China’s online advertising market reached an estimated RMB1.366 billion ($176 million) in the first quarter of 2007, according to Analysys International data cited in Digitimes.

The firm also revealed that Baidu and Sina were the top two Web portals in China, with market shares of 20.6% and 18.6%, respectively.

Online Advertising Revenues in China, by Segment, Q1 2007 (millions of RMB and % increase/decrease vs. prior quarter)

Online ad spending has increased continuously since 1998, according to a Shanghai iResearch report released in June 2005. Growth rates approaching 50% also indicate that the market has not yet reached maturity.

Online Advertising Revenues* in China, 1998-2006 (millions and % increase vs. prior year)

Advertising is up overall in China. CTR Market Research released data in February 2007 estimating that China’s ad spending grew 18% in 2006. Data from Nielsen Media Research put China’s 2006 ad revenues at $49.9 billion. Nielsen’s data covered newspapers, magazines and television, which it said got the lion’s share of Chinese ad spending, at 81%.

TV ads brought in 56 times the revenue as online display ads from May through September 2006, according to Nielsen//NetRatings AdRelevance.

Advertising Spending for Select Media in China, May-September 2006 (billions of RMB)

As is often the case with China, sheer numbers are driving growth. eMarketer Senior Analyst Ben Macklin estimates that China will have the world’s largest Internet market in the number of Internet users by the end of the decade.

Broadband is on the rise as well. While adoption has slowed from the extraordinary rates of a few years ago, eMarketer conservatively forecasts that there will be 90.5 million broadband households in China by 2011, up from 46.6 million in 2006.

Broadband Households and Penetration in China, by Access Technology, 2005-2011 (millions and % of total households)

Chinese broadband users can now look forward to increased rich media and online video along with their display ads.

Via eMarketer