The report found that companies are increasingly beginning to view the Internet as a viable means to reach new audiences and advertise more effectively.
"As it stands now, companies in Asia are taking a 'wait and see' approach to advertising online," said Matthew McGarvey, Internet analyst for IDC Asia Pacific. "However, as the Internet becomes more pervasive, companies are recognising the tremendous amount of potential that advertising online offers."
The report found that online advertising in Asia/Pacific (excluding Japan) accounted for less than 0.5 percent of total advertising revenue in the region during 1999.
IDC forecasts Asian online advertising to generate US$1.15 billion in revenue in 2004, and grow at a 76 percent compound annual growth rate (CAGR) from US$67 million in 1999.
"Advertising agencies, ad networks, and portals will need to focus on educating the general public on the effectiveness of online advertising, and the possibilities that it offers," McGarvey said.
Much of the growth in online advertising in Asia Pacific will occur between 2002 and 2004.
"Currently, IT companies, telecommunications providers, financial institutions, and 'dotcoms' are the leading advertisers online."
The report found that over the next four years, online advertising in all Asia Pacific countries will experience bullish growth.
Market competition is also expected to grow increasingly fierce and fragmented.
The majority of regional Internet content providers are learning that they cannot survive on advertisement revenue alone and are going to have to seek alternative forms of revenue.
In order to fill this void, online advertising networks and traditional advertising agencies will need to focus on working past the standard banner advertisement and create more effective forms of advertisement.
IDC's recently published 'Online Advertising in Asia Pacific' analyses the opportunity for online advertising in Asia. It discusses the Internet advertising market in Asia by country and forecasts market growth up to 2004.
Additionally, the report discusses online advertising specifically in Korea, Australia, Singapore, Hong Kong, Thailand, Malaysia, China, and Taiwan.
The report concludes with recommendations for companies moving into online advertising in the region.
