China’s Online Advertising Development
3 min readOnline advertisement refers to the commercial advertisement，using pictures，text or multi media via Internet.
The initial form of online advertisement was the banner，similar to the traditional printed advertisements.Currently，various online advertisement forms are created and attracting more and more clients.
The Online advertisement features are: wide spread range, strong interactivity, strong pertinence, countable audience amount, real time, flexibility, low cost etc.
Online advertisements have dual attributes of compulsion and user dominance. The industry chain of online advertisement comprises advertiser, agent, online media, online advertisement technology suppliers and operators of online advertisement platforms.
Industrial Chain of Online Advertisement
The Relevant technologies of online advertisement mainly include advertisement production technology and advertisement supervision technology.
As a kind of new advertisement mode, online advertisement, which is growing along with the development and popularization of Internet, differs from traditiona advertisement in the view of the charging mode, which includes CPA, CPP, CPM, CPC, LEAD, monthly payment and so on.
Expenditure of Online Advertisement in America
Although America is the source region of online advertisement, the online advertisement sti1l takes small proportion in the advertisement market. In 2004, the expenditure of online advertisement only took 3.7% in the total advertisement expenditure, which was a little higher than 3% in 2003.
0verseas Online Advertisement Markets
Online advertisement in Japan is greatly affected by traditional marketing method, representing an integration of online advertisement, TV advertisement and broadcasting advertisement.
From 1995 to 2003, online advertisement market in Korea maintained a stable growth rate. In Europe, online advertisement in Britain has the highest growth rate. Search engine advertisement is the main form of online advertisement in Europe. The enterprises of IT and communication industries are the main advertisers.
Development status of online advertisement industry in China In 2003, SARS brought a big development opportunity to online advertisement industry. In 2003, China’s online advertisement market scale reached RMB ￥1.08 billion, increasing by over 100% compared to RMB ￥490 million in 2002. In 2004. online advertisement market in China (except search engine) has increased from RMB ￥1.08 billion to RMB ￥1.9 billion with a growth rate of 75.9%, indicating that whole online advertisement market maintains a high-speed growth trend.
Considering the market segmentation of online advertisement, the advertisement of online services, IT products and real estate are taking the major market shares. In 2005, the proportion of online service advertisement kept stable, floating around RMB ￥110 million. Advertisement of IT products showed a fluctuant increase.
In 2006, Web portals are still the main medium for online advertisement. Sina and Sohu together occupied 55% shares of the total online advertisement market.
In 2005, online advertisement supervision has become a hotspot for competition. ChinaRun Technologies Inc, Chinanet and www. adjyc. com etc all promoted their own supervision system for online advertisement.
Analysis on overseas and Chinese leading online advertisement companies Due to the wrong market strategies and measures after the consolidation, the Market share for Doubleclick declined in 2004. Although it made profit in 2004, multiplied by 2 compared to the same period in 2003, it was still purchased by Hellman $ Friedman LLC with a fund of USD $1.1 billion.
Valueclick maintained a high growth rate.Media service shared its ma jor revenue. Except portals，the majority of Chinese online advertisement website owners adopted the mode alliance.The traffic of many medium and small websites converges to considerable larger traffic in order to take more market shares.
Development trends of online advertisement
The development trends of online advertisement include:various forms. increasing interactivity，stable rise of search engine advertisement market scale，fiercer competition，better industrial chain and reliable supervision system etc.
The market scale of online advertisement in China reached RMB ￥8.2 billion in 2006（including search engine advertisement）.
