China’s mobile ad and app advertising market presents unique challenges and opportunities – analysis
VP of Marketing and Business Strategy at Inneractive, Yoni Argaman, recently contributed an analysis to news site TechCrunch in which he explores the Chinese mobile advertising and publishing industry, taking a closer look at the country’s top performers and opportunities for international marketers.
With China being mobile and app-first, it’s easy to see that demand for traffic monetisation in the country is growing rapidly – even outside of China. That’s creating some good opportunities for global players.
The top three Internet companies in the market are Baidu, Alibaba and Tencent, collectively called BAT. They account for 73% of the country’s online market. Baidu alone, registered over 667m mobile users for its search engine last June. Alibaba meanwhile has 427m active users and Tencent WeChat outscores them both at 806m users, with its QQ app having another 667m users.
Digital advertising spending growing rapidly in APAC
Chinese publishers have been keen to expand as well, finding it ever more difficult to compete with BAT and the amount of traffic it retains. Hence, Chinese digital firms have begun to venture further into Southeast Asia, but also the North American markets where users are of higher value at CPM rates 10-20x higher than in China. In addition, users in APAC tend to spend less ($15 per capita) compared to those in the US ($165) and Europe ($95).
Argaman’s analysis also found that some publishers were bypassing their home turf and heading for the US and Europe instead. Musical.ly, for example, which is part-owned by Cheetah Mobile, was launched in 2015 in the US. Meanwhile, Android app Apus generates 30% of its downloads from the US and Europe.
Chinese app makers have been focusing on the utility category, with apps for Android launches, keyboards, battery optimisation and memory flooding the app stores. The category is ninth among the top 25 mobile apps in the US, reports comScore. Local developers are now also turning towards the US to launch their utility apps there. Gaming is another major app sector.
However, it’s not one-directional. Western developers have also been pushing into the APAC market and as such their relationship can be two-way. Western firms can guide Chinese developers through the market and Chinese firms can do the same across APAC countries.
Native, video and customised programmatic represent top opportunities for advertising technology firms. However, those wishing to push into China should be aware of the fact that Google, Facebook and Twitter are all blocked here.