Chinese adspend growth to slow

04 June 2009

SHANGHAI: The growth rate of China's online ad market is set to slow from 105% last year to just 36.7% in 2009, as the global economic slowdown causes marketers to pare back their budgets, iResearch reports.

According to the research firm's figures, internet adspend in the country increased in value from 1.06 billion yuan ($155m; €110m; £95m) in 2007 to a total of 2.17 billion in 2008.

It expects this figure to rise to 2.97 billion yuan this year, and to 8.56 billion by 2011, as marketers direct more funds into this rapidly-growing sector.

Among the factors encouraging this trend will be an increasing number of "traditional advertisers" boosting their activity on the web, and a consolidation in the sector as whole.

Ding Li, an analyst at iResearch, suggested that the "integration and regrouping" in the online space in China, led by portals including Baidu and Xunlei, helped to "fuel the growth" of the market in 2008. 

However, he also argued that "many advertisers slashed their advertising budget in face of the global economic slowdown," and iResearch further warns that improved service quality and measurement tools will be required if revenues are to continue to grow.

Data sourced from TMCNet; additional content by WARC staff