Nov. 1 (NBD) -- The in-feed ads segment is expected to outpace the search ads sector and to maintain a growth rate of more than 50 percent over the next few years, according to market research and consulting firm iResearch.

The booming area has attracted a number of Internet giants, such as Baidu, Tencent, Facebook, and Toutiao.com.

Internet industry analyst Ma Jihua told NBD that incorporating in-feed ads into information flow and making them look like news contents is beneficial to increase customer reach. Advertising in such a way is also acceptable to readers.

These attributes make in-feed ads a new favorite of advertisers and also a major ad form in the mobile clients, Ma added.

Data from iResearch shows that China's mobile ads market grew by 75.4 percent year-on-year to 175 billion yuan (26.4 billion U.S. dollars) in 2016, accounting for 60.3 percent of the total value of the country's network ad market.

Of that, China's in-feed ads sector totaled 32.57 billion yuan (4.9 billion U.S. dollars) in the year, representing year-on-year growth of 89.5 percent. In-feed ads with social platforms, news, and videos as main carriers grabbed a market share of 11.2 percent.

Baidu has begun drawing benefits from this new form of advertising.

Based on the striking performance of its in-feed ads business in the third quarter of this year, the Internet giant predicts that its income from news feed ads will surpass 1 billion U.S. dollars this year. The business is expected to be the company's new growth point in the future.

Data from the GF Securities Research Center also shows that news feed ads have contributed up to 90 percent of advertising revenue of Baidu's rival Toutiao.com, showing a compound growth rate of 220 percent.

However, there are still challenges for the rising sector.

Xiang Kun, editor-in-chief of a magazine on Internet economy and contract research fellow with the Suning Institute of Finance, told NBD that accuracy is an issue remaining to be solved, as users cannot always get the ads they want most.

Xiang also pointed out that the new advertising type is not yet right for large-scale advertising of upscale brands.

Email: lansuying@nbd.com.cn