Online video attracts big advertisers in China

28 May 2009

BEIJING: Coca-Cola, Nike and General Motors are among the multinational brands that have increased their advertising activity on Chinese video-sharing websites like Tudou and Youku, and these portals are expected to see a large upturn in both advertiser interest and user numbers.

CR-Nielsen predicts that online adspend in China will increase by at least 30% in 2009, while Media Partners Asiaforecasts that total ad revenues in the country will increase by around 9% this year.

Alongside Coca-Cola, other major advertisers that have run ads on Youku include Honda and Lenovo, and the web portal has also signed partnership deals with Nokia and Universal Pictures.

PepsiCo, Intel and MTV have all "tested" ads on Tudou according to the company, which claims to be China's biggest video-sharing site, as does Youku.

Internet video revenues in China – the majority of which are drawn from advertising – reached 98.1 million yuan ($14.4m; €10.4m; £9.0m) in the first quarter of 2009, up by over 110% on an annual basis, Analysys International estimates.

Liu Tong, a researcher at the company, argues that the "online video market income hasn't been influenced by the global financial crisis, and advertisers recognise the value of the market."

Tudou has approximately 40 million users, and around 40,000 new clips are uploaded to the video-sharing site each day, although it has not made a profit since it was established in 2005.

Alongside further developing its online activities, the portal is in talks with handset manufacturers about making its content available on mobile phones.

Wang Wei, its ceo, argues online videos "typically target people between the ages of 15 and 30, who often surf online for several hours a day but seldom watch TV," an appealing audience for marketers.

In-keeping with this sentiment, the China Film Group, one of the country's biggest production and distribution companies, plans to release around 150 programs, with a budget of up to $1 million each, solely on the web, and a similar amount of content on mobile phones.

Three months ago, China's State Administration of Radio, Film, and Television ruled that only video of a sufficient quality to be shown on TV or in cinema should be available online.

Data sourced from Shanghai Daily; additional content by WARC staff