Online advertising surges to $11.7 billion

E-commerce companies become the 'most favoriate' platforms for ads

The turnover of China's online advertising market hit 73.1 billion yuan ($11.7 billion) last year, a jump of 48.4 percent compared with 2011, said an Analysys International report. Online search and electronic-commerce were the biggest contributors.

Internet search engines remained the major profit driver throughout the industry last year but, with the growth rate of Chinese people going online for the first time slowing, online search providers encountered difficulties transferring eyeballs into profits, said the report.

Baidu Inc, the provider of the country's most used search engine, took about 80 percent of the market share in terms of revenue last year, followed a long way behind by Google Inc and Sougou.com, said a separate Analysys International report. Both Google and Sougou took less than 20 percent of the total revenues in the search sector.

Baidu earned more than 22 billion yuan in advertising revenue last year, making it the country's most profitable online advertising platform. Google registered 17.2 billion yuan in advertising revenue during the same period.

Although Baidu was able to dominate the Internet search market in China, it is still worth noting the mounting threat from search engines specializing in the mobile Internet sector, analysts said.

Mobile Internet companies have become strong competitors in splitting traffic among traditional Web firms, said the report. Mobile Internet - as an emerging business - proved to be weak in monetizing the growing traffic.

The e-commerce sector was another major advertising platform in the industry.

Because of robust traffic to websites such as taobao.com and tmall.com, e-commerce companies became the "most favorite" platforms for advertisements, said Beijing-based consultancy iResearch Inc.

Taobao.com, the largest customer-to-customer retail website in the nation, registered more than 17 billion yuan in advertising revenue, making itself the second biggest online advertising platform after Baidu.

Data from China Internet Network Information Center showed that of the 564 million Internet population in China, about 400 million were online buyers.

Research from iResearch indicated e-commerce may contribute more revenue to the online advertising business. Roughly one-third of Internet-based advertising turnover will be generated by e-commerce companies by 2016, making the sector the biggest marketing platform.

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