China online advertising market experienced a smooth increase in 2006, and advertising service has now been an important revenue source to most internet enterprises. It is predicted that this year, market size of online advertising will reach RMB 4.08 billion Yuan (exclusive of channel and search ads revenues). The top 5 portal websites took up over 60 percent of total Chinese online advertising market which indicates high market centralization.

 

2006 financial reports of Chinese top 5 portals show that most portals’ advertising business grew up healthily. Three websites’ advertising revenue grew up with bidigitate figure compared to q2 2006, while Tencent made a leap of 131.9 percent compared to q3 2005.

 

 

Analyst of CCW Research identifies core dynamic for the increase of advertising business. The first one is the promotion of blog and various broadband services, which maintains a large population of loyal netizens to website and meanwhile increase the site value for advertising. Secondly, the unit price of Chinese online advertising was underestimated for a long time, but now it is recognized by more and more people, which boost its continuous rising of market.