A Commpro News Update

According to Analysis released by IHS Markit, by the year of 2020, more than three-quarters of all online display advertising revenue will come from mobile

“Mobile advertising has grown stronger than any other medium in the last four years, and now accounts for a significant proportion of online advertising revenue,” said Qingzhen Chen, senior analyst at IHS Markit.

In 2015, global mobile display advertising saw a 72% surge, and accounted for 45 percent of all online display advertising revenue.

In 2016, it is estimated that worldwide mobile advertising grew 42 percent, to $41 billion and for the first time will generate more than half—55 percent—of all online display advertising revenue.

“In 2016, the Chinese online ad market went through some turbulence and reshuffling,” Chen said. “China introduced its first set of online advertising regulations, which in the short term had reduced online advertising revenue, but in the long term, we expect to see a more sustainable online ad ecosystem from this development.”

After a period of rapid growth, TV has seen three years with consecutive declines. People are switching to online for content consumption and seeking wider range of content, from foreign content to user-generated content by popular vloggers. In China, TV declined 2.7 percent in 2016, and IHS Markit expects a 3 percent drop in 2017.

Baidu, Alibaba and Tencent -- known collectively as the B.A.T. in China --own 36.5 percent of the total ad market with a total of CNY 160 billion ($24 billion) in 2016. “The trio has absorbed large TV brand budgets and online ad budgets, and continues to expand aggressively into digital,” Chen said.

The trio made a total of 262 investments, 27 acquisitions and one joint venture between 2009 and 2016. Mobile app companies received most investments from the trio for that period.

“As Chinese companies go global, investments in nearby countries will increase,” Chen said. “Regions like Southeast Asia are benefiting from the rise of a middle class, consumerism, and a mobile-first young population. The emerging Asian markets present a huge business opportunity for the trio to export its video content, games and e-commerce abroad.”