Revenue: China online advertising revenue reached 75.31 billion Yuan in 2012 and entered into a period of steady growth
According to the latest data of Chinese online advertising in 2012 released by iResearch, China online advertising revenue reached 75.31 billion Yuan, up 46.8% over last year. The growth rate was comparatively slow and it indicates that online advertising market has entered into a relatively steady increasing period.
Along with the increasing number of internet users and the change of their behaviors, advertisers need to find a more effective way to reach more consumers. Besides, online advertising industry still has room to improve and advertisers started to pay more attention to the marketing effect. Under the circumstances, the Big Data, the Real Time Bidding (RTB), a lot of DSP（Demand-Side Platform）hotted in online advertising market in 2012 while emerging advertising companies changed the online advertising industrial chain and the new marketing techniques were adopted in order to improve precision of advertising. Four forces from internet users, advertisers, advertising companies and media drove the development of online advertising market with highest growth rate across the whole advertising market.
iResearch analyses that the growth rate of online advertising revenue become slower due to the following three reasons. Firstly, after experiencing high growth rate over a decade, online advertising has entered into a more mature period seen from the perspectives of both the media and advertising forms. Secondly, the advertising services of key enterprises are more mature and growth point of online advertising in the future lies on reform and innovation of these enterprise. However, the mobile advertising is still in its early stages of development and it will continue to face the difficulty of monetization. Thirdly, the weakness of macro-economy and the decline of netizens demographic dividend will also influence the development of online advertising market to some extent.
Landscape: search advertising stayed stable while the e-commerce and video advertising rose.
In 2012, the growth of search engine market kept the same growth rate with that of the whole online advertising industry and accounted more market share ticked up a little. Meanwhile, the e-commerce platform and independent video websites still kept a rapid growth and their market share increased.
Across the whole market, e-commerce platform increased 5.8% to 23.3% due to advertising of Taobao. The e-commerce platform itself is of great marketing value and its traffic is very huge. Besides, the competition between platforms relies a lot on marketing and advertising. Meanwhile, the sustained and rapid development of online shopping doesn’t only provide marketing platform but also expands the marketing space for companies. The progress of e-commerce industry breaks the limitation on traditional marketing and products sales and links marketing and selling together. Thus, e-commerce advertisers are willing to do marketing since they can take full advantage of the pay-for-performance marketing strategy which increases the conversion rate of orders.
The number of China internet users reached 564 million in 2012. The penetration of online video audiences outstripped search in May 2012 and the online video became the most popular internet service. The hot teleplays and TV shows brought a high notability and traffic for online video industry. Consequently, the advertisers’ demand for the cooperation of TV channels and the websites became stronger and the value of online video advertising increased. Under the trend of multi-channel advertising, more and more advertisers started to budget more for online video advertising. Therefore, by revenue, share of video websites in internet service increased by 0.6% to 7.7% in 2012 and was expected to boost further.
iResearch predicts that by 2016, the advertising revenue of search engine and e-commerce platform will occupy 30% of the total online advertising revenue and advertising revenue of the rest medias will also keep a stable increase rate. The various media cann’t only satisfy individual demand for the marketing but also promote the reform of the online advertising market.
Key Players: Baidu and Taobao were playing leading roles and the market influence of key media increased
In 2012, the advertising revenue of Baidu exceeded 22 billion Yuan and ranked the first across the whole market. The value of transaction of Taobao exceeded a trillion Yuan and its advertising revenue also increased rapidly, which were over 17 billion Yuan. Advertising of Baidu and Taobao are far ahead of the rest of online advertising companies.
Companies positioned in the second group, including Google China, Tencent, Sohu, Sina, Youku Tudou, Soufun and so on, had an annual advertising revenue of above 2 billion Yuan in 2012, among which Tencent moved up one notch and others remained the same. Youku and Tudou ranked the seventh advertising revenue of 2.04 billion Yuan after their amalgamation.
iResearch believes that in 2012, the Internet advertising revenue exceeded 50 billion Yuan, which outstripped that of newspapers, and in 2013 it will be close to TV advertising revenue and reach 100 billion Yuan. The rapid growth of core media will significantly increase the marketing value and reflect the trend of online advertising.