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Tim Culpan

The  internet advertising market in China should get a boost from the arrival of United States search-based advertising agency Overture.
The company last week launched in Taiwan and plans to launch in Hong Kong and the mainland in the first quarter of next year.
Its Taiwan launch includes strategic alliances with Yahoo!, MSN and Taiwan sites Seednet, ChinaTimes.com and UDN.com, giving it access to 80 per cent of the island's internet market.
The firm's entry into the mainland is expected to help boost the sleepy online advertising market.
Overture gained prominence last year when it was bought by Yahoo! for US$1.8 billion, a move designed to give Yahoo! access to a niche dominated by search engine Google. 
Overture's business model is to match search queries with client offerings, allowing for more targeted advertising, a model made famous by Google which has no banner ads on its site and which provides topic-based ads to other sites.
'The difference between Taiwan and the US is that Taiwan is less exposed to the [cost per click] concept,' said Rose Tsou,  general manager of Yahoo! Kimo  Taiwan.
To date, the  China online advertising model revolves around banner ads and paid subject links on a site's homepage. The US market has quickly taken to search-based, cost-per-click advertising as an alternative, more cost-effective method.
With the online advertising market maturing, portals have turned to non-ad revenue to boost income.
 Yahoo! Taiwan said non-ad services such as auctions and personals continued to grow as a proportion of total income.
 Five per cent of Yahoo's! overall page views are for search queries. Ms Tsou said the entry of search-based advertising would not cannibalise ad revenue but bring new advertisers to the market, and might even increase advertising's share of revenue.
That is an outcome the mainland's online advertising agency will be looking to garner, with online accounting for just 1 per cent of last year's overall advertising.
 The State Administration for Industry and Commerce estimated online ad revenue on the mainland grew 120 per cent last year to 1.08 billion yuan, from a total ad market of 108 billion yuan.
Overture Taiwan general manager Sean Wu  said: 'Right now, the timing is just right ... since early this year search has been a hot topic.' 
Mr Wu expected search-based ads to account for 30 per cent of online ads in the three to five years.
Overture's entry into  China pre-empts Google's, which has been slow  to move despite providing traditional and simplified Chinese-language sites. Historical figures put the click-through rate of search-based ads at 5 per cent, compared with 0.1 per cent for banner ads.
The increased efficiency of search-based advertising may give the mainland online advertising industry a much-needed spark given the relatively slow outlook for the sector.
Despite its low base, iResearch estimated the mainland's online ad market would grow 67 per cent this year, slower than the global forecast of 91 per cent.



Overture's foray into  Greater China should boost online market