In China, Alibaba Dominates Digital Ad Landscape

Alibaba will continue its hold over the digital ad market in China, according to eMarketer’s latest advertising spending forecast for the country. The homegrown internet company is expected to claim more than a third of all digital ad revenues this year, amounting to more than $20 billion.

In addition, Alibaba’s revenues will outpace TV ad spending for the first time this year. TV spend has slowed in recent years, growing just 0.5%. By comparison, Alibaba’s revenues are expected to increase by a third. In total, Alibaba will reap more than a fifth of all advertising outlays in China this year—while TV will take a 17.5% share.

A perfect storm of more mobile users and a growing number of merchants and technological improvements have helped solidify Alibaba’s dominance in China. While competitors Baidu and Tencent are both expected to grow significantly this year, their combined revenues are less and will account for 19% of all advertising spend in China.

“Alibaba repeatedly uses the word ‘relevant’ when explaining their success with advertising,” said Chris Bendtsen, senior forecasting analyst at eMarketer. “Personalization technology has succeeded in delivering relevant content, search results and ads to mobile users on Taobao and Tmall, and this will only improve in the future. Relevance is the key for Alibaba, advertisers, merchants and consumers to all win.”

“TV will always be an important medium because of the country’s massive audience size. But this is the first year we expect more ad dollars to go to one internet company, Alibaba. And the improving relevance and growing mobile audience are two major reasons for that,” he added.