China’s steady economic growth has effectively provided support to the confidence of advertisers. GroupM projects measured media advertising spending in China will increase by 10.7 percent compared to 2012 to reach RMB 430 billion. The forecast was made in GroupM’s ‘This Year, Next Year: China Media Forecasts’ report, which also predicts an 11.8 percent hike in 2014 to reach RMB 480 billion.
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.
The report’s positive forecasts are set against a backdrop in which the International Monetary Fund (IMF) predicts China’s GDP will grow in real terms by 7.8 per cent in 2013 and 7.7 per cent in 2014, compared with global economic growth of 3.1 per cent and 3.8 per cent for this year and next respectively.
The following highlights of the GroupM report demonstrate China’s strategic importance for advertisers:
Television still dominates
TV continued to dominate media advertising spend with an estimated RMB 221 billion in 2013, representing a 51 per cent share of all advertising expenditure due to the large audiences it attracts, yet its share has been declining in the past three years.
With the steady growth of IPTV subscribers, as well as the support of a technology upgrade, advertisers need to think more about TV search and targeted advertising. When the platform matures, achieving a more precise TV advertising strategy will no longer be just a vision but a practical reality.
Internet enjoys rapid growth
Growth in measured media advertising spending has been led by Internet spending, which GroupM predicts will grow by 36 per cent this year and 34 per cent in 2014. China had 560 million Internet users by year-end 2012 and Internet penetration hit 42.1 per cent.
The report says that online video continues to develop positively, and takes share from TV gradually. One important reason is that nearly all content available on Chinese TV can be seen online, and TV stations often partner with video sites on effective promotions. Nevertheless, the number of online video viewers will hit saturation point in 2013. Pre-roll inventory, particularly in China’s most developed cities, is already extremely tight. Online video will not be able to drive the more than 100% growth in spending we saw last year due to insufficient expansion of available inventory in 2013.
OOH momentum softened
OOH advertising spending increased 17.5 per cent in 2012, benefiting from the rapid growth of public transportation media and deeper OOH media penetration in tier-2&3 cities. GroupM predicts this growth will slow down this year and next to 9.7 per cent and 9.3 per cent respectively.
The rapid development of OOH depends on the development of new technology, furthermore, the creation of interactive and interesting content.
Although new technology provides rich possibilities for OOH brand strategies, to achieve great OOH communication, brand marketers need to combine brand features with appropriate technology.
Mobile embrace further development
Mobile Internet advertising is growing at a startling rate with the facts that the scale of mobile Internet users rose further to 74.5 per cent in the overall share of Internet users and 3G users reached 230 million, grew 81 per cent in 2012. Meanwhile, consumers are spending more and more time on their tablet PCs, which tend to be the first choice for consumers when viewing online videos, playing games, and many other forms of entertainment. Mobile Internet is emerging as the most important part of the media mix for brand campaigns and brand marketers need to sustain innovation and vitality to win market share.
“The role of media in consumer’s experience with brands has become more and more diverse and significant. The rapid development of mobile Internet makes the line between brand communication and brand experience blur a little. Integrated marketing communications requires that all the components of marketing, i.e. brand communication, brand engagement and sales fit together in a cohesive and consistent way. Advertisers who aim to build intimate and enjoyable relationship with consumers must offer consumers true value via paid/owned/earned media platforms,” said Eve Lo, Chief Knowledge Officer, GroupM China.
