China will see 57% of its ad spend going towards the Internet this year. According to the latest report from media company GroupM, the second largest advertising market globally may be heading for slower growth though as digital access nears saturation in urban areas.
Total ad spend in China is predicted to grow at 7.8% during this year to hit $84.4 billion. The country now has some 731 million Internet users, double the roughly 300 million in the US.
The steady increase in digital ad spend is driven by a recovering economy, growing consumer confidence in eCommerce, online video, urbanisation and policies. Digital ad spend five years ago came to 19.4%. Now on track to reach 57% the figures reveal just how fast the ad landscape has grown in China.
These predictions aren’t too different from eMarketer‘s forecast that digital ad spend in the country is set to account for 60% of paid media advertising this year.
Mobile continues its push to the top, as mobile Internet becomes a core driver of rising Internet ad expenditure in the future. Mobile internet users accounted for 95% of total Internet users at the end of 2016. The increase in mCommerce is also driving the growth of mobile advertising and shopping app consumption.
TV media is to make up 31.4% of ad spending and is forecasted to drop 5.2% this year after declining 4.9% in 2016. However, China Central Television (CCTV) is expected to boost ad spend by 5% across its channels.
Whilst TV loses out, content marketing increased at a 20% year-on-year growth in the number of placement formats last year.
Patrick Xu, CEO of GroupM and WPP China, explains that media spend is also led by brand relevancy.
“For the foreseeable future, we will see more examples of media integration and coexistence, while an increasing portion of competition between different types of media will consist of competition in terms of content. Effective advertising is linked to ‘relevance’, while ‘relevance’ is also about times, places, context, building and deepening cognition and actionability.”