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Analysys: The market size of China's Internet advertising providers reached RMB 70.25 billion in 2016Q4.
According to the data in the Quarterly Monitoring Report on China's Internet Advertising Market in 2016Q4 released by Analysys Industry Database, the market size of China's Internet advertising providers reached RMB 70.25 billion in the fourth quarter of 2016, with an increase of 4.5% over the previous quarter and an increase of 13.1% over the same period last year. As the industry was mature, the overall growth of market size further slowed down, and the industry needed to find a new impetus for growth.
  • 06 Apr, 2017
  • New media
  • 97
Analysys: 
According to the data in the Quarterly Monitoring Report on China's Internet Advertising Market in 2016Q4 released by Analysys Industry Database, the market size of China's Internet advertising providers reached RMB 70.25 billion in the fourth quarter of 2016, with an increase of 4.5% over the previous quarter and an increase of 13.1% over the same period last year. As the industry was mature, the overall growth of market size further slowed down, and the industry needed to find a new impetus for growth. 
From the perspective of advertising form and structure, in the fourth quarter of 2016, the market share of keyword advertising was 34%; video advertising, 27.6%; brand graphic advertising, 24.9%; other forms, 12.8%; email advertising, 0.7%. In 2016, mobile advertising in the forms like in-app video, OTV and information flow was favored on the market. The trade share of video advertising and brand graphics advertising increased significantly compared to 2015, while that of keyword advertising represented by search engines and vertical websites continued to decrease. The increase in revenue from advertising in the form of keyword was relatively more dependent on user traffic growth. In the market context of shrinking flow dividends, the growth of the size of keyword advertising market slowed down. Besides, since the search engine market was affected by the policy, the industry was in a callback period, and the growth of market size was weak, directly affecting the market share of keyword advertising. 
According to the data in the Quarterly Monitoring Report on China's Internet Advertising Market in 2016Q4 released by Analysys Industry Database, for the revenue market shares of China's Internet advertising providers in the fourth quarter of 2016, Alibaba accounted for 26.5%, Baidu accounted for 23.3%, and Tencent accounted for 11.4%, ranked the first three on the market, respectively. 

Alibaba became the No. 1 Internet advertising provider by surpassing Baidu. On the one hand, due to the effect of rectification of search engine providers and other events in the period, the growth of search engine providers generally slowed down. On the other hand, since the Internet industry entered from the "portal-search" era into the e-business era, more of the users' life behaviors were shifted to the Internet in the process. Internet has been a channel for the users to have access to information and a carrier for the users to have access to products, services, corporate brand communication, product promotion and other diversified functions. E-commerce platforms, O2O platforms and other Internet businesses centered on transactions have been closer to the users' consumer decision-making. Since they have a high marketing value, their entry into the online advertising market is supported. Besides, through the introduction of external advertising traffic and the expansion of the platforms' reaching ability, the Internet businesses have cleared the supply-demand channel connecting consumers and businesses and have activated the platforms' marketing capabilities and advertising traffic value. Thus, the advertising revenue of e-commerce and O2O platforms grow rapidly, and attention is paid to the marketing value on the market.  
Analysys believes that attention should be paid to the recent dynamics on China's Internet advertising provider market:

1.  The demand for marketing of brand advertisers is strong, and the e-business digital marketing industry chain has been upgraded.
Since the users' attention has been further paid to the Internet, Internet is no longer merely a sales channel for online brands. Traditional brands have moved more items like commodity trading, marketing, products and services onto the Internet platforms. The marketing value of online advertising has been recognized by brand advertisers. Internet has become an important frontline for marketing and promotion of traditional brands. Besides, to adapt to the advertisers' marketing budget migration, digital marketing services need to be further upgraded, and diversified marketing services for brand promotion need to be provided. JD.com and Tencent deepened the cooperation on advertising traffic resources and big data-based precision marketing to provide advertisers with quality and effective digital marketing services. Besides, Alimama improved the brand marketing service capabilities, and introduced Branding.taobao.com and other brand exclusive marketing products, to provide brand advertisers with differentiated and exclusive marketing services. 

2.  Video media agencies focus on vertical explosive contents and diversified contents to drive advertising revenue growth.

In recent years, video media agencies continued the layout in the video content area. On the one hand, by seizing more content resources, they drove the growth of advertising inventory. In particular, the user coverage of headline contents was favored by advertisers, obviously helpful to the growth of video media advertising revenue. On the other hand, in addition to increased investment in self-made contents, video media agencies sought for directed coverage of different groups of users and fought for user attention with categorized contents. Besides, there was more room for self-made contents in terms of innovation of marketing methods. The use of content marketing was deepened. The businesses' marketing capability and advertising revenue have been significantly improved. A number of vertical explosive contents like Mars Intelligence Agency II, Where Are We Going, Dad? IV and Table π were recently launched on the platform of Youku. There have been more marketing methods, which are not limited to the conventional title sponsor and product placement. With respect to word-of-mouth spread and latter packaging, the marketing has been more interesting, and the interaction between the brands and the users' feeling has increased. 

3.The orientation for products and data has been a trend of digital marketing development, and media marketing efficiency has been improved.

With the growth of online advertising traffic, it is increasingly difficult for the brands to find the target users behind the massive traffic. In particular, in the context of increasingly fragmented user behaviors, advertisers focus on how to make full use of long-tail flow and to improve marketing efficiency. On the one hand, digital marketing service providers need to use automatically intelligent, automated marketing products to connect brands and achieve coverage of the advertising traffic of entire network of users, to reduce artificial operations in the course of media purchase, and to enhance the efficiency of marketing and promotion. On the other hand, the advertising's coverage of the target population and the ROI need to be enhanced based on the combination of the technologies represented by big data and the precision marketing technology. In 2016, leading Internet media agencies strengthened the layout of big data and intelligent marketing products, and improved the capacity to change advertising traffic into cash, when providing advertisers with efficient marketing services. As a leading Internet media agency with a rich advertising inventory, Sohu launched a number of marketing products and solutions, such as MAX, Pinsuan and Diansuan, and provided quality and effective marketing services, when empowering by relying on big data and intelligent delivery of products. 

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