Alibaba to Surpass Baidu in Mobile Ad Revenues:eMarketer

alibabaAlibaba is set to grab the greatest share of mobile internet ad revenues in China for the first time this year, according to eMarketer’s latest forecast of net digital ad revenues in the country to specific companies.

The forecast, which breaks out more companies than ever before, predicts Alibaba will pass Baidu in net revenues from mobile search and display ads this year, when it will take in $4.75 billion from such paid placements.

That will be more than double Alibaba’s net mobile internet ad revenues in 2014, when the company made $2.19 billion from mobile search and display ads. Last year, Baidu took in $2.53 billion, the most of any player in the market. Baidu will increase net mobile ad revenues to $4.53 billion this year, growth of nearly 80%.

Alibaba and Baidu will each take in about one-third of all net mobile internet ad revenues in China this year. In 2016, the gap between the companies will widen, and smaller players will gain some share, with Tencent expected to approach $1 billion in mobile internet revenues next year.

In the wider digital space, Baidu is expected to maintain its lead.

eMarketer anticipates net digital ad revenues—which include revenues for all digital ad formats delivered to any internet-connected device after traffic acquisition costs (TAC) are taken into account—will reach $9.43 billion at Baidu this year, up 37.7% over 2014 revenues. That will represent just over 30% of the Chinese digital ad market. Alibaba’s share of that market will be just shy of 25% this year.

Other players in the digital ad space in China include Tencent, which will take in 5.2% of revenues this year, up from 4.6% in 2014, Sohu, which will grab 3.4% of the pie, and Youku Tudou and SINA, each with less than a 3% share. Tencent has been fastest to grow its digital revenues since 2014, though from a much smaller base.

Overall, digital ad spending in China will grow by 30.0% this year, and mobile internet ad spending will increase by 90.0%. The fastest-growing digital format will be search, expected to rise by nearly 33%.

eMarketer bases all of its forecasts on a multipronged approach that focuses on both worldwide and local trends in the economy, technology and population, along with company-, product-, country- and demographic-specific trends, and trends in specific consumer behaviours. We analyse quantitative and qualitative data from a variety of research firms, government agencies, media outlets and company reports, weighting each piece of information based on methodology and soundness.

In addition, every element of each eMarketer forecast fits within the larger matrix of all its forecasts, with the same assumptions and general framework used to project figures in a wide variety of areas. Regular re-evaluation of each forecast means those assumptions and framework are constantly updated to reflect new market developments and other trends.

Source:eMarketer

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