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China to dominate Asia Pacific online advertising market

Anuradha Shukla | April 1, 2013
Will account for 58% of all Asia Pacific online advertisement spending by 2017.

China will dominate the Asia Pacific online advertising market, according to a new report by Forrester that says the nation will account for 58 percent of all Asia Pacific online advertisement spending by 2017.

The Asia Pacific online advertising market is forecasted to grow to US$59.6 billion by 2017.

Forrester has calculated that marketers advertising with online display and search media in India, Australia, South Korea, Japan, and China will grow their investments at a 23 percent compound annual growth rate (CAGR) to about US$60 billion by the year 2017.

Although figures related to online display and search media are encouraging, Asia Pacific marketers still maintain investments in traditional media.

Also, these marketers have limited access to good digital skills, tools, and proven metrics.

Catering to a vast online population

China will increase its online spending because it is facing increased competition to address the demands of its vast online population.

Growth in online spending in other countries such as India, Australia, South Korea and Japan will be at different rates.

All these nations have different population; and varied economic and technology environments, all of which contribute to growth at different rates.

Forrester has identified India as the country that will grow at the fastest CAGR but will still represent the smallest market. Japan will see the slowest growth by 2017.

Despite this growth, advertisers in this region are "cautiously experimental" about online advertising because they hesitate to make huge investments on tech-enabled advertising methods with which they have limited experience.

"Advertising spending continues to grow in most Asia Pacific markets but at a slower rate than expected. The anemic recovery in the US and ongoing eurozone crisis has reduced the pace of growth in China and is creating restraint across the region," said Nick Waters, CEO of Aegis Media Asia Pacific.

Mobile innovation

Growth in the Asia Pacific online advertising market will have global influence as it will reshape the paradigm of online advertising - from fixed PC based to mobile.

Looking forward, Asia Pacific marketers will introduce new mobile marketing formats.

Forrester projects 38 percent of consumers in Asia Pacific markets will own a smartphone by 2017 and this will drive marketers in China and India to invent mobile marketing innovations to stay ahead of competitors. 


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