China online advertising market in the 2nd quarter of 2012


According to the data released by iResearch, China online advertising market 2nd quarter of 2012 reaches ¥18.9 billion(about $3 billion), increased by 64.2%.

China online advertising market size (2010 Q1-2012 Q2)

Size of the market increases substantially in the 2nd quarter of 2012

Although influenced by the slowing-down macro-economy, China online marketing market still keeps growing rapidly.
It may be boosted by the two engines: the increasing attention on online advertising and special events. More and more companies have understood and put budget in online advertising; for example, thousands of companies open their weibo account and promote themselves on weibo every month. Besides, two important sports events: the Euro Cup and the Olympic Games also attract many companies to pay in online advertising where there Chinese sports fans would like to share and interact.
The major motivation is from some branches of the market as shown in the following chart.

Segments of online advertising in China (2010 Q1-2012 Q2)

The shares of the market changes: vertical search engine and video ads take more percentage of the market

Significant changes in market segmentation of China online advertising have undergone in the 2nd quarter of 2012. Search engine ads (shown in green bar) still hold the 1st position, taking 36.3% of the market. Following is VI (visual image) advertising (shown in yellow bar), with 27.7% of the market. However, VI advertising loses its share greatly. Its share in the market drops from 45.3% in 2010 Q1 to 27.7% in 2012 Q2, by 18.6%.
On the contrary, Vertical search engine (shown in blue bar) such as Taobao (No.1 online shop in China) increases greatly in these two year: from 7.3% to 18.3% by 11%.
Another segment performs well is video advertising which is shown in red. It includes movie or placement such as ad placement in movies and TV programs. It doubled its share within 1 year.

Contribution of the growth from each segment

Vertical search engine and video ads contribute in the growth of the market

The size of the online advertising market of China has increased ¥7.4 billion ($1.2 billion) from 2010 Q1-2012 Q2. Within this ¥7.4 billion, ¥2.44 billion of it is from Search engine ads and video ads contributes another ¥1.04 billion. Half of the total growth comes from search engine ads and video ads. (source: iResearch)
It seems that companies are now more interested in accurate and multi-media ads than massive plain ads. That may explain why search engine ads and video ads increase so rapidly in China.

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