9.8% increase in China ad spend despite slowdown in key sectors: GroupM

China’s steady economic growth has effectively provided support to the confidence of advertisers. GroupM projects measured media advertising spending in China this year will increase by 9.8 per cent compared to 2013 to reach RMB 473 billion.

The forecast was made in GroupM’s ‘This Year, Next Year: China Media Forecasts’ report, which also predicts an 11 per cent hike in 2015 to reach RMB 525 billion.

The report’s positive forecasts are set against a backdrop in which the International Monetary Fund predicts China’s GDP will grow in real terms by 7.4 per cent in 2014, compared with global economic growth of 3.4 per cent.

The shift to mobile in China is highlighted in this report as well. “The internet continues to play an increasingly important role in China and the biggest revolution currently underway on the internet is the shift to mobile. Traffic to social networks, online video sites and search are all beginning to cross the 50 per cent mark. In 2014, brands will attempt to keep pace by funnelling more advertising spend into cross-screen mobile search and mobile video campaigns. Mobile display will also continue to ramp up as brands spend more on hero app ad buys and in-app ad networks,” explained Andrew Carter, President of Trading and Knowledge, GroupM China.

Some of the report highlights show:
Internet growth slows down and ecommerce ads rank first in internet ad spending
Having passed the RMB100 billion milestone in 2013, China’s online advertising market has reached scale but its growth rate has begun to slowdown. The growth rate is expected to reach 35 per cent this year and 33 per cent next year.

China is now the world’s largest ecommerce market with ecommerce search ads contributing the largest share of internet advertising spend. Brands are beginning to invest in advertising on China’s leading ecommerce platforms. Brand advertisers are investing in advertising on China’s leading ecommerce platforms, not only to drive traffic and sales to their online flagship shops, but also because they recognise the power ecommerce sites are exerting as a ‘medium’.

Digital OOH strengthens OOH ad market
The report says the traditional OOH will shrink slightly because of the removal of billboards in some major cities and a change in the buying process. However, AdEx of digital OOH will still increase, supporting a strengthening of the OOH ad market. Along with the digitisation trends of OOH media, there has been a growing trend to digitise bus-stop billboards. 1,500 bus-stop LCD screens in the downtown area of Shanghai are planned to be replaced by 55-inch HD interactive ones. The digitisation of bus-stop billboards in Nanjing is also under way. Two hundred digital screens are expected to start operating this year. The growth rate of OOH AdEx is forecast to be 5.7 per cent this year and 6.2 per cent next year.

TV AdEx share will drop below 50% while it’s still dominant
The report says the share of TV AdEx will drop below 50 per cent for the first time in 2014. However, TV still holds a dominant place amongst all forms of media in terms of coverage and influence. From January to April 2014, about 45 per cent of the top 10 hot topics on Sina Weibo were inspired by TV programs. Meanwhile, TV still dominates media advertising spend with an estimated RMB 221 billion in 2014, representing a 47 per cent share of all advertising expenditure. TV AdEx is expected to remain steady this year while Provincial Satellite TV will enjoy much higher growth.

Advertisers invest more in radio as print digitisation accelerates
Advertisers have favoured radio in recent years as private car ownership continues to increase. It has also worked hard to demonstrate the power of sales-based medium. GroupM forecasts radio AdEx will rise by 3.6 per cent this year and 3.4 per cent next year.

Policies this year will undoubtedly speed up the print transition to an increased amount of digital content. To promote the digitisation and upgrade of news and publishing industry, the State Administration of Press, Publication, Radio, Film and Television proposed a three-year plan to support a number of newspaper publishers and to implemented several projects to assist the news publishing industry upgrading its offering.

The study is part of GroupM’s media and marketing forecasting series drawn from data supplied by parent company WPP’s worldwide resources in advertising, public relations, market research and specialist communications.

Via Digital Market Asia Mobile

Copenhagen INK

Lars is the owner of Copenhagen INK and is an experienced and passionate marketer with a proven track record of driving business impact through innovative commercial marketing initiatives.

You may also like...