Friday, June 22, 2007

Kaiser, who maintains the Ogivy Digital Watch blog, points out the interesting discrepancies between the internet users and online ad markets in China and US:
China will outstrip the U.S. in number of Internet users by 2009

...industry estimates put China’s total online ad spend this year at only about $700 million. Meanwhile, PwC’s Global Entertainment and Media Outlook, sees the online ad market in the U.S. growing to $34.5 billion by the year 2011

...then we end up with a U.S.-to-China total Internet ad spend ratio for 2006 (when China’s Internet ad market was about $600mm) of about 35.5 to 1

i am a litttle disappointed that Kaiser didn't go a step further to discuss what create such big discrepancies. the dynamics behind the online ad market is more interesting and, for those who have stakes in china market, understanding the factors that drive the online ad market growth is more important, they are just different from those of which drive the online ad market growth in the US.

one reason why firms are hesitate to advertise online in china is obvious - chinese netizens comprise mostly young people without much dispensable income. the same is true for advertisers, many of them are not used to use the internet and therefore play down internet as a powerful media channel.

i speculate the other important factor concerns with the brand development level of many chinese firms. product ads dominate in china, and people seldom show interest to spend big money to launch product ad online.

with a few web sites catch most of the consumer attention, and many industries lack leading web sites, many firms who want to advertise online actually find it difficult to find the right onlien platforms.

the growth rates and market size estimations are good starting point but they are superficial.

posted @ 2:50 PM