Analysys analysis:
The Quarterly Monitoring Report on Online Advertising Service Operators in China for Q2 2016 published by Analysys Industry Database shows that the market size of online advertising service operators in China for Q2 2016 reached RMB63.46 billion, an increase of 17% compared with the same period of last year, and an increase of 19% compared with last period. Affected by macroeconomy, the marketing budget of advertisers decreased, resulting in the downturn in the year-on-year growth.
In terms of advertising form structure, in Q2 2016, keywords advertising accounted for 34.5%, while video advertising, brand photo advertising and other advertising respectively accounted for 27.1%, 24.9% and 12.8%; and email advertising accounted for 0.7% (basically stable).
The Quarterly Monitoring Report on Online Advertising Service Operators in China for Q2 2016 published by the Analysys Industry Database shows that among the incomes of the market of online advertising service operators for Q2 2016, Baidu, Alibaba and Tencent respectively accounted for 26.9%, 23% and 9.1%, ranking among top 3 in the market.
Analysys analysis shows that the following market dynamics of online advertising service operators should be focused on:
I. Social media deepen the market layout of programmed transactions and the combination of social advertisements and programmed purchase technology embrace a huge market potential.
In Q2 2016, MOMO published the advertisement exchange platform - MOMO Ad Exchange, and established the cooperation with a few demand-side platforms (DSPs) on advertising traffic. According to Qianfan monitoring data of Analysys, the monthly activation top five social platforms in June 2016 were WeChat (684.368 million), QQ (524.952 million), Microblog (165.842 million), QQ Space (58.791 million) and MOMO (35.982 million) successively. Up to Q2 2016, these five social Apps had established their own advertisement exchange platform, namely, Tencent Social Ads Exchange (WeChat, QQ Space, resource access of QQ Space), FANS and MOMO Ad Exchange. According to Analysys analysis, social Apps carry multiple service functions, i.e., information, entertainment and consumption based on the online social network, boasting the abundant advertising traffic and advertising value. Social media build the ad exchange platforms, and reduce their dependence on the third party online service providers, which reflects the strong demand of current market for social advertising traffic to a certain extent. The DSPs are pleased to participate in purchasing and bidding of social ads. Meanwhile, social ad platforms have deepened their lean management on self-owned ads, and strengthened their mastery over the distribution of advertising traffic based on the programmed purchase technology. The advertising premium capacity has been enhanced.
II. The mobile terminal of portal information embraces fast growth, but the advertising revenue is faced with challenges.
Although the advertising revenues from mobile terminals grew fast during the fast mobility of traditional portal enterprises, the overall market share hasn’t been improved remarkably. On the one hand, the shrunk revenues of PC advertisements resulted in the slow growth of overall incomes; however, on the other hand, mobile advertising space was limited due to screen limitation, hindering the further growth of advertising traffic. Although the application of news client explored the advertising resources and optimize user experience in the form of information flow advertising and native advertising, etc., the form of users’ information acquisition are more fragmented inevitably in the Internet era. In addition to APP of news, there is a large number of users for social media, entertainment media and safety APP, and these users attempt or have provided the news service. The competition facing the traditional portal enterprises on mobile terminal is still fierce.
III. Live video emerges as new marketing battlefield, stimulating the continuous attempt and innovation on the way of brand marketing.
The features of users’ fragmented acts on the Internet forced advertisers to make advertisements accessible to target users though more channels. According to Qianfan monitoring data of Analysys, the number of active users to live video reached 27,046,200. The large size of users is endowed with the huge marketing value. Compared with the traditional ways of video marketing, live video is connected with IP and instant online celebrities more closely. However, most of live videos are entertainment-based, and aim to make the brand information content-based and avoid the blunt brand exposure through the interaction between users and anchors, and among users. For the marketing demands of advertisers, live videos are not merely the channel of product sales and brand exposure, but to enhance the communication among brands, products and users in the form of three-dimensional demonstration, and perfect the Internet integrated marketing through mutual coordination with other marketing channels. At present, the marketing mode of live video still stands at the stage of exploration. In future, advertisers and media operators need to further take practice and provide the marketing mode of large-scale reproduction for the market.
III. The Interim Measures for the Administration of Internet Advertising was promulgated, and the development of Internet advertising market was further standardized.
The Interim Measures for the Administration of Internet Advertising (hereinafter referred to as the Measures), which was deliberated and adopted at the Council Meeting of the State Administration for Industry and Commerce, was implemented as of September 1, 2016. Amid the development of Internet advertising technology, the forms of Internet advertising were evolved constantly. As a result, the fraudulent and misleading forms of advertising flooded the market. The Measures further standardize the responsibilities and obligations of Internet advertising operators and Internet advertising service providers in the advertising commercial activities.
In opinion of Analysys, the concept of native advertising has been widely recognized in the market, but the native advertising is defined deficiently. The Measures stipulate that the advertisements should be identified clearly. Hence, the concept of “breaking the boundary between advertisements and contents” is infeasible. With regard to native advertising, the rough understanding of “camouflaging ads into contents” as a native advertising does not conform to the development needs for advertising market. During the exploration on native advertising, the online advertising operators understood the in-depth demands of users upon accepting the information and service, and demonstrated advertisements as valuable information while attaching importance to combining advertisements and user experience, so as to inspire the initiative acts to click and share from the perspective of subjective feelings, and to deliver advertisements in a real and effective manner.
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