ChinaNet (CNET) to Refocus on Digital Ad + Analytics Services

September 19, 2014 8:16 AM EDT
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ChinaNet (NASDAQ: CNET) announced that the Company's new growth strategy will focus on offering digital advertising services coupled with a range of consumer analytics expected to add significant value for its small and medium-sized enterprise (SMEs) customers. The Company is also continuing to build on its analytics offerings, which will make it possible to serve much larger digital advertising clients in the People's Republic of China in 2015 and 2016.

According to Mr. Val Kaplin, a China-based marketing executive, "China outspends every other country in the Asia Pacific region on digital advertising, which in 2013 reached US$13.23 billion, or approximately 11% of worldwide ad spending. Banner ads remain the most popular type of ads, and constitute 30.2% of digital display ads. Keyword search ads are next at 28.5%, which is still behind the US share of 47.1%. Baidu and Taoabao are the largest online advertisers in China by revenue, reporting RMB22.25 billion and RMB17.22 billion respectively, and together represent over half the entire market. The largest spenders on online advertising are Chinese insurance giant Pingan, followed by Volkswagen, P&G and Shanghai GM. The four top sectors for online display ads are transportation, online services, real estate and food & drink."

Based on the Company's new cooperative relationship with Baidu, ChinaNet Online is experiencing an improved sell-through on digital advertising products. Should this trend continue, the Company will be in a position to offer digital advertising services to much larger China-based advertisers.

"We are very excited about our new focus on digital advertising and our cooperation with Baidu. We are also in discussions with Taobao of Alibaba to provide "Micro-Sell 360", which is one of our new product solutions geared towards precision marketing for clients," said George Chu, ChinaNet Online's Chief Operating Officer.

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