2018 china’s online advertising market · the keywords in china’s online advertising market...

2018 China’s Online Advertising Market

Report

2 ©Aug. 2018 iResearch Global Group www.iresearchchina.com

Abstract

Source: iResearch Consulting Group

Among core internet companies, the concentration of online advertising revenue has increased. Four

companies, which are Baidu, Alibaba, Tencent and ByteDance accounted for more than 60% of

online advertising revenue. In the core industries, the search industry has accelerated its layout in news

feed advertising. The advertising revenue and user payment of online video enterprises increased in a

balanced way. Because of the content strategy of news and information enterprises, the industry's high-

quality resources are more concentrated and the competition is increasingly fierce.

Affected by policies and the linkage of online and offline scenarios, competition in real estate, new

retail and other industries has intensified. These industries’ demand for online marketing and

expose improved, and their investment in online marketing has increased significantly.

In 2017-2018, the overall advertising market in Chinese maintained vitality. The partnership and

cooperation between the upstream and the downstream have been continuously strengthened, and

the feature of refinement is obvious. The types of advertisers in the emerging internet industries have

increased. The definition of traditional “media” is no longer suitable, and the service chain of marketing

service providers keeps expanding.

Online advertising is still the core business model of the Internet industry. In particular, mobile advertising

has become a key point for growth. In 2017, the revenue of mobile advertising reached 254.96 billion.

The rapid development of native advertising has attracted attention from the industry. It has

expanded its advertising resources, improved ad conversion rate and provided better experience,

bringing value to the innovative development of digital advertising.

The boundaries between online and offline advertising are blurring, and the technology and

resources gradually integrate. The advertisers have strong demand for “brand and effect

integration”. Besides traffic and resources, the media's advertising creativity and performance

optimization capabilities are increasingly valued.

SMS


The Core Elements of China's Online Advertising

Market in 2018

From 2017 to 2018, the various industrial links in China's online advertising market kept improving and maturing, and the

mainstream gradually shifted from brand or effect advertising to “brand and effect integration”. Besides the advertisers’

demand, the driving forces behind such a transition include cooperation of advertising technology, content and channels,

the gradual establishment of new advertisement evaluation standards as well as the connection of diversified data and

products.

Currently, resources, channels, content, technology and data are the five core elements of the online advertising market

in China. Before 2017, the effect of an advertisement would be very good as long as one or two of these five elements

are prominent. However, in 2017-2018, none of these five elements is dispensable. Only the integration of these five

elements can play a greater role. For advertisers and agents, choosing a more appropriate marketing method and

combination by following these five elements and considering their own demand and characteristics is more important

than focusing solely on the head media channels.

Source: iResearch Consulting Group.

Data

Traffic and

service provider

Distribution and

promotion

methods

Story and

creativity Placement and

conversion

Analysis and

iteration

Looking for the suitable

Looking for

the best

The Core Characteristics and Influencing Factors of Online Advertising in China in 2018

• Forbidden City X Douyin:

The First H5 Drama Conference of

Cultural Relics was very popular,

attracting more young people into the

museum through social short videos

• Millionaire Hero Marketing

It was a very popular livestreaming

quiz at the beginning of 2018. The

ads of the brands are placed in the

quiz in various ways, strengthening

users’ impression of the brand

• NIKE x Jump

In combination with the features of its

products, NIKE placed “NIKE REACT”

in Jump

Core

elements

Technology Content

Channel

Resource

4 ©Aug. 2018 iResearch Global Group www.iresearchchina.com ©Aug. 2018 iResearch Global Group www.iresearchchina.com

The Keywords in China’s Online Advertising Market

In 2018, the quality and style of marketing content become important again. Telling a good story is the key for an advertisement to

affect consumers’ decisions. In the pain point survey of advertisers, their demand for telling good stories, brand positioning,

integrated marketing and emotional resonance is particularly prominent, confirming the importance of creativity in marketing

activities.

Based on this concept and demand, there are many creative integrated marketing cases in 2017 and 2018. The key to the success

of these cases is not merely limiting marketing to a single media or form, but to plan and carry out complete marketing activities

through a harmonious story line, combined with a variety of creative forms and content carriers. Innovation is in every part of

marketing in this process, and there is no feeling of inharmonious because of the overall planning.

Source: N=41. The samples are from well-known advertisers, agents and people in

charge of relevant media. Source: iResearch Consulting Group.

Creative Marketing Events 2017-2018

56.1%

46.3%

41.5%

41.5%

39.0%

36.6%

34.1%

34.1%

31.7%

31.7%

如何提升广告投放ROI

如何讲好打动用户的故事

新品牌如何定位

目标用户的内容/兴趣/价值观偏好有何特征

如何定位产品的目标人群

如何进行有效的整合营销

如何提升用户对品牌的分享意愿

如何提升广告的转化效果

如何了解和运用新的用户增长方式（直播答题等）

如何打通数据

Top 10 Marketing Points Advertisers Are Most

Concerned About

Zhihu ——Buzhidao

Clinic Zhihu cooperated with

Sanlitun Taikooli, a trend

landmark of young people in

Beijing, and built a “Zhihu

Creativity Experience Hall” for

young people – Buzhidao

Clinic .

Dedao- Vegetable Market

Economics Dedao published the new book

"Xue Zhaofeng Economics

Lecture Notes" in the Sanyuanli

Market in Beijing, combining

economics and the vegetable

market which is the "first scene"

of economics, resulting in

unique space art. Connecting data

Improving ROI of ads

Positioning of new brand

Characteristics of the content /

interest/value favored by target users

Finding target users of the product

Effective integrated marketing

Improving users’ willingness to

share the brand

Improving conversion rates of ads

Understanding and using new

methods to acquire users (such as

livestreaming quiz).

Telling a story that impresses users


Centered on the

marketing logic of

stimulating the

audience, there are

now more stimulating

interactive methods of

interactive advertising,

which have improved

the conversion rates of

marketing campaigns

via a fun way.

Live +, short video +

rich advertising

content presentation

methods have created

many integrated

marketing cases that

incorporated multiple

elements.

The Keywords in China’s Online Advertising Market From 2017 to 2018, China's online advertising focuses on "people" to an unprecedented level. The development of

advertising changes with the shift of users’ attention: 1) In terms of forms, the forms of advertisements have become

more diverse. Interactive methods and advertisement, etc., are moving toward smart integration. New and interesting

ads bring better experience to users, the application of data and algorithm is more mature, and the placement is more

targeted; 2) In terms of scenarios, the emerging advertisements of IoT represented by OTT, outdoor large screens,

smart speakers, etc., are more deeply integrated into the diverse life scenarios of users; 3) In terms of carrier, the

definition of "media" is constantly being broadened. Mini programs, short video+, etc. have expanded the forms of

advertising carriers. Mobile manufacturers have layout in network services, tools, e-commerce, etc., targeting the

advertising market.


Characteristics of The Integration of Online Advertising Forms, Scenarios And Channels in China 2017-2018

Integration of Methods And Forms Integration of Scenarios Integration of Media Forms

In recent years, online advertising scenarios have

become more diverse. On the one hand, the

intelligent development of traditional carriers leads to

more digital and dynamic display of content, and

more prominent visual impact and personalization.

On the other hand, the emergence of new smart

devices has also expanded the increment market of

advertising. VR/AR, smart watches, smart speakers,

parenting robots, etc. all have bring new forms and

media to advertising.

In 2018, the media forms were further expanded.

The concept of "media" is constantly being

updated. The introduction of mini programs has

changed the using habits of many apps,

meanwhile, this has also increased the media

attribute of mini programs. Short video + has

become an emerging part for many non-media

attribute apps to carry content; At the same time,

mobile phone manufacturers launched content

product matrix based on their own smart systems

to enter the advertising market.


The Keywords in China’s Online Advertising Market

In marketing, artificial intelligence technology is mainly used for accurate placement, anti-cheating, etc. There will be

comprehensive changes in the future. It will be used in all aspects of the marketing process, such as decision-making,

material production, placement, monitoring, etc., and improve the overall operational efficiency of the digital marketing

ecosystem through the influence on each link and feedback.

This trend is first reflected in placement of performance-based ads. From 2017 to 2018, intelligent marketing service

providers and media intelligent marketing platforms have launched oCPC and oCPM systems, assisted companies in

continuously optimizing bid rules and processes in actual placement via artificial intelligence technology, helped

advertisers gradually move from placement based on CPC or CPM to placement based on goals and actual results.

With the refinement of the cost of advertisement placement, advertisers' demand for professional advertising optimizers

has greatly increased, which keeps promoting the upgrades of systems and services.

Source: iResearch Consulting Group.

Pre-placement

Find potential users and achieve

accurate segmentation

Find the best media combination

During placement

Achieve multi-dimensional

combination of "crowd + scene +

media" via big data technology

Post-placement

Performance data of over 10 dimensions

Realize updates in seconds and support

real-time viewing

Optimized Links in The Advertising Process

oCPC/oCPM

System

Target placement

cost

Actual placement

cost

Analyze data through machine learning and other technology to estimate click through rate and exposure more accurately

7 ©Aug. 2018 iResearch Global Group www.iresearchchina.com ©Aug. 2018 iResearch Global Group www.iresearchchina.com

The Status Quo of Advertising Market in China

In 2017, China's overall advertising market maintained steady growth and its revenue reached around 700 billion Yuan.

Judging from the revenue of the five major types of media advertising, online advertising keeps developing rapidly and

occupies the absolute core position of the advertising market. Thanks to the integration and interaction between the

media, the revenue of the five major types of media advertising as a whole still maintained steady growth, with a growth

rate of 15.6% in 2016. The revenue is estimated to exceed 500 billion yuan in 2017.

Source: China's advertising revenue is based on the data released by the State

Administration for Industry and Commerce of China.

Source: The data of traditional media market are calculated based on the data of China

Advertising Association. The data of radio ad and TV ad are from State Administration

of Press, Publication, Radio, Film and Television of China and the “Blue Book of

China’s Radio, Film and Television”. The data of newspaper ad and magazine ad are

from State Administration for Industry & Commerce of China and the “Blue Book of

China’s Media”. The data of online advertising market are based on financial results

published by enterprises, interviews, and iResearch’s projection and statistical model.

The research and the chart are done by iResearch independently.

501.98 560.56

597.34 648.90

689.64

11.7% 6.6% 8.6% 6.3%

2013 2014 2015 2016 2017

Revenue of Advertising Market in China 2013-2017

中国广告经营额（亿元）增长率（%）

111.93 111.62 106.04 100.49 97.58 96.31

13.99 15.99 15.83 14.58 14.54 14.48

110.52 154.60

218.45 288.49

375.01

491.40

42.50 36.00

25.20

20.16

15.93

12.58

7.81 5.00

4.10

3.61 3.25

2.92

2013 2014 2015 2016 2017e 2018e

The Revenue and Forecast of China's Five Major Types of Media Advertising 2013-2018

电视广告收入规模（亿元）广播广告收入规模（亿元）

网络广告收入规模（亿元）报纸广告收入规模（亿元）

杂志广告收入规模（亿元）

Revenue (bn Yuan) % Growth rate

Revenue of TV advertising (bn Yuan)

Revenue of online advertising (bn Yuan)

Revenue of magazine advertising (bn Yuan)

Revenue of broadcast advertising (bn Yuan)

Revenue of newspaper advertising (bn Yuan)


Note: 1. The media revenue is the statistical basis of online advertising market revenue. The revenue of channel agents is not included；2. The statistics include the

advertising revenue of search engine association, and advertising revenue division provided by the search engine association to other media websites.

Source: The data are calculated based on the financial results published by related enterprises and interviews with experts in iResearch statistical forecast model.

Features of Online Advertising: Convergence And

Refinement

According to core data of China’s online advertising in 2017 released by iResearch, the revenue of China's online advertising

market reached 375.01 billion yuan, increasing by 30% YoY. The growth rate is expected to remain above 30% in 2018. In terms of

absolute value, development of China's online advertising still shows vitality. It is estimated that the market revenue will reach

around 800 billion yuan in 2020.

According to iResearch, in China, online advertising market is still an important business model of the Internet industry, and the

online advertising market changes with the changes in the form and pattern of Internet companies. The Internet industry has

experienced a demographic dividend period and a mobile period, and it has entered a period of refined operation in recent years. At

various periods, the online advertising market kept breaking the original ceilings and expanding its forms and boundaries. In the

next 5-10 years, online advertising will follow the Internet industry and it will and enter a new period. In this period, the Internet will

be the connection point, and technology will be the driving force. Multiple channels and resources will be connected for refined

management. Content innovation and optimization capabilities based on data analysis will become the core competitiveness.

110.52 154.60

218.45 288.49

375.01

491.40

627.34

783.69

43.0% 39.9% 41.3% 32.0% 30.0% 31.0% 27.7% 24.9%

2013 2014 2015 2016 2017 2018e 2019e 2020e

Revenue And Forecast of China's Online Advertising Market 2013-2020

网络广告市场规模（亿元）同比增长率（%）

In the next 3 years, the

combination of online advertising

and traditional offline advertising

in China will become closer and

closer, and the Internet

boundary will gradually become

blurred.

In the next 5-10 years, the

development of online

advertising will follow the

Internet industry and it will enter

a new period. In this period, the

Internet will be the connection

point, and technology will be the

driving force. Multiple channels

and resources will be connected

for refined management.

Content innovation and

optimization capabilities based

on data analysis will become the

core competitiveness. Revenue (bn Yuan) % YoY growth rate


Mobile Advertising Occupies The Most Important

Position

Mobile devices have become an indispensable part of people's lives. At the same time, the mobile advertising industry

chain keeps improving, driving the rapid growth of online advertising revenue. In 2017, the revenue of mobile advertising

reached 254.96 billion, accounting for about 70% of the total online advertising revenue. It is expected that this

proportion will reach 84.3% in 2020, and mobile advertising will keep leading the development of online advertising

market in the future.

Note: Mobile marketing is excluded in data rereleased after Q4 2014. Revenue of mobile advertising includes that of display ads (including in-stream video ads, in-app ads, etc.),

search ads, social news feed ads and mobile advertising of other forms, either on mobile phones or on pads. MMS, mobile newspaper and other forms of marketing are not

included in the revenue of mobile advertising. Online advertising and mobile advertising overlap in terms of mobile advertising on web portals, search, video and other media.


110.52 154.60

218.45

288.49

375.01

491.40

627.34

783.69

13.37 37.51

99.78

175.02

254.96

381.44

519.52

661.03

12.1% 24.3% 45.7%

60.7% 68.0% 77.6% 82.8% 84.3%

2013 2014 2015 2016 2017 2018e 2019e 2020e

Revenue And Forecast of Online Advertising Market & Mobile Advertising Market in China 2013-2020

网络广告市场规模（亿元）移动广告市场规模（亿元）移动广告占比（%） Revenue of online advertising

market (bn Yuan)

Revenue of mobile advertising

market (bn Yuan) % Share of mobile advertising


Market Shares of Different Forms of Advertisements

In 2017, the market shares of different online advertising forms in China were still changing. The development of

traditional search advertising is slower than the level of the overall industry, and its market share keeps falling. The

share of e-commerce advertising was 31.8%, which was higher compared with the same period last year. With the

increase in online goods, the revenue e-commerce advertising has shown an increasing trend, and the growth rate is

higher than the overall market. In 2017, its share of 31.8% is the largest among different advertising forms. News feed

advertising is growing rapidly. In addition to social, news, and video, the statistics caliber of news feed advertising in

2017 included news feed advertisements based on short video platforms and tool platforms such as search platforms.

Its market share reached 18.4%, which increased significantly and became the third largest share.

Note: 1. Search advertising includes keyword advertising and alliance advertising. 2.E-commerce advertising includes vertical search advertising and display advertising, such as

Taobao, Qunar and shopping guide websites；3. Classified advertising was calculated since 2014. It only includes the advertising revenue of 58.com, ganji.com and other

classified websites. It doesn’t include the classified ads revenue of vertical websites such as Soufun. 4. The news feed advertising has been calculated separately since 2016. It

mainly includes news feed ads in social networking sites, news sites, video sites, etc. Other advertising forms include navigation bar ad, EDM, etc.


31.2% 33.4% 31.2% 25.4% 22.7% 19.5% 17.0% 14.9%

27.0% 25.9% 26.9% 28.2% 31.8%

31.7% 30.3% 29.2%

21.0% 17.7% 14.7% 13.7% 12.6%

11.4% 10.4%

9.5%

2.2% 3.6% 7.9% 12.5% 18.4% 23.9% 30.0% 35.1%

7.1% 8.0% 8.3% 8.4% 5.6% 5.0% 4.5% 4.1%

1.0% 0.9% 0.7% 0.5% 0.4% 0.4% 0.3% 0.3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017 2018e 2019e 2020e

Market Shares and Forecast of Different Forms of Online Advertising in China 2013-2020

Search ads (including affiliate ads) E-commerce ads Brand image ads

News feed ads In-stream video ads Rich media ads

Classified ads Fixed text link ads Others


The Search Advertising Market

In 2017, the revenue of search advertising market reached 85.23 billion yuan, up by 16.5% YoY. Since the

implementation of online advertising regulations in 2016 and the beginning of structural adjustment of search advertising

market, the number of advertisers and their budget for advertisements both continued to increase again in 2017. The

growth rate of search advertising dropped to its lowest level then rebounded, and has entered a stage of steady growth.

The number of search service users still maintained a certain growth while the usage rate is already high. According to

CNNIC data, as of December 2017, the number of Chinese search users reached 640 million, and the usage rate was

82.8%. The number of users increased by 37.18 million compared with that in the end of 2016, with a growth rate of

6.2%. The number of mobile search users reached 620 million, and the usage rate was 82.9%. The number of mobile

search users increased by 48.87 million compared with that in the end of 2016, with a growth rate of 8.5%.

Note: The revenue of the search advertising market is the sum of the revenue of the keyword advertising and the revenue of the alliance display advertising.


34.52

51.62

68.26 73.17 85.23

95.89 106.53

117.07

49.6% 32.2% 7.2% 16.5% 12.5% 11.1% 9.9%

2013 2014 2015 2016 2017 2018e 2019e 2020e

The Revenue of Search Advertising in Online Advertising Market in China 2013-2020

搜索广告市场规模（亿元）增长率（%） Revenue (bn Yuan) % Growth rate


Brand Image Advertising Market

In 2017, the revenue of the brand image advertising market reached 47.11 billion yuan, a YoY increase of 19.6%. Its

growth rate is lower than that of the overall online advertising market. The revenue of the brand image advertising

market is expected to exceed 74 billion in 2020.

In recent years, with the explosive growth of native advertising such as news feed advertising. The room for the hard

advertising models which mainly include brand image advertising is gradually reducing. Advertisers’ demand for

marketing is more refined and comprehensive. The brand image advertising is the most mature form, and its placement

models are positions are more limited. It has become one of the many marketing methods that advertisers can choose.


23.19 27.44

32.15

39.39

47.11

56.19

65.20

74.28

18.3% 17.2% 22.5% 19.6% 19.3% 16.0% 13.9%

2013 2014 2015 2016 2017 2018e 2019e 2020e

Revenue of Brand Image Advertising in Online Advertising Market in China 2013-2020

品牌图形广告（亿元）增长率（%） Revenue (bn Yuan) % Growth rate


Development of Online Advertising of Different

Types of Websites

In 2017, the share of the e-commerce website advertising was 31.8% and it will remain stable at around 30% in the next

few years. The share of portal and information advertising (excluding non-portal services) was 8.4%. Social advertising

accounted for 10.5%, which was higher than that in 2016. With its development in the information and social areas, the

share of news feed advertising will keep rising or maintain at a high level in the next few years. The share of online video

advertising declined significantly, mainly due to the gradual expansion of its business model to content payment and the

adjustment of its revenue structure.

Note: 1. Search engine advertising include all forms of advertising of search companies. 2. E-commerce ads includes vertical search ads and display ads, such as ads on Taobao,

Qunar and shopping guide platforms; 3. Revenue of classified ads has been calculated since 2014, covering advertising revenue from 58.com, ganji.com and other classified sites,

but revenue from vertical websites like Fang.com is not included; 4.News feed ads has been separately counted since 2016, including news feed-based brand and effect-oriented

advertising revenue on social websites, news & info websites and video websites; meanwhile, the revenue is mainly actual revenue of the media, and the error caused by quarterly

fluctuation of the financial reports are not taken into consideration; 5.Other advertising forms includes navigation ads, e-mail ads and others.


31.2% 34.7% 32.3% 26.9% 26.5% 23.8% 21.7% 20.0%

27.0% 25.9% 26.9%

28.2% 31.8% 31.7%

30.3% 29.2%

10.0% 8.6% 6.9% 6.5%

5.9% 5.1%

4.3% 3.8%

8.9% 9.8% 10.7%

11.3% 9.5% 9.2%

9.2% 9.1%

8.7% 7.1% 7.2% 7.7% 8.4%

8.6% 8.5%

8.2%

4.3% 5.1% 6.7% 8.3% 10.5% 12.5% 13.8%

15.3%

1.8% 3.4% 3.2% 3.4% 3.3% 3.2%

3.0% 2.8%

8.2% 5.3% 6.1% 7.6% 4.1% 5.8% 9.3% 11.6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017 2018e 2019e 2020e

Shares of Different Types of Media in Online Advertising Market in China 2013-2020

Search engine ads E-commerce ads Vertical industry ads Online video ads

Portal and information ads Social ads Classified ads Others


Portal And Information Advertising Market

Note: Portals and information advertising contain the advertising revenue from pure portal services in media platforms such as the five portals and their clients, independent

news and information clients. The revenue from other businesses of the portal, such as video, social, search, etc., is not included.


In 2017, the revenue of the portal and information advertising market was 31.58 billion yuan, increasing by 43.0% YoY.

The growth rate remained at a relatively high level. On mobile devices, the portal and information platform mainly have

three forms, including comprehensive information platforms with professional media information as the core,

professional news media with original news as the main part, and information platforms with aggregated information as

the main part. From 2017 to 2018, these types of platforms have been focusing on content layout. Through the refined

operation of different target users, these platforms show differentiated development characteristics, reflecting different

marketing value.

9.59 11.05 15.70

22.09

31.58

42.47

53.12

64.12

15.3% 42.1% 40.7% 43.0% 34.5% 25.1% 20.7%

2013 2014 2015 2016 2017 2018e 2019e 2020e

Revenue of Portal And Information Advertising in China’s Online Advertising Market 2013-2020

门户及资讯广告规模（亿元）增长率（%） % Growth rate Revenue (bn Yuan)


Note: E-commerce websites include C2C websites and B2C websites, etc.


E-commerce Advertising Market

The growth in the revenue of advertising on e-commerce websites (including APP) is mainly from the following factors:

(1) Because of the new consumption environment, brand competition has intensified, and the emphasis on advertising

marketing has been continuously strengthened; (2) The online and offline scenarios of e-commerce platform are

increasingly integrated, and “overall scenarios marketing” brings new experience and effects; (3) Content e-commerce

and social e-commerce are booming. Internet celebrities and streamers are good at boosting the sales of products,

helping brands to achieve the perfect marketing effect and conversion.

29.83 40.04

58.81

81.36

119.12

155.82

190.18

228.98

34.2% 46.9% 38.3% 46.4% 30.8% 22.1% 20.4%

2013 2014 2015 2016 2017 2018e 2019e 2020e

Revenue of E-commerce Advertising in China’s Online Advertising Market 2013-2020

电商广告规模（亿元）增长率（%） Revenue (bn Yuan) % Growth rate


Note: The statistical caliber of online video websites include video businesses of portals


Online Video Advertising Market

In 2017, the online advertising revenue of online video websites reached 35.63 billion yuan, a year-on-year growth rate

of 9.2%, which is much lower than that in 2016. The main reasons for the decline include the impact of the large

problems of some head companies, and the more balanced development of the business models of the overall online

video industry. Members of video websites are growing rapidly in 2017 and 2018. The increase of consumers’ spending

power brings new growth momentum to the online video industry. The growth rate of advertising will become stable in

the future.

9.80 15.19

23.31

32.62 35.63

45.39

57.42

71.38

54.9% 53.5% 39.9% 9.2%

27.4% 26.5% 24.3%

2013 2014 2015 2016 2017 2018e 2019e 2020e

Revenue of Online Video Advertising in China’s Online Advertising Market 2013-2020

在线视频广告规模（亿元）增长率（%） Revenue (bn Yuan) % Growth rate

17 ©Aug 2018 iResearch Global Group www.iresearchchina.com

Note: Social advertising covers SNS social websites, traditional communities, blogs, etc. as well as the online communities of portals, Sina Weibo, WeChat, etc.

Source: The data are calculated based on the financial results published by related enterprises and interviews with experts in iResearch statistical forecast model, only for reference.

Social Advertising Market

According to latest data from iResearch, in 2017, revenue of social advertising was 39.51 billion Yuan in 2017. It is

expected that in 2020, the revenue will exceed 110 billion Yuan. Social platforms have advantages in presentation of

creative marketing ideas, creation of brand resonance and promotion of interaction and conversion. With the surge of

content marketing and native marketing, social advertising will enjoy great space for future development.

47.0 79.6 146.8

239.6

395.1

613.5

865.79

1198.04

69.2% 84.4% 63.2% 64.9% 55.3% 41.1% 38.4%

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2013 2014 2015 2016 2017 2018e 2019e 2020e

Revenue of Social Advertising on Online Advertising Market in China 2013-2020

社交广告规模（亿元）增长率（%） Revenue (bn Yuan)

4.70 7.96 14.68

23.96 39.51

61.35

86.58

119.80

% Growth rate

18 © Aug 2018 iResearch Global Group www.iresearchchina.com

Development of Search Engine Market in China

搜索引擎企业营收规模达到1124.1亿元

In 2017, revenue of search engine enterprises was 112.41 billion Yuan, a YoY growth of 29.4%. According to iResearch,

the revenue of search engine enterprises hit a new high in 2017 because: 1) Search advertising, the biggest contributor

to the revenue of search enterprises, recovered to the normal level and boosted the growth of the revenue of search

enterprises. 2) News feed advertising, a new business of the search enterprises, grew fast and became a new force

driving the growth of search enterprises. It is projected by iResearch that in the next two to three years, news feed

advertising will continue to drive the growth of revenue of search engine enterprises.

Note: 1. Revenue of Search engine enterprises refers to the total revenue of search engine operators, excluding that of the search engine agencies. 2. From 2013, revenue of 360

Search was included and from 2017, all revenue of 360 was include.

Source: The data are calculated based on the financial results published by related enterprises and interviews with experts in iResearch statistical forecast model, only for

reference.

394.6

599.6

807.6 868.7

1124.1

1357.6

1580.8

1831.7

51.9% 34.7% 7.6%

29.4% 20.8% 16.4% 15.9%

2013 2014 2015 2016 2017 2018e 2019e 2020e

Revenue of Search Engine Enterprises on Online Advertising Market in China 2013-2020

搜索引擎企业收入规模（亿元）增长率（%） % Growth rate Revenue (bn Yuan)

39.46

59.96 80.76

86.87

112.41

135.76

158.08

183.17

19 ©Aug 2018 iResearch Global Group www.iresearchchina.com

38115.8 39311.0 39683.8 40576.8 42047.1 42973.6 43514.2 44489.3 44269.2 45416.0 45161.1 45991.4

27.7% 21.9% 21.9% 22.7% 22.0% 20.7% 21.7% 16.2% 14.3% 13.4% 16.9%

3.1% 0.9% 2.3% 3.6% 2.2% 1.3% 2.2% -0.5% 2.6% -0.6% 1.8%

2017.1 2017.2 2017.3 2017.4 2017.5 2017.6 2017.7 2017.8 2017.9 2017.10 2017.11 2017.12

Monthly Unique Devices of Mobile Search APPs in China Jan.-Dec. 2017

月独立设备数（万台）同比增速（%）环比增速（%）

According to data from mUserTracker, in 2017, monthly unique devices of mobile search APPs grew rapidly in China.

As of December 2017, the monthly unique devices exceeded 450 million, an increase of 20.7% from the beginning of

the year. The growth rate is higher than the 12.5% growth of mobile APPs as a whole in the same period of time.

iResearch believes that with the movement of search behaviors from PC to mobile devices, the search enterprises are

promoting their mobile search APPs through preloading, advertising, user incentives and other approaches. Mobile

search APPs lay solid foundation for search enterprises to provide mobile search services. Centering on mobile search

APPs, the search enterprises rely on Search + news feed services to meet the diversified information demand and to

monetize more efficiently.

Source: mUserTracker. Dec. 2017. The data are based on daily software monitoring of 4 million mobile devices and communication monitoring of over 100 million mobile devices.


Dec. 2017 Jan. 2017 Feb. 2017 Mar. 2017 Apr. 2017 May 2017 Jun. 2017 Jul. 2017 Aug. 2017 Sep. 2017 Oct. 2017 Nov. 2017

% MoM growth % YoY growth Monthly unique devices (mn)

381.16 393.11 396.84

405.77 420.47 429.74 435.14 444.89 442.69 454.16 451.61 459.91

20 © Aug 2018 iResearch Global Group www.iresearchchina.com © Aug 2018 iResearch Global Group www.iresearchchina.com

7.47

12.16

2017.1 2017.12

Monthly Visits of Mobile Search APPs in China Jan. And Dec. 2017

月总使用次数（亿次）

82.58

108.32

2017.1 2017.12

Monthly Effective Viewing Duration of Mobile Search APPs in China Jan. And Dec. 2017

月总有效使用时间（亿分钟）


According to data from mUserTracker, in 2017, user stickiness of mobile search APPs increased greatly in China. As of

December 2017, monthly effective viewing duration and monthly visits of mobile search APPs increased 31.2% and

62.8% from the beginning of the year respectively.

iResearch believes that mobile search APPs are the major carriers the news feed advertising of search enterprises.

While the viewing duration and visits are core indicators to measure the development of news feed advertising. The

growth of both indicators on the clients show that the business is developing well.

Source: The data of PC is from mUserTracker. Home office edition, Dec. 2017. The

data were calculated based on its long-term measurement of 400,000 samples at

homes and in their offices (excluding public internet café).

Source: The data of PC is from mUserTracker. Home office edition, Dec. 2017. The

data were calculated based on its long-term measurement of 400,000 samples at

homes and in their offices (excluding public internet café).

Monthly visits (bn)

Jan. 2017 Jan. 2017 Dec. 2017 Dec. 2017

Monthly effective viewing duration (bn min)


Revenue of Online Video Sector in China

In 2017, revenue of online video sector was 72.59 billion Yuan. Thanks to the expanding user base and improved users

stickiness, the online video sector will create commercial resources of higher value and the revenue is expected to

exceed 100 billion Yuan in 2018.

The online video platforms will get better control over the content and put the top IP content and high-quality self-

produced content at the core of their development strategy. In the future, they will attract more users by providing more

diversified and high-quality content that are more in line with the needs of the users.

Source: The data are calculated based on the financial results published by related enterprises and interviews with experts in iResearch statistical forecast model, only for reference.

9.07 13.59 24.88

40.43

64.15 72.59

103.36

125.82

156.64

49.7% 49.7% 83.1%

62.5% 58.7% 48.0% 42.5% 21.7% 24.5%

2012 2013 2014 2015 2016 2017 2018e 2019e 2020e

Revenue of Online Video Sector in China 2012-2020

The revenue (bn Yuan) % Growth


Revenue Structure of Online Video Sector

In 2017, user payment accounted for 28.3% of the revenue and developed faster than expected. Advertising revenue

accounted for 49.1%, still taking the lead. To change the reliance on a single business model, online video enterprises

are working on user payment content which is expected to account for over 30% of the revenue in 2020 and drive the

revenue growth jointly with the advertising revenue. The revenue of online video sector used to heavily rely on online

advertising and now the revenue structure is much more balanced and diversified.

Source: The data are calculated based on the financial results published by related enterprises and interviews with experts in iResearch statistical forecast model, only for

reference.

73.4% 72.1% 61.0% 57.7%

50.9% 49.1% 43.9% 45.6% 45.6%

11.1% 8.6%

9.3%

3.8%

3.8% 3.0% 2.6% 2.6% 2.5%

4.3% 5.1%

5.6% 12.7%

18.8% 28.3% 29.0%

30.2% 31.1%

12.1% 14.2% 24.1% 25.8% 26.5%

19.6% 24.4% 21.5% 20.8%

0%

20%

40%

60%

80%

100%

2012 2013 2014 2015 2016 2017 2018e 2019e 2020e

Revenue Structure of Online Video Sector in China 2012-2020

广告收入版权分销视频增值服务其他 Advertising revenue Copyright

distribution Video value-added

services Others


Monitoring Data of Online Video Sector in China

On the video platforms, the advertisers are mainly from categories of food & beverage, cosmetic & toiletries and

automobile. Food & beverage still ranked the first place and its share increased to 26.2%.Cosmetic & toiletries increased

slightly to 13.8%. Among advertisers of other categories, share of medical services, communication services, IT products

and financial services increased to some extent.

Note: The data above are based on iResearch’s iAdTracker. The historical data may fluctuate. If there are differences please use iAdTracker system as a reference. iResearch

does not assume any legal responsibility for the release of the above data.

4.1%

5.5%

4.9%

5.5%

6.0%

9.7%

11.6%

13.6%

15.7%

24.8%

4.3%

6.1%

4.8%

7.6%

4.8%

8.3%

8.8%

13.8%

15.2%

26.2%

Financial services

IT products

Communication services

Medical services

Entertainment and leisure

Internet services

Automobile

Cosmetic & toiletries

Others

Food & beverage

Share of Major Advertisers on Online Video Websites by Spending 2016-2017

2017 2016


Future Development Trends of Online Video Sector

It is proved that self-produced content may boost revenue. Even after sharing profit with the producers, the platforms still

make much profit from popular content. However, the platforms are placing strategic importance on self-produced

content and the scarcity of high-quality content leads to bigger say and dominant position of the producers in the

business cooperation, so the profits of the platforms are squeezed. To change the situation, the platforms adopt a

strategy shifting from capital support to content production. Specifically, for self-production movie and TV plays, they are

accumulating upstream IP of online literature, games and cartoons. And for self-produced variety shows, they set up

their own studios and buy foreign copyright to control content design at the source.

It is costly to invite actors and guests and the internet has higher star-making power. Idols are generated in great

number and the pays are increasing fast. At the early stage, the agencies get a high proportion of profit made by the

artists and high earnings. The business logic of the artist agencies is quite different from that of the internet platforms, so

the ideal approach for platforms to extend downstream is to set up subsidiaries jointly with fund providers.

Video platform

IP

resources

Original

content

Production

company

Agency

Upstream And Downstream Extension of Short Video Platforms



Development Trends of News & Information Sector

As the market is maturing, in addition to user accumulation, content reserves and brand building, the integrated

information platforms and vertical information platforms have found different development paths. 1) for integrated

information platforms, advertising is a major source of income, so they mainly focus on attracting the attention of the

users. With a huge user base, integrated information platforms are exploring interactions in the forms of rich media

content (short videos, live streaming videos), Q&A communities, weak-tie dynamic sharing communities, etc., to

constantly improve content layout, enhance interactions and prolong the time that users use the platforms. 2) For vertical

information platforms, the use base is limited, so they pay more attention to exploit the value of each user. At present,

leaders in the major categories of information platforms such as technology, finance and economics, etc., are exploring

user payment, mainly in two ways, payment for selected information and payment for knowledge (e.g. special columns).

With many years of experience in content production and insights into the vertical industries, vertical information

platforms accelerated the fast growth of user payment and in the future, their revenue will be diversified.


Vertical information platform

Integrated information platform

Short video/ live

streaming video

Q&A

Community

…

Payment for selected information

Payment for knowledge and services

…

Development Features of Information Platforms in China 2017


Automobile Display Advertising

In 2017, spending of automobile advertisers was 10.52 billion Yuan, a YoY growth of 5.3%. The growth rate of automobile

display advertising has been slowing down since 2014 and reach the lowest point in 2017. In the trend of integration of

brand and performance-based advertising, as a major type of brand advertisers, automobile advertisers are also trying

performance-based advertising and exploring more effective overall solutions. However, affected by the intensifying

competition between automobile brands, automobile advertisers will still have high demand for online advertising.

In terms of TOP10 automobile advertisers by spending, FAW-Volkswagen, SAIC-GM and SAIC-Volkswagen are neck

and neck and each has a spending over 700 million Yuan, higher than that in the previous year. Among them, FAW-

Volkswagen rose from the second place to the first place. And SAIC-GM, ranking the second place, saw the biggest

increase from 640 million Yuan in 2016 to 784 million in 2017.

Note: The data above are based on iResearch’s iAdTracker. The historical data may

fluctuate. If there are differences please use iAdTracker system as a reference.

iResearch does not assume any legal responsibility for the release of the above data.

Source: AdTracker. December 2017. The data is based on the daily monitoring of

brand image ads on over 200 mainstream online media in China. Text ads and some

targeting ads are not included. The cost is estimated.







3.33 4.21

5.41 6.05

8.17 9.35

9.99 10.52

26.5% 28.5% 11.8% 35.1% 14.4% 6.9% 5.3%

0

2

4

6

8

10

12

14

16

18

2010 2011 2012 2013 2014 2015 2016 2017

Spending of Automobile Advertisers in China 2010-2017

Advertising spending (bn Yuan) % Growth rate

229

290

297

298

526

540

554

747

784

797

023578101213151718202223252728303233353738404244454749505254555759606264656769707274757779808284858789909294959799100102104105107109110112114115117119121122124126127129131132134136137139141142144146147149151152154156157159161162164166167169171172174176177179181182184186187189191192194196197199201203204206208209211213214216218219221223224226228229231233234236238239241243244246248249251253254256258259261263264266268269271273274276278280281283285286288290291293295296298300301303305306308310311313315316318320321323325326328330331333335336338340341343345346348350351353355356358360362363365367368370372373375377378380382383385387388390392393395397398400402403405407408410412413415417418420422423425427428430432433435437439440442444445447449450452454455457459460462464465467469470472474475477479480482484485487489490492494495497499500502504505507509510512514515517519521522524526527529531532534536537539541542544546547549551552554556557559561562564566567569571572574576577579581582584586587589591592594596598599601603604606608609611613614616618619621623624626628629631633634636638639641643644646648649651653654656658659661663664666668669671673675676678680681683685686688690691693695696698700701703705706708710711713715716718720721723725726728730731733735736738740741743745746748750751753755757758760762763765767768770772773775777778780782783785787788790792793795797798800802803805807808810812813815817818820822823825827828830832834835837

Mercedes-Benz China

Changan

BMW

Ford

Changan Ford

FAW Toyota

Dongfeng Nissan

SAIC-Volkswagen

SAIC-GM

FAW-Volkswagen

Top 10 Automobile Advertisers by Spending in China 2017

Annual spending (mn Yuan)


Financial Services Display Advertising

In 2017, the revenue of financial services advertising was 3.25 billion Yuan, a significant increase of 51.9% YoY. With

enhanced supervision of the internet finance sector and standardized development of the finance industry, the financial

enterprises are focusing on winning the trust and recognition of more users via online marketing and promotion.

Of the TOP10 advertisers by advertising spending, 9F Group has become the biggest advertiser and its spending

increased from 160 million Yuan in 2016 to 179 million Yuan in 2017. And bank advertisers still had high spending on

advertising. Top banks led by Ping An Bank, China Merchants Bank and Industrial and Commercial Bank of China had a

spending of 154 million Yuan, 120 million Yuan and 118 million Yuan respectively. On the whole, spending of bank

advertisers on advertising was much higher than that in the previous in year.













59

65

80

80

102

109

118

120

154

179

0.0 100.0 200.0

Agricultural Bank of China,

Up Financial

QianKun Securities

Industrial Bank

Bank of Shanghai

Bank of Communications

Industrial and Commercial Bank of China

China Merchants Bank

Ping An Bank

9F Group

Top10 Financial Services Advertisers by Spending in China in 2017

Annual spending (Mn Yuan)

0.79 1.19

1.74 1.6 1.87

2.92

2.14

3.25

50.5% 46.2% -7.9% 17.3%

55.9% -26.8%

51.9%

0

1

2

3

4

5

6

2010 2011 2012 2013 2014 2015 2016 2017

Spending of Financial Services Advertisers in China 2010-2017



FMCG Display Advertising

In 2017, spending of FMCG advertisers on online display advertising was 12.57 billion Yuan and the growth rate slowed

down to 4.3% YoY. However, the overall spending was still very high. As brand advertising was increasingly performance-

based in 2017, FMCG advertisers started to pay attention to performance-based advertising and prioritize their

advertising budget for services integrating brand and performance-based advertising the same time.

Note: The data above are based on iResearch’s iAdTracker. The historical data may fluctuate. If there are differences please use iAdTracker system as a reference. iResearch

does not assume any legal responsibility for the release of the above data.

Source: AdTracker. December 2017. The data is based on the daily monitoring of brand image ads on over 200 mainstream online media in China. Text ads and some targeting

ads are not included. The cost is estimated.

1.67 2.50

4.07

5.95

7.60

9.88

12.05 12.57

49.3% 62.7%

46.3% 27.6% 30.1% 21.9%

4.3%

0

20

2010 2011 2012 2013 2014 2015 2016 2017

Spending on FMCG Advertisers on Online Advertising in China 2010-2017


29

Table of Contents of The Full Report

Report Abstract And Core Data

I. Keywords of Online Advertising: Creativity, Integration, Optimization

1. External Influence on China's Online Advertising Market in 2018

2. The Core Elements of China's Online Advertising Market in 2018

3. Keywords of China's Online Advertising Market in 2018

II. Potential Still Exists: Growth of Scale Continues to Lengthen the Life Cycle

1. Analysis of The Status Quo of China's Advertising Market

2. Characteristics of Online Advertising: Integration And Refinement

3. The Development of Mobile Advertising: Fragmented Content + Creative Forms

4. Mobile Advertising Occupies The Most Important Position

5. Native Advertising Will Be The Mainstream of Online Advertising in The Future

III. Barbaric Growth: New Forms of Advertising Bring New Space

1. Market Shares of Different Forms of Advertising

2. Search Advertising Market

3. Brand Image Advertising Market

4. News Feed Advertising Market

IV. The New Analysis of “Media”: Innovation in Content Carriers

1. Overview of the Development of Online Advertising in Different Types of Media

2. Shares of Different Media in Mobile Advertising Market

3. Search Engine Advertising market

4. Portal and Information Advertising market

5. Vertical Industry Media Advertising market

6. E-commerce Advertising market

7. Online Video Advertising market

8. Social Network Advertising market

30

V. Analysis of the Revenue From Online Advertising of The Core Industries And Enterprises

in China

1. Development of Core Enterprises in The Online Advertising Market in 2017

2. Current Status of Search Engine Industry in China

3. Current Status of Online Video Industry in China

4. Current Status of News And Information Industry in China

VI. Placement of Online Display Adverting by Industry in China

1. Spending on Display Adverting by Industry

2. Spending of Automobile Advertisers on Display Advertising

3. Spending of Real Estate Advertisers on Display Adverting

4. Spending of Financial Service Advertisers on Display Adverting

5. Spending of IT Product Advertisers on Display Adverting

6. Spending of FMCG Advertisers on Display Adverting

VII. Appendix

Keywords, Concepts And Definition

Appendix: TOP50 Online Video Content in China 2017

Table of Contents of The Full Report

31

Company Introduction / Legal Notice

About iResearch

iResearch is a provider of insights into China’s internet space and global fastest-growing sectors as well as value-added corporate

services. It offers a wide range of services including big data insights and forecasts, industry research and corporate consulting,

investment and post-investment services.

Founded in 2002, iResearch is the first third-party firm focusing on research in China’s internet sector. Since its inception, it has

published thousands of industry reports and provided custom research and consulting services to thousands of clients. It is now the

preferred third-party research brand for the IPO of Chinese internet companies. iResearch set up its global research center in 2015,

expanding the scope of research to fast-growing sectors world-wide.

Copyright Notice

The report is produced by iResearch Co., Ltd. All texts, figures and tables in this report are under the copyright protection of relative

laws and regulations on intellectual property rights in the Peoples’ Republic of China. No organization or individual is allowed to use

the information in this report for any business purpose without the written consent from iResearch. Some texts and data in this

report are collected from public information and their copyrights are held by the original authors. No organization or individual is

allowed to use the information in this report for any business purpose without written consent from original authors and iResearch.

Exception Clause

Industry data and market forecasts are mainly obtained through desk research, industry interviews, market survey, and other

research methods in accordance with iResearch’s statistical forecast model. Corporate data are mainly obtained through interviews

and are for reference only. Some data published in this report is based on sampling method and is therefore influenced by sample

structure. Due to the limitation of research method, sample size and scope of data collection, the report only serves as a reference

for customers who purchase the report. iResearch is not held liable for the data and views in the report.

Contact Us

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