• by Jack Loechner , Staff Writer @mp_research, August 29, 2006

According to Analysys International, Internet based provider of business information about technology, media and telecom industries in China, China's Internet advertising market will reach RMB 6.87 billion in 2008 as shown in its recently released report "China Internet Advertising Market Annual Report 2006".( That equates to .860 billion US ($860 million)

According to the report, the China online advertising market size, including brand advertising and search engine advertising, reached RMB 3.229 billion in 2005, increasing 59.83% year over year. though the Internet advertising market is expected to grow continuously, as the search engine market faces adjustment in 2007, the market growth would slow down. By 2008, stimulated by the Olympic 2008 in China, the market will face a new initiation and the market size will reach RMB 6.87 billion.

(This, while Universal McCann's forecaster, Bob Coen, now forecasts that the U.S. Internet ad spend, excluding search, will amount to $9.705 billion this year, or a 25 percent increase from 2005. (that equates to 77.5 billion RMB). In addition, the population of China (1,306,313,812) compares to the population of the United States (295,734,134) at almost 4 1/2 times as large.)

1 US Dollar = 7.97979 Chinese Yuan Renminbi

1 Chinese Yuan Renminbi (CNY) = 0.12532 US Dollar (USD)

In 2005, brand advertising market size in China reached RMB 2.302 billion, accounting for 71.3% of the total market and increasing 54.91% Year over Year. The Search engine advertising market reached RMB 927 million in 2005, accounting for 28.7% of the total market, increasing 73.52% YoY.

As advertisers increased spending on Internet advertising and improved recognition of the importance of search engine marketing, search engine advertising market developed rapidly in 2005, while China's 2005 Internet advertising market concentration degree further increased.

The market share of vendors who have an annual revenue of over RMB 400 million accounted for 59.75% of the total market. With the rapid development of search engine advertising, the market share of brand advertising will decrease to 67.63% in 2006.

More on this subject can be found in Analysys International's research report "China Internet Advertising Market Annual Report 2006," linked here.