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Online ad revenues hit new high

News, 10 February 2015

SHANGHAI: Online advertising revenues in China grew 40% in 2014 to reach a record 154bn Yuan, although this was slightly down on the previous two years, a recent industry report has shown.

According to iResearch Consulting Group, the Chinese technology research firm, this suggests the industry may be stepping into a "maturity age".

Online advertising revenue growth was 42.3% in 2013 and 43.8% in 2012, when the market was valued at 77.3bn Yuan. Despite last year's modest decline in growth that still means ad revenues have doubled in just two years.

High year-on-year growth rates are expected for the next four years, the report forecast, but the trend of slowing growth is set to continue.

Revenues are expected to be worth 209.3bn Yuan in 2015, representing growth of 35.9%, 272.4bn Yuan in 2016 (+30.1%), 332.7bn Yuan in 2017 (+22.1%) and 393bn Yuan in 2018 (+18.1%).

Returning to last year's results, key word search advertising made up 28.5% of total spend, followed by ecommerce advertising (26%), a slight fall compared with 2013, and then brand graphic advertising (21.2%).

Advertising on portals and social media increased, largely driven by the social advertising platforms Guangdiantong and Weibo, which are owned respectively by the tech companies Tencent and Sina.

This meant that internet enterprises were more efficiently matching "advertisement demand with advertising sources via data analysis and technology", the report said.

Elsewhere, in-video advertising also delivered a high growth rate, built on widespread interest in last year's FIFA World Cup in Brazil and a number of popular variety shows, such as Voice China III.

"Well-known brand advertisers attached more importance to online video and their increasing online video advertising budget contributed to growth," the report noted.

Data sourced from iResearch Consulting Group; additional content by Warc staff