In terms of sheer numbers of users, 2008 marks the year that China overtakes the US as the largest Internet market in the world.

"By 2012 there will be 373 million Internet users in China, 150 million more than in the US at the same time," says Ben Macklin, eMarketer senior analyst and author of the new report, Online Advertising in China: The Olympic Year. "Despite this fact, the Chinese Internet market is still relatively immature and only in its first phase of growth."

This makes China a large—and growing—opportunity for online advertising."

eMarketer forecasts that online advertising spending in China will grow from RMB7 billion ($924 million) in 2007 to RMB29.26 billion ($4.9 billion) in 2012. In projecting yearly growth rates, eMarketer assumed a strong uptick in 2008 due to the Beijing Olympics and annual growth above 30% to 2012.



"The 2008 Beijing Olympics will be a significant driver of advertising spending growth," says Mr. Macklin, "but positive underlying economic and demographic indicators point to continued advertising spending growth well beyond this year."

The strong online advertising growth "is predicated on continued Internet user and household broadband adoption, increased Internet usage and ongoing economic growth in the country," says Mr. Macklin.

Age is also an important characteristic to consider when appraising online advertising options in China.

According to the China Internet Network Information Center (CNNIC), 69% of Chinese Internet users are ages 30 and younger. Only 39.7% of Internet users in the US are in that age category.



"The majority of Chinese Internet users may not have much disposable income today, but their spending power will increase over the next 10 years," says Mr. Macklin. "Marketers should keep that in mind when developing online marketing plans."