Mixed picture for online in Asia Pacific

23 November 2009

SYDNEY: Online advertising will continue to enjoy impressive growth in Asia Pacific in the next few years, but individual countries in the region are displaying considerable diversity in this area, research from the Rubicon Project shows.

PricewaterhouseCoopers has predicted that internet advertising expenditure in APAC will climb from $11.7 billion (€7.9bn; £7.1bn) in 2009 to $18.1bn by 2013.
Despite this, some major barriers remain, mostly in the form of the fragmented nature of the market, a term that applies both geographically and culturally, the Rubicon Project's report stated.

For example, outside Australia, New Zealand and India, publishers, ad networks and brands are all required to operate in a variety of languages in order to successfully buy and sell inventory.

In China, marketing expenditure on the web is likely to surpass $2.8bn in 2009, with 60% of this revenue going to display, 15% of which will be attributable to ad networks.

Alibaba, Baidu and Google are the main networks in the country at present, but other emerging companies include AdChina, which has received investment from News Corp this year.

However, the relationship between agencies, networks and media representatives can sometimes be unclear, with agencies often receiving "rebates" for using particular portals, Rubicon said.

In Japan, internet adspend will be roughly $2.9bn this year, with a third of budgets being directed to display and half of this amount going to networks.

Techniques such as behavioural targeting and profiling are currently gaining traction in Japan, but the consolidated nature of display sales means two networks, CCI and DAC, currently dominate.

Australia is set to register annual online revenues of at least $2bn, some 41% of which will attributable to display ads, although networks will see just 10% of this latter figure.

The country benefits from a lot of international traffic from other English-speaking nations, but networks are also seen as having an "image problem" among many industry specialists, according to Rubicon.

Singapore, India and Hong Kong are due to deliver a combined total of $240 million in web spending this year, 55% of which will be accounted for by display. 

Ad networks are still establishing themselves in these nations, making it particularly difficult for foreign brands to buy up inventory, and also to coordinate regional campaigns as a whole.

More positively, the Rubicon Project's report argued locally-based networks are increasing their share of display revenues in Asia Pacific.

These services were found to be performing particularly well among "premium local brands", leaving "behavioral networks and networks representing the long tail," it added.

Data sourced from The Rubicon Project; additional content by Warc staff