In 2012, the biggest buzz word in China’s digital marketing is undoubtedly “RTB” (Real-time Bidding). Since Google launched the DoubleClick Ad Exchange Platform in China in early 2012, it has brought drastic changes to the market in adopting real-time media transaction. In a recent research paper, IDC estimated that total RTB spending in China will increase significantly from USD21 million in 2012 to USD627 million in 2016 at a 145% CAGR. iClick Interactive has conducted a study on China’s performance marketing landscape by analyzing the growth of the 4 main digital channels: search, display, video and mobile in recent years, and how each channel is evolving to become more performance-driven to suit marketers’ growing demand on ROI. The study has also shed light on how the China’s digital marketing landscape will evolve in 2013.

1. January, 2013

2. Foreword
Sammy Hsieh, CEO and Co-founder of iClick
In the past decade of my career in digital marketing, I have had the pleasure of
witnessing the exciting changes that have taken place as the industry evolves and
matures. The advent of the internet, a brand new medium, has completely transformed
the landscape of the advertising industry. This has resulted in a multitude of both
opportunities and also challenges for all businesses. In retrospect to the development
of online advertising over the past few years, we can chart three distinct phases of
growth. In the first phase of internet marketing from late 1990s to early 2000, the
competition in internet advertising was not keen; the mere use of attractive visual
images was enough to capture consumers’ attention, and was considered effective
online advertising. The 21st century saw the widespread popularity of the Internet
trigger a staggering growth in the online advertising industry. Today, the Internet is an
integral part of our everyday lives; the fact that we spend more time online
compared to any other forms of traditional media, signals our entry into the third phase of development: the birth of multi-channels of communication,
supported by burgeoning technology, that has resulted in online marketing becoming a crucial tool in any marketing and media plans.
From the early days of eyeball-driven marketing to the technology-driven marketing of today, I believe that search engine marketing represents a key
milestone. Around 2003, all forms of search engine marketing began to take off within China. The introduction of the pay-per-click business model
carved out new arenas for growth in the result-oriented world of Internet marketing; it completely obliterated the traditional mentality and beliefs that
Internet marketing was solely for branding purposes, and demonstrated a much broader range of result-driven applications for advertisers.
Now, the introduction of real-time bidding technology has further urged both display and mobile advertising towards adopting this performance-based
business model. Just as performance-driven marketing has become the main business model in Europe and the United States, I believe we will see the
same trend gradually emerging in China. Although European and American advertising industries suffered a downturn in 2012, local and overseas
researches all indicate that China will become the second largest market for Internet advertising in 2013 as the number of Internet and mobile users
continuous to grow.
To further understand how these events shall evolve, iClick has put together this in depth analysis to forecast the key trends that will be impacting the
industry in the coming year, incorporating both vertical and horizontal analysis of the current status, issues and emerging trends in China’s Internet
industry. We have also examined the likely development in performance marketing from the perspectives of the Internet user, advertiser and
publishers. As a leader in Asia’s performance marketing market, we believe our forward-looking analysis will provide ample of insights to advertisers
-1on Internet advertising, to empower advertisers for better budgeting and realize better returns on their spending.

3. Foreword
We have realized from our recent interactions with our clients that their needs has been constantly
changing. Traditional brand marketing clients used to focus on getting exposure for their brands with
very particular preferences on media image and ad placements. Performance-focused clients, on the
other hand, focuses on profiles and qualities of targeted users rather than placements. This
relatively practical approach has a better-defined objective with specific deliverables including page
view, registration, and transaction as indicators. Today, branded advertisers are giving more attention
to the results from their campaigns. At the same time, clients are increasingly receptive towards new
technologies and new ways to monitor the outcome of ad-spending. More thoughts are going into
strategic media budgeting that can be more directional and offers greater precision in achieving
desired outcome, all the while as DSPs and RTBs becomes a part of their regular lingo.
The change in sentiment is a product of several factors, including the recovery of the capital markets
in China. As the recent attempts of US-IPOs for Chinese companies experienced considerable
setbacks, the “cash-burning” Internet business model has also become a thing of the past. On the
other hand, numerous industries have also been affected by the global economic crises, making
businesses and investors ever more cautious with their spending.
Competition has heated up considerably as the industry grows. Advertisers are readily allocating a
bigger budget for performance marketing, trying to derive greater value from their sales strategies as
they realized that audience targeting is equally effective in promoting their brands. Changes in
advertisers needs has led publishers into introducing performance-based business model to other
formats of Internet advertising, such as display, video and mobile advertising in addition to search
marketing. This report provides a macroeconomic discourse on the present environment of China’s
Internet advertising market, analyzing the outlook and upcoming opportunities in relation to the four
key channels and three driving forces of performance marketing. As a pioneering voice in the
industry, iClick endeavors to enable our advertisers to achieve optimal return from their advertising
spend with our in-depth market knowledge and technology edge.
Ricky Ng
GM of iClick China and Co-founder
-2-

4. Table of Content
• Overview of Online Marketing in China
• The Rise of Performance Marketing
• The 4 key channels:
•
•
•
•
Search
Display
Video
Mobile
• The 3 Driving Forces of Performance Marketing
• Online Users
• Advertisers
• Publishers
• Online Marketing in 2013 and forecasts
-3-

5. Table of Content
• Overview of Online Marketing in China
• The Rise of Performance Marketing
• The 4 key channels:
•
•
•
•
Search
Display
Video
Mobile
• The 3 Driving Forces of Performance Marketing
• Online Users
• Advertisers
• Publishers
• Online Marketing in 2013 and forecasts
-4-

6. Overview of Online Marketing in China
China’s online advertising continues to expand, and is
expected to reach RMB80 billion in 2012
China Online Advertising Market, 2004-2015
YoY Growth
RMB (100 million)
According to iResearch, China’s
online
advertising
market
attained a value of RMB51.29
billion in 2011, with an annual
growth rate of 57. 6%.
Source: iResearch, “2011-2012 Annual Report on China Online Advertising Market”
China’s online advertising market
is expected to maintain a growth
rate of over 50%, reaching
RMB80 billion in 2012.
-5-

7. Overview of Online Marketing in China
Growth rate of China online ad spend surpasses the
global average
Growth Rate of Global Online Ad Spend, by Region and Country 2010-2015
China
US
UK
Middle East
& Africa
Eastern
European
Global
Source:
eMarketer, Online Ad Spending Growth Worldwide, By Region and
Country 2010 - 2015,
According to eMarketer, digital ad
spend growth in China exceeds other
regions and surpasses the average of
growth worldwide (except for Middle
East and Africa which are still at the
early stage of market development).
-6-

8. Overview of Online Marketing in China
Online advertising to overtake TV ad spending in future,
with a gap of less than 3% in 2012
2008-2012 Share of Online Ad Spending in Overall Ad Spend in China
Others
Online ad
Print ad
TV ad
According to iResearch, China digital ad
market accounts for 34% of the total
advertising market in 2012.
Source: iResearch
Digital ad spend has exceeded print ad in
2011. iResearch also predicted that
digital will overtake TV ad spend in a
few years, since the gap between them
will narrow down to only 3% by 2012.
-7-

9. Overview of Online Marketing in China
Factors driving the online advertising market in China
• Ever-growing China’s Internet population: As of the end of June 2012, there are 538
million online users in China*. The Internet penetration rate rose to 39.9%* as people
from different socio-economic backgrounds gained access to the Internet.
• Multi-channel marketing: With the appearance of forum, SNS and social media, people
spend more time socializing and accessing information online. The ability to integrate
these diverse channels, allows advertisers to deliver their messages in the most effective
and engaging ways possible.
• Traditional industries shift to digital marketing: Advertisers are now shifting their
expenditure from traditional channels to digital marketing. For example, the digital ad
spend of the car industry grew by 18.53% month-on-month in February 2012, while digital
ad spend of the dairy product industry rose by 11.88% month-on-month in June 2012**.
This shows that many industries are now recognizing the powerful impact of digital
advertisements.
Resource:
*CNNIC the 30th statistical report on Internet development, July 2012
**Enfodesk
-8-

10. Table of Content
• Overview of Online Marketing in China
• The Rise of Performance Marketing
• The 4 key channels:
•
•
•
•
Search
Display
Video
Mobile
• The 3 Driving Forces of Performance Marketing
• Online Users
• Advertisers
• Publishers
• Online Marketing in 2013 and forecasts
-9-

11. The Rise of Performance Marketing
Performance marketing accounts for 67% of total digital ad income in U.S.
China is expected to follow a similar trend
(%) Percentage of Total Advertising Sales
2005-2012 Shares of Various Advertising Charging Models in U.S.
Charge
according to
performance
Charge
according to
CPM
Hybrid
Source:
US digital market is more
mature. According to iAB’s data
on internet advertising revenue,
performance
marketing
accounts for 67% of total digital
ad spending in US 1H 2012.
In iClick’s view, the digital ad
market in China will follow this
trend.
- 10 -

12. The Rise of Performance Marketing
4 Main channels of performance marketing:
search, display, video and mobile ads
Market Share of Different Ad Channels in 2012 Second Quarter
Others
Video Ad
According to iResearch, search
ads and display ads took more
than 80% of total digital ad
market share, however, mobile
and video ads are on the rise.
Search Ad
Display Ad
Source: iResearch, “2012 Second Quarter Online Advertising Market Report”
To understand the rise of
performance marketing, we
will look at the trend by
analyzing 4 main channels
including search, display, video
and mobile ads.
- 11 -

13. The Rise of Performance Marketing
Pillar of performance marketing:
Search ads thrive despite economic downturn
2010-2012 Quarterly Growth of Search Engine Market in China
RMB (100 million)
Source: Enfodesk, “2012 Third Quarter Report on China Search Engine Market”
The overall market downturn has resulted in the rise of performance marketing. Investors and companies are now more
cautious with advertising spend; decreasing funds and fierce competition are factors that drive the need for solutions that
optimize returns on investment (ROI). Currently, more advertisers’ budgets have shifted from focusing on branding to
achieving quantifiable results.
According to Enfodesk, the revenue of China search engine publishers was RMB8.13 billion in 2012 Q3, the quarter-onquarter growth was 16.1%, and the year-on-year growth was 51.2%. Expenditure on search ads is expected to keep
growing.
- 12 -

14. The Rise of Performance Marketing
From Search Engine to “Audience-targeted Engine”
New
Search
Engine
Marketing
Keyword
Search
Audience
Targeting
Text links on the search result page
With the advancement of technology, search engines now offer a
wider spectrum of search related advertising solution that goes
beyond the traditional text-based precision match approach to
push ROI to a higher level.
For example, Baidu, the leading search engine in China, offered
audience-targeted search engine marketing in September 2012.
Search engine marketing offers media owners and advertisers an
integration of website targeted, search targeted, visit targeted and
interest targeted information, helping them attain detailed and indepth target audience profiles.
Rich media on affiliated websites
- 13 -

15. The Rise of Performance Marketing
New player in performance marketing: Exponential growth in
performance-based display ad spend is expected
2012-2016 Share of RTB Display Ad in China’s Overall
Display Ad Market
RMB (100 million)
Share in total ads
Display advertising used to be viewed as a branding
channel, with less association to performance-driven
marketing. However, Google’s launch of its
DoubleClick Ad Exchange platform in China on April
2012 altered the landscape. DoubleClick's ad
exchange is a display ad marketplace that allows
advertisers to target at specific audiences. From then
on, display ads became a fresh new player in the
world of performance-driven marketing.
Several influential portals have built their own ad
exchange platforms, and IDC estimates that China
RTB display ads will rocket from 1% in 2012 to 11%
by 2016.
Source:
IDC, “Real-time Bidding in the United States and Worldwide,
2011-2016”
In sum, driven by RTB technology, display ads will
become more and more performance-based.
- 14 -

16. The Rise of Performance Marketing
Video ads join the new wave of performance marketing
2006-2014 The Scale and Penetration Rate of Online Video Ad Market in China
Penetration Rate
Online Users (100 million)
In addition to search and display ad
channels fueling the development of
digital advertising, exciting new
digital advertising channels such as
video and mobile ads have emerged
to join the wave of performancedriven marketing as well.
The number of online video users in
China reached 380 million, with a
penetration rate of 90% in 2011.
According to CNNIC’s data, people
spend more time online
watching videos than on any other
form of online activity.
Source: iResearch, “2011-2012 Annual Report on Online Video Industry in China”
This startling growth in the number of
users and penetration rate is largely
due to the rich content, high-quality
images and high-speed broadband.
- 15 -

17. The Rise of Performance Marketing
Video ads join the new wave of performance marketing
Market Size of Online Video Ad in China Between 2009 and 2014
RMB (100 million)
Source: iResearch, “2011-2012 Annual Report on Online Video Industry in China”
Video advertising used to be perceived as the
twin of TV advertising, and was favored by
traditional branding advertisers. Yet as seen
from its development in the United States,
video advertising has gradually evolved and
progressed along the path of performance
marketing. Data from Tube Mogul indicates that
in the 2nd half of 2012, pre-rolled video ad
resources available for purchase via RTB in U.S.
are growing at an average monthly rate of 14%.
In the whole year, such web video advertising
resources via RTB purchase will account for 15%
of the total spending on web video ads; by
2013, this figure will be 22%. Therefore it can be
predicted that China’s web video advertising will
probably develop towards accuracy and
efficiency.
At present, video ads purchased via RTB in
China are still in its early stages. Tencent, a
video giant in the industry, stated recently that
in future, video ads will be available through
RTB purchase on the Tencent advertising realtime exchange platform.
- 16 -

18. The Rise of Performance Marketing
Mobile users in China estimated to reach RMB24. 5 billion,
increased opportunities for performance-based mobile ads
2006 to 2015 Scale of China Mobile Marketing
2006-2015 Mobile Marketing Scale in China
RMB (100 million)
RMB (100 Million)
In the past several years, China’s mobile
Internet has been developing very rapidly and,
by the end of December 2011, the number of
China’s mobile users reached 356 million, i.e. a
year-on-year growth of 17.5%, while the
number of smartphone users reached 190
million, with a penetration rate of up to 53.4%.
The growth of users in mobile Internet has
attracted the attention of advertisers. In 2011,
revenue in mobile ad marketing reached
RMB2.42 billion, and is expected to hit
RMB6.32 billion in 2012. This growth of mobile
ads is mainly due to improved recognition of
mobile media by advertisers in recent years;
the popularity of smartphones and the
development of different applications also
plays a major role. Advertisers also wish to
utilize mobile ads as part of an all-rounded
communication plan.
Source: iResearch, “2011-2012 Annual Report on Mobile Marketing in China”
Source: iResearch “2011-2012 Annual Report on China Mobile Marketing”
- 17 -

19. The Rise of Performance Marketing
Mobile ads scale in China estimated to reach RMB24. 5 billion,
increased opportunities for performance-based mobile ads
However, whether or not mobile ads will emerge as
a new favorite in the advertising field will ultimately
depend on its performance in promotion. In terms
of performance optimization, mobile ads made
progress in the following areas in 2012:
Advertisers' Demand for RTB Mobile Ad
Bidding Rate of Each Impression
RTB win rate
Consolidation of advertisement placements: In
2012, a number of mobile ad exchange platforms
have sprung up, including domob, Adwo, Vpon ,
YouMi, etc. Furthermore, industrial giants such as
Baidu, Tencent, Renren, or even some overseas
players such as admob and inmobi, have entered
the market one after another, which has greatly
increased media resources for mobile ads.
Jan
Feb
Mar
Apr
May
Jun
Note: RTB win rate refers to the successful rate of bidding requests through RTB; while the bidding
rate of each impression refers to the average bidding request for an exposure.
According to U.S. data, though seasonal factors may result in data fluctuations, in general advertisers
in the first half of 2012 have an increasing demand for RTB ads, which is reflected by the increasing
bidding request and win rate.
Source:
Mobile RTB improves ROI: Mobile applications
have short life cycles, unstable impressions,
resulting in a high chance of repeated exposures to
the same group of audience, which can be wasteful.
Therefore, like Europe and the United States, a
trend has begun to emerge in China's mobile
marketing – the use of RTB to improve accuracy of
mobile ads. As seen by the current situation in the
United States, advertisers’ demand for mobile RTB
resources is increasing, which demonstrates that
advertisers have very high requirements for both
accuracy and efficiency when it comes to mobile
marketing planning.
- 18 -

20. Summary
To meet the surging demand from
advertisers on marketing performance,
China's major online channels, whilst
continuing to develop rapidly, are also
undertaking a rapid transformation
towards maximizing return on advertising
spend.
- 19 -

21. Table of Content
• Overview of Online Marketing in China
• The Rise of Performance Marketing
• The 4 key channels:
•
•
•
•
Search
Display
Video
Mobile
• The 3 Driving Forces of Performance Marketing
• Online Users
• Advertisers
• Publishers
• Online Marketing in 2013 and forecasts
- 20 -

22. The 3 Driving Forces of Performance Marketing
The influence of online users, advertisers and publishers
on performance marketing
The use of digital advertising to
achieve marketing performance will
no doubt become a core strategy for
marketers in the future. Looking back
at the past several years, the rapid
development
of
performance
marketing is motivated by 3 major
forces: online users, advertisers and
publishers.
3 Driving Forces in Performance Marketing
Online
Users
Performance
Marketing
Advertisers
Publishers
- 21 -

23. The 3 Driving Forces of Performance Marketing
Online users driving the development of Performance
Marketing
The explosion of new media
channels and the popularity of
mobile devices seen in last 10
years have drastically altered the
behaviors and habits of online
users. Consequently , all these
changes have a direct impact on
advertisers’ choice of media
strategies. The following pages
will talk about what exactly has
been changed.
- 22 -

24. The 3 Driving Forces of Performance Marketing
A higher degree of fragmentation observed in
China online users in the last 10 years
• Dramatic increase in the number of websites:
The number of China’s Internet websites in 2012 exceeded 2.5 million*, along with a total of 8.73 million
domain names. Consequently, Internet users have turned from browsing only several portals to surfing
dozens of and more than a hundred websites everyday.
• Innovative web content and online channels:
In the past, an online user's behavior might be relatively simple, either browsing news or searching for
information; today, the activities of users are very diversified. A user may at one moment be enjoying the
latest contents of a new channel via his mobile phone, and then contact his friends through social network,
share his wonderful daily discoveries with them, and then go shopping for necessities at online stores. Every
day, we witness the appearance of all kinds of new media and applications, changing users’ behavior on the
Internet.
• Popularization of mobile devices:
While daily time spent in mobile apps has now surpassed web consumption. Mobile and PC users needs and
behavior are also different.
*Source: CNNIC, “Internet Development Report, No.30”
- 23 -

25. The 3 Driving Forces of Performance Marketing
Advertisers driving the development of Performance Marketing
Advertisers used to be able to grasp the majority
of their target audiences by simply placing their
ads on major portals. Today, advertisers can no
longer do that as online users are highly
fragmented and scattered among hundreds of
websites. With the emergence of RTB, advertisers
can now deliver their ads to the most appropriate
audiences and at the same time ensure that every
marketing dollar is well spent.
- 24 -

26. The 3 Driving Forces of Performance Marketing
The rise in advertising costs and changes in user behavior change
the strategies of advertisers
Advertising Fee (RMB)
Homepages of major portals
Charged by time of service
RMB100,000-500,000 per day
First channel pages of major
portals
Charged by time of service
RMB80,000-20,000 per day
Homepages of vertical portals
Charged by time of service
RMB80,000-20,000 per day
The price inflation of premium ad
placements is driving advertisers to look
for other cost effective advertising
options: An ad placement on a homepage
or a prominent position on a major portal
are charged on a daily basis or according to
the share of impressions, with average cost
ranging from hundreds of thousands to
more than millions daily, sometimes costing
even more than TV ads. While these
premium ad placements help advertisers
by attracting a large number of eyeballs, in
an uncertain economic environment,
advertisers will start paying more attention
to ROI as well.
The shift from premium to long tail ad placements: As seen above, online users today tend to spend more time scattered
across various sites, leading advertisers to now pay attention to long-tail websites. In the past, the long-tail ad was generally
regarded by advertisers as part of the media mix, playing a supplementary role in the overall marketing strategy. However,
with more advanced targeting technologies, advertisers are now considering long-tail ad placements as an important part of
the media mix. According to iResearch, in 2009, the market scale of China’s long-tail ads reached up to RMB940 million. It is
estimated that from 2010 to 2012, the annual growth rate of the long-tail ad market will exceed 50% .
- 25 -

27. The 3 Driving Forces of Performance Marketing
Publishers driving the development of performance marketing
Now that there are millions of websites on the Internet,
competition amongst websites to secure advertisers'
spending has also intensified. Therefore, many websites
have introduced business models that charge advertisers
according to results attained ( i.e. CPC, CPA, CPS). Such
websites also support RTB to improve marketing results.
This allows them to ensure their website incomes, while
at the same time increasing marketing efficacy for
advertisers, achieving a win-win solution for both parties.
- 26 -

28. The 3 Driving Forces of Performance Marketing
Media charges according to performance:
a win-win situation for media and advertisers
Shares of Different Charging Models of Online Advertising
Market in China From 2008 to 2012
Source: iResearch, “2011-2012 Annual Report on Online Advertising Industry in China”
The emergence of search engine
marketing charged according to
CPC has instantly altered the
existing business model of
charging by CPM in the online
advertising market. As search
engine marketing became more
and
more
recognized
by
advertisers, the CPC charging
model started to grow slowly in
2008, up to about 50% of total ad
revenue in 2011. At the same
time, charging models which have
higher
requirements
for
performance such as CPA (costper-acquisition) and CPS (cost-persales) have appeared. These two
charging models are expected to
account for about 7% of the total
online ad revenue in 2012.
- 27 -

29. The 3 Driving Forces of Performance Marketing
Appearance of Ad Networks and Ad Exchange Platforms:
Enhance the value of the long tail advertising placements
Market Size of China Ad Networks from 2009-2013
RMB (100 Million)
The growing number of websites has led to the emergence of
ad networks and other ad exchange platforms. The purpose of
these platforms is to integrate scattered online placements,
and make them available to different advertisers according to
their promotion purposes and targeted audience segments.
The redistributing of placements to the most appropriate
advertisers helps to improve the value of ad placements as
well as reduce resource wastage.
iResearch forecasted that in 2012, revenue from ad networks
in China would reach a revenue of RMB16.76 billion; with
iResearch's rough estimate of RMB80 billion as the total
advertising revenue, revenue of ad networks will account for
approximately 20%.
Source: iResearch, “2011 Development Report on Ad Networks in China”
From the growth figures of the advertising network, it can be
seen that more and more media owners are willing to put their
unsold placements or long-tail placements for sale on ad
networks or ad exchange platforms. The increase in
placements available also encourages advertisers to promote
on such platforms.
- 28 -

30. The 3 Driving Forces of Performance Marketing
Influential Portals to build their own Ad Exchange platforms
Though facing relatively less competition, in the
past few years, major portals primarily managed
to achieve revenue growth by increasing
advertising fee, especially the premium ad
placements on homepages and popular channel
pages. However, their tier 3 or 4 pages have less
demand from the advertisers.
The vacancy rate of ad placements in these major
portals is estimated to be as high as 50%. With the
emergence of RTB technologies, the market value
of these unsold inventories is expected to jump
because RTB helps to deliver the ad to the right
targeted audience by tracking users’ online
behavior instead of just considering the positions
of the ad placements. These factors will
encourage large portals in China to accelerate
their pace in the construction of their own ad
exchange platforms, thus participating in the
brand new RTB market through pilot operations.
- 29 -

31. Summary
Fragmentation
of online users
Emergence of new
media and
channels
Bring about changes
in habits of browsing
Advertisers
Purchase target
audience directly
- High vacancy rate for major portals
- Long-tail websites seek-integrated platforms to
enhance values of ad placements
- Media wish to sell ad placements through RTB
Demand for competitiveness in the
long run results in the search of more
effective marketing means
The pulling force between media and
advertisers give birth to ad exchange
platform. Thus a win-win situation is
created for both parties in sale and
purchase of advertisements
As demonstrated by the above presentation, the rapid development of performance marketing is mainly
powered by three major forces, each one a vital part of the equation. In future, new kinds of service providers
will emerge, similar to how SSP, DMP, and others developed in the United States, helping all parties achieve a
situation that benefits everyone.
- 30 -

32. Table of Content
• Overview of Online Marketing in China
• The Rise of Performance Marketing
• The 4 key channels:
•
•
•
•
Search
Display
Video
Mobile
• The 3 Driving Forces of Performance Marketing
• Online Users
• Advertisers
• Publishers
• Online Marketing in 2013 and forecasts
- 31 -

33. Online Marketing in 2013 and forecasts
1) Performance-driven marketing is no longer exclusive to search marketing: With
the help of advertising technology, performance-driven marketing extends to
display ads and other online advertising channels
Solid results and lead traffic have always been the key reasons that search marketing has led the race towards performancedriven marketing. This has no longer been the case, since Ad Exchange and RTB technologies were introduced into China in early
2012. RTB significantly enhanced the accuracy of display advertising in terms of achieving comparable results. Since then,
display inventory acquired via RTB has become an important source of accessing performance-driven marketing. In China, the
Taobao Ad Network Exchange (TANX) was introduced at the end of 2011. Google also launched DoubleClick Ad Exchange in April
2012 Tencent, ready to leap on the bandwagon, also leaked their version of a private exchange platform, MINDX, to the public in
August. According to industry reports, SINA is not far behind.
However, the coverage of these three key ad exchanges still does not constitute a significant number of inventory. We therefore
believe that there is still significant room for RTB growth as more inventories will be available through RTB with greater liquidity,
allowing for sustainable growth. We also believe that RTB will lead to exponential growth in mobile advertising. Taking the US
market as a point of reference, there is a three-year gap between display RTB and mobile RTB technologies. However, the
tremendous growth in mobile uptake can possibly swing matters in its favor, allowing mobile RTB to come out on top in the
competition. This is because experience tells us that advertising budgets are dictated by the customers, and the momentum of
usage of mobiles and tablets has long overtaken that of desktop computers. However, mobile technology is also currently limited
by multi-screen transfers, hence the feasibility of achieving desired returns from advertising expenditure will be determined by
whether DSP is able to tap into historical data for optimum results. As such, a popular method in the US is domestic WIFI access
to bridge the mobile PC data gap.
- 32 -

34. Online Marketing in 2013 and forecasts
2. More branded advertisers jump on the performance-driven marketing
bandwagon as it is adopted by more industries
Next to channel development, the ability to change advertisers’ perceptions of performance-driven marketing is also
important. While performance-driven marketing used to be popular only with advertisers from industries such as e-commerce,
travel, banking and finance, data from the past year indicates that more branded clients will begin to actively seek out
performance-driven marketing. We no longer expect to see brand owners pumping cash into advertising, with an extreme
example being “crazy ads” placement splashing across front pages to attract attention. Although this could generate a lot of
“noise” to complement PR strategies, it is a resource-wasteful approach that is neither economical nor sustainable. In order to
effectively enhance brand awareness, a brand owner needs to focus on delivering specific messages to their most valuable
users. This is where RTB can satisfy their needs. RTB can accurately segregate users according to specific qualities or
preferences. In other words, it can allow advertisers an opportunity for one-on-one brand promotion. Targeted brand
promotion means capturing the precise moment to via an appropriate platform to display their products. This can highlight
specific brand qualities and increase the possibility of gaining the trust and recognition of a targeted user. For example, a
young tech-savvy male consumer would appreciate a specific vehicle’s technological innovations, whereas a young female
consumer who is interested in maternity brands would be more drawn to the safety features in the same vehicle. This
approach will more effectively convey the brand messages and build greater trust for the brand, regardless of whether the
consumer is ready to make a purchase decision at the time of exposure. The beauty of RTB is in its ability to locate the smallest
segment amongst users and deliver a message to these people in real-time, gaining users’ recognition through its
relevance. Global FMCG heavyweight P&G recently announced the adjustment of its global strategy to significantly reduce
spending on traditional marketing, and allocate more substantial resources to Internet marketing. P&G China has supposedly
developed a social media game for users to experiment with their products and earn tokens that can redeemed as discounts for
Wyeth products at Watson’s. As the largest advertiser in the world, such a significant move in its marketing strategy can have
significant implications on the industry.
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35. Online Marketing in 2013 and forecasts
3. Data is King: from theory to reality
Large data stories became somewhat of an overnight media darling in 2012. So what will be the large data story for 2013’s
Internet advertising market? As the industry’s technology and infrastructure matures, we expect to see the launch of large data
in application. The industry is now focused on transforming large data concepts into practical actions. To a marketer, this can
be applied in three areas:
Optimized user groups: excavating high-quality users and overcoming the barrier of finding specific target user groups in a sea
of imperfect or inadequate data, making it difficult for advertisers to accurately capture the targeted user group. As real-time
technology is developing at an accelerated speed, it is no longer difficult to create one-stop data solutions. Tracking path data,
to data collection, storage and processing, to hierarchical classification and analysis of multi-dimensional data, to efficient data
mining, even the use of advance technologies for machine learning on valuable derivative data; all of this is now achievable
within a blink of an eye, in real-time.
Channel optimization: this refers to single-channel and multi-channel optimization. More empirical support means channel
optimization with greater precision in single-channel and multi-channel optimization. Previously, channel performance analysis
was limited by data availability, putting a cap on the possibility of better channel performance, hence optimization
opportunities were not adequately exploited. A simple example is research that has indicated the effect of weather on
people’s propensity to shop online. While many may dismiss this finding as unoriginal, the key is how to apply this kind of
information to quantify the correlation between people’s online shopping behavior and weather conditions, creating an
optimization directive based on the theory. Bid data theories can resolve this issue and broaden potential for outcome
optimization.
Advertising content and creative optimization: the “right” content for the “right user” at the “right” time. When both user and
channel are at an optimum level, the key to the outcome of an advertisement will rely upon the contents of an
advertisement. Large data can allow performance-driven marketers to lock down target users and locate the channels where
they will be online with greater ease. However, should the user receive irrelevant product messages, the results of the
advertisement will not be as definitive. The power of large data is in its ability to identify where a particular user is in the
conversion funnel, and decipher relevant advertisements and creative from that point onwards. For example, a new client may
see an advertisement with an offer for a free sample, and a returning client will see a special promotion for the same product. 34 -

36. About iClick

37. About iClick
iClick is the first Buy-side Platform in Asia
established to help marketers manage
cross-marketplace strategy efficiently, and
to maximize ROI through the company’s
proprietary optimization platform – XMO,
which is built on advanced algorithmic and
data technology. iClick has established
itself as the trusted partner of a number of
Fortune 500 companies and top brands
across Asia, designing and managing
successful online marketing strategies.
iClick maintains a strong presence in the
region with offices in Beijing, Shanghai,
Shenzhen, Hong Kong, Taiwan, Singapore
and Korea.
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38. Thank you
Website: i-click.cn
Weibo: weibo.com/iclickasia
Email:
sales@i-click. asia
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