Digital Ad Spend Rises in China Despite Economic Slowdown - eMarketer

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Digital Ad Spend Rises in China Despite Economic Slowdown

China’s internet sector continues to show significant growth

March 9, 2016

Despite a general economic slowdown in China, the country’s internet sector shows no signs of abating and eMarketer predicts that digital ad spend will reach $40.42 billion in 2016—a 30% increase on last year’s spend. eMarketer expects this number to more than double by 2020, when it will reach $83.59 billion.

Total Media Ad Spending in China, by Media, 2014-2020 (billions)

China’s shift from traditional to digital media is also reflected in declining spend on TV and print. In 2016, TV spend will account for 24.2% of total media ad spending, or $18.92 billion. That’s less than half of digital’s share. Meanwhile, print spend will account for just 7.0% of media spend, or $5.50 billion.

As consumer media habits in China increasingly shift toward mobile, mobile video in particular is touted to be a significant growth area and will take 55.0% of all digital video spend, or $3.09 billion, in 2016. By 2020, mobile video will account for 73.0% of all digital video ad spend in China, representing $9.15 billion.

Digital and Mobile Video Ad Spending in China, 2014-2020

Spending on display and search ads delivered to mobile internet-connected devices will also rise and reach $14.54 billion and $10.96 billion, respectively, in 2016.

“We see more ad dollars shifting from traditional media, such as TV and print, toward digital and mobile,” said eMarketer forecasting analyst Shelleen Shum. “This is driven by a growing share of young internet-savvy consumers who are spending more than the older generation. The slower economic growth has also caused advertisers to look more closely at ad budgets, with some preferring to spend more on targeted digital formats.”

Collectively, Baidu, Alibaba and Tencent will take 72.8% of China’s mobile internet ad market in 2016. eMarketer predicts that Alibaba will continue to claim the largest share of mobile internet ad revenues in China, taking $9.16 billion million in 2016, for growth of 54.8% on last year.

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