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Mobile Ads Set for Dramatic Increases in China

Lack of infrastructure, experience have held marketers back

June 12, 2012 | Media Buying | Mobile

By the numbers, China should be the leading mobile advertising market in the world. eMarketer estimates more than 880 million consumers in China—nearly two-thirds of the country’s population—will own at least one mobile phone by the end of this year.

Geography also suggests China’s mobile advertising market should be booming. Nearby Japan and South Korea are among the world’s most advanced internet and mobile markets and a major influence on China’s pop culture and entertainment trends.

Mobile Phone Users and Penetration in China, 2010-2016

But marketers in China are not flocking to mobile as an advertising medium. The country’s advertisers now spend 15% of their marketing budgets on digital media, on average, but less than 1.5% of total ad spending ends up in mobile.

Advertisers do have valid reasons for holding back. Download speeds in China can be slow and third-party data tracking and analysis services are unavailable. Marketers and ad agencies in China also lack experience in how to use phone-based efforts effectively and how to maintain the necessary infrastructure required for mobile-based marketing programs. But advertisers, agencies and mobile experts say this is about to change, and fast. The mobile advertising market in China, they believe, is ripe for dramatic spending growth.

eMarketer estimates mobile ad spending in the country, including on display, search and messaging-based advertising, will rise 60% this year after more than doubling in 2010 and 2011 from a tiny base. Spending will remain shy of $1 billion each year through 2013, but by 2016 will reach more than $1.6 billion.

Mobile Ad Spending in China, 2010-2016 (millions and % change)

That sounds impressive until you consider that China, now the world’s second-largest ad market after the US, will spend about $46.34 billion on total media spending this year including $7.36 billion in online spending. In 2011, China’s ad spend totaled $38.68 billion, including online spending worth $5.3 billion. A lack of experience and understanding on the part of marketers and ad agencies is one reason for the slow advancement of mobile marketing, experts told eMarketer.

The full report, “China's Mobile Market: Tapping Nearly 1 Billion Subscribers,” also answers these key questions:

  • Why is mobile ad spending in China still so low?
  • How are smartphones altering China’s digital landscape?
  • What’s the next killer app for mobile in China?

This report is available to eMarketer corporate subscription clients only. Total Access clients, log in and view the report now.

Check out today’s other articles, “Facebook Advertisers Find Better Payoff with Sponsored Stories” and “Smart Device Screen Size Has Little Effect on Clickthroughs.”


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