China’s 2007 online ad market may exceed 1.3 Billion US Dollars

Olympus AD on big screen
credits: spiced fish

China’s online advertising market is likely to exceed ten billion yuan (1.3 billion U.S. dollars) this year, a research report said. The figure represents a 114.6 percent increase from the 4.66 billion yuan of last year.

In October, the nation’s online advertising revenues hit 870 million yuan, lifting the market size to 7.5 billion yuan in the first ten months, according to the report from Nielsen, a leading global information and media company.

The report noted that China’s web advertising market will post faster growth in the coming months as the 2008 Beijing Olympics nears and businesses from home and abroad seek to cash in on the nation’s huge purchasing power.

The growth rate of China’s online advertising, one of the most successful business models for Internet firms, was higher than that of broadcasting advertising and magazine advertising.

Sina, Netease, QQ, and Sohu, China’s four largest Internet portals, are big gainers of the robust online advertising growth. Their total advertising incomes exceeded 100 million U.S. dollars for the first time in the third quarter of the year.

The report also shows that entertainment and fast consumable products makers have overtaken financial and property firms as the largest spenders on web advertising.

Apart from brand logo advertising and pay-per-click search engine, China’s online media are exploring new ways for advertising such as video ad, game ad and blog ad, among others.

“The blog advertising is still in its infancy. If successful, it will create more advertising carriers and tactics,” said Du Hong, Vice President of web portal Sina.

“Blogads’ will not work in short period,” cautioned Li Zhuohuan, CEO of jiwai.de, a China’s Twitter-clone microblog community, adding that bloggers that enjoy high readership usually do not want those poorly-made ads to distract or annoy their readers.

Frontiers like bokee.com and blogcn.com did give it a shot, promoting services like “Blogad Revenue Share”, meaning that bloggers will get a slim share of the profit by every ad click-through.

U.S. online ad spend in 2007 is expected to reach 20 billion U.S. dollars, up 26 percent in the first three quarters, according to an Interactive Advertising Bureau (IAB) report.