Technology

Online ad revenue projected to surge from Internet usage

By Tuo Yannan (China Daily)
Updated: 2010-09-03 13:47
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BEIJING - Revenue from online advertisements is expected to see an explosive growth in China over the next three years as advertisers clamor for more eyeballs as social network usage peaks, according to a senior executive from Renren.com.

"Our advertisement income exceeded 100 million yuan ($14.62 million) in the third quarter this year," said Donna Li, general manager of strategic Marketing and Media Planning, Oak Pacific Interactive (Group), which runs Renren.com, one of the nation's biggest social networking websites.

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Declining to give a specific figure, she told China Daily that their growth rate had more than doubled year-on-year due to marketing activities.

Li said users of Renren.com have surpassed 150 million and are still increasing.

As of July 15, the number of Chinese social networking sites (SNS) users hit 210 million, up 19.6 percent since the beginning of this year, according to a report by the China Internet Network Information Center.

Since last year, conglomerates such as McDonald's, Mercedes-Benz and PepsiCo have launched a series of marketing campaigns on Chinese SNS for both branding and sales promotions.

Creative and clever messages, embedded in online social games and advertising, is key to attracting users. For example, Renren.com designed an online game last year for American potato chip brand Lay's, in which users can grow their own potatoes and make chips.

According to a survey from US-based research firm Nielsen, 519,540 users played the game and more than 8.4 million people viewed the activity page. Of active players, 65.6 percent bought Lay's chips within two months.

"The turnover of China's SNS industry will see rapid growth in the next few years as more advertisers are willing to spend their money on SNS websites," said Li Zhi, an analyst at research firm Analysys International during an industry forum in July.

She said the revenue of China's SNS market reached over 700 million yuan last year, and "the number is expected to hit 1 billion yuan this year," she added.