Mobile adspend set for growth in China

25 September 2009

BEIJING: Mobile advertising revenues are set to register substantial growth in China in the near future, as more consumers in the country adopt the growing range of services which are now available via their handsets.

There are around 600 million mobile phone subscribers in the world's most populous nation at present, 155 million of which regularly access the mobile web.

Within this latter group, 40 million consumers use mobile search, according to figures from the government, with Google and Baidu each responsible for around a quarter of the market.

Analysys International, the research firm, has estimated that mobile TV advertising spend rose by 56% in the first half of 2009 in China, to a total of 788 million yuan ($115m; €79m; £72m).

Similarly, the company reported that the number of search enquiries made via cellphones rose by 120% in the second quarter of this year, to 272 million "clicks" in all.

Advertising revenues through this channel are also set to almost double by 2010 from the figure of 754 million yuan recorded last year, it predicts.

"For the mobile search market, the number is still small but the growth potential is extremely high. It is an important area," Li Yinan, Baidu's chief technology officer, said.

Dick Wei, an analyst at JPMorgan, added that "the market is still young, so it is hard to say, but with 3G a lot more people will use mobile search because the data speed allows them to get on the internet."

Tencent, which runs a popular online instant messaging service, is also said to be looking into the possibility of developing its presence on this medium.

"It's going to take some time for them to figure out what is the right business model to generate revenue on the mobile platform. The easiest one, though, is instant messaging," said Elinor Leung, an analyst at CLSA.

Data sourced from Reuters; additional content by WARC staff