Ad Spending in China to Top $33 Billion as Marketers Flock Online

Online Advertising to Grow 37% in 2010

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NEW YORK (AdAgeChina.com) -- Ad spending in China is expected to grow 14.6% to $33.64 billion this year, according to a new report from eMarketer.

Much of this growth is the result of a rapidly expanding online consumer market in China, which has the world's most vibrant economy and the second largest consumer market. By the end of 2010, China will have 518 million internet users and 116.7 million broadband households. By 2013, there will be 840 million internet users and 179 million broadband households, according to eMarketer.

As a result, advertisers are expected to spend $3.7 billion on internet ads this year, up 37% from $2.7 billion in 2009. By 2014, online advertising spending in China is expected to reach $9.5 billion.

"Traditionally, advertising in China required tailored, culturally specific campaigns that had to be placed with a large number of individual carriers in different regions," said Michael Froggatt, a New York-based eMarketer analyst. "In contrast, the internet represents a direct line to a well-connected, young and increasingly affluent consumer segment."

While display advertising maintains a commanding 48% share of the online ad market, search is driving much of the growth. As businesses such as Baidu attract more marketers from China and overseas, spending on search ads this year is expected to grow 52.7% to $1.44 billion. By 2014, search's share of the overall market will grow to an estimated 44.5%, up from 38% this year. Online display advertising, meanwhile, will grow an estimated 34.2% to $1.78 billion this year.

"As Baidu, Google and other entries to the market continue to refine and simplify the online ad buying process, it's created a leveling effect for the advertising market in China," Mr. Froggatt said. "Now older, more traditional Chinese brands are being forced to increase investment in advertising as they find themselves competing with global brands locally."

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