Search Engine Marketing (SEM, PPC) Budgets in Asia

Posted on November 30, 2008
Filed Under online marketing |

“It is estimated that in Asia alone, more than 450 million internet users conduct 20 billion searches a month.” (Source: digital media).

Wow, that’s a number. Let’s take this statement to try to calculate what this means in terms of search engine marketing budgets in Asia:

1. To start with we need to set a few numbers. As we don’t exactly know we have to assume:

  • Average click-through-rate (CTR): 1.5%
  • Average cost-per-click (CPC): 0.20 USD


2. Amount of Internet users:

I did a small table because I wanted to break the total amount of Internet users in Asia down to single markets. For this I used the statistics of the World Factbook.

As you can see, the amount of Internet users I came up with differs from the amount in the initial statement. So, in order to keep relations, we also have to adjust the amount of total searches.

450 million Internet users = 20 billion searches
525 million Internet users = 23 billion searches

Internet Users
(in millions)		 Percentage of
total searches
China 253.00 48.13%
Taiwan 14.76 2.81%
Hong Kong 3.96 0.75%
Japan 88.11 16.76%
South Korea 35.59 6.77%
Malaysia 15.86 3.02%
Singapore 3.10 0.59%
Thailand 13.41 2.55%
Vietnam 17.87 3.40%
India 80.00 15.22%
525.66


3. Calculation:

  • 23 billion searches x CTR of 1,5% x 0.20 USD CPC x 12 months =
    828 million USD     per year click budget in Asia spent

Is that so? Let’s make a test backwards to put these 828 millions into relation:

  • Baidu alone had a revenue of 227 million USD in 2007 (source: wikipedia), which mainly comes from online advertising. For 2008: expected growth of 20% = 272 Mio. USD
  • Baidu has a market share of appr. 63% in China, i.e. the Chinese market for keyword advertising is 431 million USD (227 million / 63% x 100%).
  • And, as the above table shows, China’s Internet users make up for about 48% of Asian Internet users.
  • So: 431 million USD / 48% x 100% = 898 million USD

Well, that’s not the same but rather close. We assumed a few figures such as

  • CTR and CPC
  • CTR could be actually much higher, due to Baidu’s advertising display strategy
  • Baidu’s revenue would probably not totally come from keyword advertising

Anyway, there are good reasons to say that the market size for keyword advertising in Asia is currently somewhere between 800 and 900 million USD.

4. Finally, we can again break the Asian market size for search engine marketing down to single Asian markets:

Internet Users
(in millions)		 Percentage of
total searches		 searches
(in millions)		 PPC / SEM market
size (in million USD)
China 253.00 48.13% 11,070 398.52
Taiwan 14.76 2.81% 646 23.25
Hong Kong 3.96 0.75% 173 6.24
Japan 88.11 16.76% 3,855 138.79
South Korea 35.59 6.77% 1,557 56.06
Malaysia 15.86 3.02% 694 24.98
Singapore 3.10 0.59% 136 4.88
Thailand 13.41 2.55% 587 21.12
Vietnam 17.87 3.40% 782 28.15
India 80.00 15.22% 3,500 126.01
525.66 100% 23,000 828.00


5. Here is what other resources say:

  • In Q3/2008, market size of keyword advertising increased by 19.3 per cent quarterly to 1.464 billion yuan, accounting for 43.8 per cent of the Internet advertising market. (lexisnexis)
  • Search engine advertising accounted for 27.3 percent of the market in terms of value, up 4.3 percentage points over the previous year, and it was predicted to hit 30 percent this year, the report said. (highbeam)
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