By 2020, more than three-quarters of all online display advertising revenue will come from mobile, according toÂ new analysis by IHS Markit.
Global mobile display advertising surged 72% in 2015 compared to the previous year, and accounted for 45% of all online display advertising revenue, with a total of â‚¬29 billion.
In 2016, worldwide mobile advertising will grow 42%, to $41 billion and for the first time will generate more than half (55%) of all online display advertising revenue, said the latest IHS Markit white paper.
â€śMobile advertising has grown stronger than any other medium in the last four years, and now accounts for a significant proportion of online advertising revenue,â€ť saidÂ Qingzhen Chen, senior analyst at IHS Markit.
With roughly $33 billion in revenue for 2016, the Chinese online advertising market is the second largest in the world. Online grew 17.5% in 2016 and will grow 14% in 2017, driven by a strong growth of online video (51% and 32% growth, respectively).
â€śIn 2016, the Chinese online ad market went through some turbulence and reshuffling,â€ť Chen said. â€śChina 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.â€ť
On the other hand, after a period of rapid growth, TV has entered a third year of consecutive decline with a single-digit contraction. Many people are switching to online for content consumption and seeking wider range of content, from foreign content to user-generated content by popular vloggers. TV in China declined 2.7% in 2016, and IHS Markit expects a 3% drop in 2017.
Baidu, Alibaba and Tencent own 36.5% of the total ad market with a total of RMB160 billion ($24 billion) in 2016. â€śThe trio has absorbed large TV brand budgets and online ad budgets, and continues to expand aggressively into digital,â€ť 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.
â€śAs Chinese companies go global, investments in nearby countries will increase,â€ť Chen said. â€śRegions 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.â€ť