Market Insights Advertising & Media Advertising

Search Advertising - China

China

Ad spending in the Search Advertising market in China is forecasted to reach €58.50bn in 2024.
The sector is expected to experience an annual growth rate (CAGR 2024-2029) of 8.23%, leading to a projected market size of €86.88bn by 2029.
When compared globally, the United States will contribute the most to ad spending, with €127.10bn in 2024.
Within the Search Advertising market, 78% of total ad spending is estimated to come from mobile sources by 2029.
The average ad spending per internet user in the Search Advertising market in China is projected to be €47.70 in 2024.
China's Search Advertising market is experiencing significant growth due to increased digital consumption and competition among tech giants like Baidu and Alibaba.

Key regions: Australia, Japan, United States, Europe, Asia

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Analyst Opinion

The Search Advertising market in China has experienced significant growth in recent years, driven by customer preferences, market trends, local special circumstances, and underlying macroeconomic factors.

Customer preferences: Chinese consumers are increasingly relying on search engines to find information, products, and services. With a population of over 1. 4 billion people, China has a large and growing online user base. This has led to a greater demand for search advertising, as businesses seek to reach and engage with these consumers. Additionally, Chinese consumers are becoming more tech-savvy and are spending more time online, further fueling the demand for search advertising.

Trends in the market: One of the key trends in the Chinese search advertising market is the dominance of Baidu, China's leading search engine. Baidu holds a significant market share and is the preferred search engine for many Chinese consumers. As a result, businesses are focusing their search advertising efforts on Baidu to maximize their reach and visibility. Another trend in the market is the increasing adoption of mobile search advertising. With the rapid growth of smartphone usage in China, more and more consumers are accessing the internet through their mobile devices. This has created new opportunities for businesses to target consumers through mobile search advertising, as they can reach consumers at any time and in any location.

Local special circumstances: China has unique cultural and regulatory factors that influence the search advertising market. The Chinese government has implemented strict regulations and censorship measures on internet content, which can impact the types of advertisements that are allowed. Additionally, Chinese consumers have different preferences and behaviors compared to consumers in other countries, which necessitates a tailored approach to search advertising in China.

Underlying macroeconomic factors: China's strong economic growth and rising middle class have contributed to the development of the search advertising market. As more Chinese consumers have disposable income, they are increasingly purchasing products and services online. This has created a competitive environment for businesses, leading to increased investment in search advertising to capture the attention and purchasing power of Chinese consumers. In conclusion, the Search Advertising market in China has experienced significant growth due to customer preferences, market trends, local special circumstances, and underlying macroeconomic factors. With the increasing reliance on search engines, the dominance of Baidu, the rise of mobile search advertising, unique cultural and regulatory factors, and China's strong economic growth, the search advertising market in China is expected to continue to expand in the coming years.

Methodology

Data coverage:

Data encompasses enterprises (B2B). Figures are based on search advertising spending and exclude agency commissions, rebates, production costs, and taxes. The market covers search advertising that is displayed on search result pages or next to organic search results.

Modeling approach:

A combined top-down and bottom-up approach determines the market size. Starting with the top-down approach, we calculate global search advertising by aggregating advertising revenues from key players (Alphabet (Google), Microsoft (Bing), Baidu, Amazon, Alibaba, etc.). Followed by the bottom-up approach, we justify global, country, and region results using web traffic and the number of app downloads. Lastly, we distribute the results to each country individually with relevant indicators such as GDP, internet users, and digital consumer spending by country.

Forecasts:

We use a variety of forecasting techniques, depending on the behavior of the market. For instance, the S-curve function is well suited to forecast digital products due to the non-linear growth of technology adoption, whereas exponential trend smoothing (ETS) is more suited for projecting steady growth in traditional advertising markets.

Additional notes:

Data is modeled using current exchange rates. The impacts of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. The market is updated twice per year in case market dynamics change.