Asia's Online Ad Spending Projected to Soar

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Buoyed by search marketing and classifieds, online ad spending in Asia will grow at a 40 percent annual clip over the next five years, new research suggests.

Research firm IDC forecasts Internet advertising in the Asia-Pacific region to rise from $340.3 million in 2002 to $1.62 billion in 2007.

While IDC sees growth in both display advertising and performance-based marketing, it expects a shift from banners and sponsorships to search ads, classified and permission-based e-mail marketing. By 2007, IDC projects so-called pull advertising to account for the majority of Internet ad spending.

The IDC study covered seven Asian markets: Australia, China, Hong Kong, India, South Korea, Singapore and Taiwan. It did not include Japan, the region's largest Internet market.

Asia has been of particular interest for search giants Google and Yahoo. Yahoo hopes to replicate its domestic successes in both brand and search advertising in its international sites. Its Overture Services paid search subsidiary is already locked in a race with Google to gain an edge in the emerging search market in Asia.

Overture opened operations in Korea in April, boasting a 92 percent reach through deals with top Korean portals like Daum and MSN Korea. Google has operations in Korea, where it relies heavily on its local site for distribution of its paid listings.

Both companies also have operations in Australia. In China, Google faces competition from local search players Baidu and

IDC found Asia's consumers open to Internet advertising, as 40 percent of urban Internet users said an online ad influenced a purchasing decision.

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