HENZHEN, Mar 30, 2009 (SinoCast Daily company Beat via COMTEX) -- TCEHF | Quote | Chart | News | PowerRating -- Chinese Internet companies, whose revenues are dependent mainly on online advertising, are faced with swelling pressure as investors are lacking in confidence and many advertisers nearly halve their budgets in 2009 and even do not release their adds after the financial crisis, Pony Ma, chairman and CEO of Chinese instant messaging dominator Tencent Holdings Ltd. (SEHK: 0700), said at the recently opened China (Shenzhen) IT Leader Summit.
The Chinese online advertising niche suffers a heavy blow because investors now dare not add investments hastily, pointed out Ma, the Internet mogul in China whose Chinese-language name is Ma Huateng. At the same time, the Chinese online game market grows and it is estimated to rise 30% in 2009.

By June 2008, advertising began its decline and fell to USD 8m for the month. The dramatic decrease came in August when the conflict with Russia brought a 65% drop in advertising from USD 7m to USD 3m. In fact, in August and September, advertising agencies did not receive a single order.

For Outdoor.ge, an outdoor advertiser, the most difficult period was January 2009. By early March, the company reported that only 60% of their 480 advertising boards in Tbilisi were used. Launched in June 2008, the company holds 17,000 square meters of outdoor advertising space nationwide. The price of a square meter ranges from USD 35 to USD 45.

The advertising market is not showing any signs of recovery yet. According to advertising companies, larger industries curtailed their marketing budgets since they expect that the crisis will get worse before it gets better.

Banks and mobile companies mainly continue producing advertising videos and promotional articles; however, development companies have almost pulled all their presence from TV.

Soso Gamulashvili, a senior consultant at GEPRA, a public relations and marketing communications company, believes that Colgate Palmolive, Procter & Gamble, Mars, Wrigley’s, and other transnational companies, are still containing the fall.

In January, the size of China's online advertising market was about CNY 600 million, up 12.1% compared with CNY 540 million in the period of last year, according to iResearch, a Shanghai-based Internet research firm. The number was CNY 490 million in February, up just 3.8% compared with about 470 million in the period of last year, however, the month on month growth dropped largely in the two months.