China's online advertisers now prefer video to news sites

The rise in online advertising on video sites comes at a time of growth for the short video industry.
PHOTO: Pexels

The boom in China's short video industry appears to be paying off for platforms, with video sites drawing in more online advertising revenue than news platforms last year.

Video sites were the third highest-grossing platforms in 2019 with 12.5 per cent of the market share, after e-commerce and search engine sites which took up 35.9 per cent and 14.9 per cent respectively, according to the report by Interactive Marketing Laboratory in Zhongguancun.

News sites, which were third place in the previous year's report, fell to the fourth spot with 11.8 per cent of online advertising revenue.

Among the top four categories, search engine sites were the only ones that saw its market share shrink. In 2018, search engine sites accounted for 21 per cent of the market.

The rise in online advertising on video sites comes at a time of growth for the short video industry. Douyin, the Chinese version of global viral video app TikTok, recorded daily active users of over 400 million in January, up from 250 million from a year before.

Its rival Kuaishou, the country's second-largest short video platform, had 200 million daily active users as of May 2019 and has set a target of 300 million by February.

Online advertising revenue of video platforms grew 43 per cent from the previous year, more than the annual growth of 18 per cent across platforms. Total growth for online advertising revenue was lower than the 24 per cent in 2018 due to China's economic slowdown, the report stated.

Food and beverage makers spent the most on online advertising, followed by companies in the personal care and baby care sectors.

Alibaba, ByteDance, Baidu, Tencent and led the pack in terms of securing advertisers. The top 10, which also included Meituan Dianping, Sina, Xiaomi, Qihoo 360 and, accounted for a combined market share of nearly 95 per cent, up 2 percentage points from the previous year, according to the report.

Alibaba is the owner of the South China Morning Post.

This article was first published in the South China Morning Post.