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On-line Advertising to Require Licences
On-line advertising, a major revenue earner for an increasing number of websites, will be screened under a licence system in China, according to a leading official of the country's advertisement industry watchdog.
Known for its low cost, rapid distribution and extensive dissemination, Web advertising has increasingly become a magnet for advertisers seeking marketing opportunities, according to Wang Jinjie of the State Administration of Industry and Commerce (SAIC).
However, none of China's current websites that post advertisements online have obtained government approval, and a flurry of problems have occurred in Internet advertising, said Wang, vice-director of SAIC's Advertisement Supervision and Management Bureau.
The country had registered 15,000 Internet sites as of the end of 1999. A large portion have leveraged strong traffic growth to compete with traditional media, "stealing" advertisers from newspapers, radio and TV, according to sources with the Ministry of Information Industry.
The site www.sohu.com, one of the leading Web portals in China, for example, saw 93 per cent of its total income in 1999 come from on-line advertising. It chalked up US$1.6 million from Internet ads last year.
Despite the exponential expansion of on-line business, Wang said some websites have released falsified ads to cheat consumers; some Internet firms advertised for commodities or services whose publicity was otherwise banned or restricted. Still more Web companies were engaged in unfair competition or published ads that contained "serious problems."
"The malpractice, if not curbed, will thwart sound and orderly development of the emerging Internet advertising industry in China," said the vice-director.
Wang admitted that his bureau felt much pressure when dealing with Internet advertisement, a novelty in China. But the bureau contended that on-line advertising activities and ad content should be brought under SAIC's supervision.
Wang said: "There should be market access conditions for Internet advertising firms, and advertisement content should be regulated accordingly."
To protect the interests and rights of consumers, and standardize Internet advertising, the SAIC has decided to register 27 well-established Web-based companies in Beijing, Shanghai and Guangzhou to pilot on-line advertising, the official said.
SAIC has granted Internet ad permits to websites such as www.sohu.com, www.netease.net and etang.com, and asked them to help explore an effective management and supervision mechanism for on-line advertising, SAIC sources said.
"We have not given any privileges to these Internet sites," Wang said. "Instead, we require them to abide by the advertisement rules and regulations, and have their content examined when posting ads for special commodities."
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