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China Daily Website

'Tough year ahead' for mobile ad platforms

Updated: 2013-10-18 08:08
By Gao Yuan ( China Daily)

Chinese mobile advertising platforms are set to face cutthroat competition in the coming year, before the market enters an "explosive growth" phase in 2015, according to industry insiders.

Global advertisers will spend at least $2.2 billion in the world's largest smartphone market by that year, which will represent a surge of 70 percent year-on-year, said industry research company eMarketer Inc.

China's mobile ad market is estimated to reach $722 million in this year.

"The growth of the advertising industry usually lags behind hardware adoptions by a bit," said Robert Woolfrey, Southeast Asia managing director of Millennial Media, one of the world's top three mobile ad agencies.

Although the nation's mobile ad market is on track to catch up with world leaders such as Japan and South Korea over the next two years, Woolfrey warned that early movers may fail to make a profit because of increasing competition, low demand and unstable Internet connections.

Japanese and South Korean ad agencies have been handling this kind of business for long enough to have developed many choices for advertisers, but Chinese platforms are not focused enough, said Woolfrey, and smaller platforms will find it hard to survive.

"Companies such as Baidu Inc and Tencent Holdings Ltd are already starting to look at mobile, and look at it in a big way," he said, adding that platforms with heavier traffic are better-placed to succeed.

Most Chinese advertisers are hesitant to put their money into the mobile segment. The diverse user population makes China a difficult market, he said.

Although China's smartphone market has grown rapidly for years, the advertising segment is just picking up speed.

Woolfrey said that there's a fast-emerging opportunity hidden in the vast smartphone population.

As of June, 464 million Chinese were using mobile phones to access the Internet, according to the China Internet Network Information Center.

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