slightly lower than that in 2015. The revenue is expected to exceed 500 billion Yuan in 2019, and its integrated growth rate is forecasted to be higher than 25% during 2016 and 2019. 
E-Commerce Advertising for the First Time Ranked The Top Among Online Advertising Market Segments

In 2016, a great change was seen in China’s online advertising market structure. Search engine advertising always held the largest market share in the past, while due to the policy reasons, its share for the first time shrank to less than 30% in 2016, nearly 5% smaller than the share in 2015. E-Commerce advertising had a slight share increase and took up 28.2% in the market, ranking the top among all the online advertising market segments for the first time. Other advertising forms dominant by in-stream ads in news and social platforms developed fast in 2016 and took a share of 12.9%. In-video advertising also had steady share expansion thanks to the broadcasting of dramas made by video websites, online variety shows and popular TV dramas.
China's In-stream Advertising Exceeded 26 bn Yuan in 2016

The innovation in advertising form, the application of big data and the improvement of big data analyzing ability were the main features of online advertising in 2016. Advertisers’ requirements for both advertisement exposure and effect were rising, and the effect-based advertisement gained great development. The Olympic Games, big events in entertainment industry and global public political events pushed social media, news portals, video media and vertical media to explore in-stream advertising field. As a result, China’s native in-stream advertising had an amazing growth in 2016. Its revenue attained 26.71 billion Yuan, surging 115.9% from 2015, and was expected to exceed 100 billion Yuan in 2019 with an annual growth rate higher than 50%. What’s more, the hot concepts such as online celebrities and live show platforms supported by the capital market stimulated the development of online advertising forms and innovations, and the endogenous advertising may be the future trend of online advertising.
China's Core Advertising Companies

As for core online advertising companies, Alibaba, Tencent, Qihoo 360. Tencent Video, iQiYi, Sina, Autohome and Yiche all had growth in advertising revenue, which were flat with or higher than that of the general online advertising market.

With expansion of self-made video contents and the improvement of the social + video structure, Tencent Video had outstanding performance in advertising revenue in 2016 with a growth higher than 100%. Meanwhile, iQiYi released its effect advertisement platform in 2016 and it also performed well owing to the innovative advertising forms. Qihoo 360 had good performance in advertising as well based on its big data strategy and various products, and its advertising revenue had a growth higher than 70%. Portal websites like Tencent and Sina kept exploring brand advertisements and effect advertisements. Their deep integration of native advertisements and social media enhanced the advertising effect on these social platforms and gained wider acknowledgement among advertisers. What’s more, due to the prosperity of automobile advertising sector and the innovative development of the platforms, automobile-related vertical medias like Autohome and Yiche witnessed steady growth in their advertising revenue as well. 

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