Sohu IT, 4/20/12
Luo Hongbing, CEO of online advertising agency Beijing Emar Online Technology, said during a recent interview that 80% of Emar's revenue comes from e-commerce advertising.
Luo disclosed that Emar's Q1 2012 revenue grew 100% YoY mainly due to increased demand from e-commerce advertisers. Of the revenue from e-commerce advertising, 20% came from large e-commerce companies.
Luo said that e-commerce advertising spend is continuously increasing, while at the same time irrational ad spending by e-commerce firms on less well-performing ad inventory has tapered off as the sector has matured.
Luo said that extracting revenue from traditional offline companies' efforts to enter the e-commerce space will be Emar's primary goal. In order to achieve this, Emar has established a traditional marketing department. Currently, 20% of Emar's online revenue comes from e-commerce advertising from traditional offline companies.
Editor's Note: Emar is among a handful of Chinese online ad agencies which, in a drive towards a domestic listing or acquisition, have reportedly adopted a high-revenue-growth, low-profit strategy. One common practice in such a strategy is to return most or all of the agency rebate received from online media like Baidu to the advertiser, leaving little profit for the agency, since many advertisers are unwilling to pay a service fee (i.e. meaning the agency rebate is often the agency's only form of income).