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Google is among the top 3 advertising platforms in China, but makes only 1.8% of its revenue there

Our friends over at China Internet Watch posted this article about the distribution of ad spend in China in 2012, based on a research of Enfodesk.

The top 3 online advertising platforms in 2012 are Baidu (no surprise), Alibaba (no surprise), Google (wow…holy moly…that’s surprisingly much). Given the fact that Google pulled out of the market in 2010, position no.3 is a huge achievement (if the numbers are true, well you know…). Scroll to the bottom of this article to read how that market share translates into revenues.

Now, this means that search accounts for 37% of all ad spend in China, B2B for 15%, video ads (Youku and Tudou) for 3%, huge micro-blogging websites like Tencent Weibo and Sina Weibo for a fraction of the 8% that these two websites overall combine(incl. display ads). The rest seems to go into display ads (40 -45%).

china online marketing ad spend

Advertisers, that’s a sign. Although social media in China is generally considered more influential than search (different than in Western countries where search plays a more dominant role), only little ad budget has been flowing into social channels so far.

The importance that social medial has for brand awareness, communications and engagement does not reflect the ad budget that flows into the channel. Well, probably mainly because social media is a people’s channel and to buy people gets more and more difficult. People need to talk to people, not money.

The bottom line is:

Social media is huge and very influential (Sina Weibo has 500m users, Tencent Weibo 507m users) but you cannot buy people to like your product or service. Instead you need to have a great product, great services around that product like customer service, return policy, etc. (Seth Godin has a great article about that topic). Given that, you have the best chances to create a successful campaign around your core.

On the other hand, if your product sucks, you won’t be able to buy fans.


And just on a side note, let’s do some calculation on Google’s ad revenue in China:

Google advertising share in China 2012: 6.3% (according to Enfodesk)
Total online adverting market size in 2012: 79 billion RMB ( =  12.7 billion USD) according to this article
Therefore, Google’s ad revenue in China in 2012: 6.3% of 12.7 billion USD = 800 million USD
Google’s worldwide Adwords revenue in 2012: 43 billion USD according to this info
800m of 43billion USD = 1.8% of its ad revenues are generated in China (wow…holy moly…that’s low)

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