Market Size: China Search Engine Revenue grew by 40.1% year on year in 2013. The market size of 2017 will surpass 90 billion yuan by forecast.
The China search engine revenue in 2013 reached 39.32 billion yuan, with a 40.1% year-on-year growth. Compared with last year, the growth slipped a little bit but remained above 40%. In the near future, China search engine market will witness a steady growth and to reach 96.33 billion yuan in 2017.
According to iResearch analysis, search engine market already entered to its maturity after years of development. And the growth will slow down little by little with the enlargement of the market size. The growing amount of active customers and the Average Revenue Per User provided solid foundation for the market. In addition to these, the commercialization of the mobile search engines and the growing revenue of 360 search engine gave impetus to this market as well.
Market Structure: key words advertising and contextual advertising brought the primary revenue. Search engine companies endeavored to foster new growth points.
According to the search engine market total revenue, keywords advertising revenue took up 74.1%, with a 2% slowdown comparing to 76.2% of last year. Contextual advertising and Navigation advertising revenue accounted for 13.7% and 4.5%, with a 1% slowdown both.
Other advertising revenue took up 7.5%, which was double of last year. Non-advertising revenue shared 0.3%. Among them, search engine revenue which included key words advertising and contextual advertising, took up 87.8% of the whole search engine market revenue.
iResearch pointed out that key words advertising and contextual advertising, being the core business and primary revenue of search engine companies, would gain stable growth in the future. In the meantime, to seek a higher rate of revenue growth, search engine companies were exploring new sources of growth.
The main source of huge increase in the other advertising revenue came from Baidu’s acquisitions of IQIYI and PPS, as well as the good performance of TV program Papa, Where to Go. Non-advertising revenue in the future would include game operation of search engine companies and the possibly-paid service of Baidu which will give a push to the market size enlargement.
Advertising Revenue: In 2013, China search engine advertising market reached 34.52 billion yuan.
In 2013, China search engine advertising revenue reached 34.52 billion yuan with a 34.9% year-on-year growth. The estimated 2014 search engine advertising market would sustain more than 30% growth and gain revenue of 84.3 billion yuan.
According to the analysis of iResearch, search engine advertising, as mature advertising models, can provide more exposure and better return on investment which were favored by advisers.
Future Prospect: Owing to the higher market concentration, mobile search engine would be the important growing point of this market.
Higher market concentration: In 2013, Tencent implemented capital injection to Sougou, followed by the Soso’s exit of the search engine market. According to iResearch analysis, search engine market would gain higher market concentration with Baidu, 360 search and Sogou to be main players. It would be difficult for the new players to enter this market and easy for the old players such as Google to be marginalized.
Mobile Search Engine to Be the Important Growing Point: Mobile search engine forged ahead at a fast speed. The growing number of users and advertisers, together with the growing amount of internet flows, internet flow value and advertising charge, promoted the revenue of mobile search engine.
Indicated by iResearch report, search traffic will continue to grow with the increasing number of mobile netizens and the development of netizens’ searching habit. At the same time, advertisers would gain better understanding of search engine advertising. Under the joint push of these two factors, mobile search engine advertising will developed rapidly and to an important growing point for search engine companies.